The Namibia Economic Governance and Competitiveness Support Programme (EGCSP) has received $226.5 million financing from the African Development Bank (AfDB) in its first policy-based operation in the country.
The programme seeks to strengthen public financial management; improve the quality and efficiency of public sector spending; and lay a solid foundation for industrialization by supporting critical business environment reforms.
Though the country registered one of the highest average growth rates on the continent and made good progress in reducing poverty over the last two decades, more still needs to be done to further reduce unemployment and income inequality.
Namibia recorded a sharp slow-down in real gross domestic product (GDP) from 5.3 per cent in 2015 to 0.2 per cent in 2016. As a share of GDP, the fiscal deficit at 8.3 per cent, the current account deficit at 13.7 per cent and public sector debt at 39.8 per cent, had also markedly increased, while international reserves at 2.8 months of imports were below the international benchmark of 3 months.
The pace of industrialization and economic diversification is hampered by bottlenecks in public financial management (PFM) and the business environment.
The EGSCP is among the various measures the Government of Namibia is undertaking on fiscal consolidation and PFM and business environment reforms to address these challenges.
“The EGCSP is designed to address emerging vulnerabilities undermining macroeconomic stability and support the Government’s ongoing bold structural reforms aimed at driving long-term job creating growth and reducing income equality,” said Charles Boamah, Senior Vice-President, AfDB.
It is aligned with the Bank’s Country Strategy Paper for Namibia; two of the operational priorities of the Bank Group’s Ten-Year Strategy; and the High 5s agenda on industrialization and improving the quality of life.