Economic Pulse – March 2024

His Excellency Dr Hage Geingob embarked on his presidency in 2015 amidst a wave of public support, having secured 86% of the presidential vote in 2014. However, with Geingob’s inauguration as the third president of Namibia, he inherited an overheated economy rapidly running out of steam. While Namibia had been through its most rapid expansion post-independence during the half-decade before President Geingob’s election, there were growing signs that this growth was faltering.

President Geingob’s tenure began with a renewed focus on addressing socio-economic disparities. Initiatives like the Harambee Prosperity Plan II (HPP II) and Vision 2030 aimed to boost growth, create jobs and improve public service delivery. While only about half of HPP II’s listed objectives have been demonstrably completed or partially achieved, the policy’s aims were informed by a rosy outlook pre-empted by the strong economic performance of the then recent past. While these documents focused on addressing social disparities, their success would be undermined by an impending economic correction. We keep this context in mind as we explore the economic progress of Namibia under President Geingob’s stewardship.

The achievements of the HPP II under Geingob’s tenure include retaining Namibia’s status as the nation with the most unrestricted press in Africa, as assessed by Reporters Without Borders,the development of the Second National Anti-Corruption Strategy and Action Plan, bolstering citizen participation and engagement, strengthening security and the rule of law, the establishment of a sovereign wealth fund, support for public enterprise reform, evaluation of the existing framework for the allocation of fishing rights and mineral licences, advancements in national housing delivery, the introduction of a gender-aware policy, the expansion and enhancement of road infrastructure, as well as the enhancement of international relations.

President Geingob’s leadership impacted Namibia’s electricity sector, culminating in the transformative Modified Single Buyer (MSB) framework. This framework fosters competition and diversification in power generation, aiming to address challenges of limited supply and accessibility. Several key initiatives undertaken during his presidency stand out as instrumental in enabling the MSB framework.

Firstly, the 2018 development of the Independent Power Producer (IPP) framework opened doors for private companies to generate and sell electricity directly to the grid, independent of the state-owned power utility. This unlocked opportunities for renewable energy investment and diversified the power mix.

Secondly, crucial legislative changes paved the way for the introduction of the MSB framework. The National Electricity Sector Policy of 2017 laid the government’s vision for a competitive market, while the Electricity Amendment Act of 2015 provided the legal foundation for licensing IPPs and electricity traders. Further refinements came through the regulations on electricity trading (2018) and NamPower’s market participation rules (2019), establishing the rules and procedures for market participation under the MSB framework. These advancements under President Geingob’s leadership have irrevocably transformed Namibia’s electricity sector towards a more open and competitive landscape. The MSB framework, empowered by these reforms, is poised to attract investment, promote renewable energy generation, and ultimately contribute to a brighter future for all Namibians by ensuring increased electricity supply and accessibility.

President Geingob championed the burgeoning green hydrogen sector in Namibia, enacting multiple initiatives and fostering crucial collaborations. He established the High-Level Panel on the Namibian Economy (HLPNE) which identified green hydrogen as a potential growth industry. He then further drove the establishment of the Green Hydrogen Council (GHC), encompassing both public and private entities to act as a catalyst for green hydrogen growth. President Geingob soon realised the need for the establishment of a body with more authority and implementation powers than the HLPNE, which led to the creation of the Namibia Investment Promotion and Development Board (NIPDB).

Born in 2021, the NIPDB marked a strategic shift in economic policy development. In attracting major investments in green hydrogen and manufacturing, the NIPDB has secured over N$60 billion in pledges and empowered over 1,000 MSMEs through initiatives like Know2Grow. Its “one-stop shop” approach and online platforms further simplify the investor experience. By nurturing youth entrepreneurship and supporting MSMEs, the NIPDB paves the way for a more inclusive and diversified economy. While definitive impact requires long-term assessment, the NIPDB’s early accomplishments paint a promising picture for Namibia’s economic future.

President Geingob further led the establishment of the Southern Corridor Development Initiative (SCDI) – an initiative that aims to transform the ||Karas Region into a hub for large-scale green hydrogen production, attracting international investment and creating jobs. By establishing a dedicated export corridor and fostering development in complementary sectors like tourism and manufacturing, the SCDI aspires to unlock the region’s full economic potential, leading to sustainable growth and improved quality of life for its residents.

Beyond these key contributions, Geingob’s commitment extended to collaboration with Germany on a green hydrogen corridor connecting Namibia and Europe, the launch of the National Green Hydrogen Strategy in 2022 outlining a roadmap for the sector’s advancement, the creation of a dedicated green hydrogen office within the Ministry of Mines and Energy, and the establishment of the Green Hydrogen Fund to provide financial support.

The late president had a profound commitment to serving the needs of the populace. He established the Hage Geingob Endowment Fund, an initiative aimed at assisting individuals lacking financial resources to pursue further education, as well as those enduring severe poverty, by providing financial assistance and scholarship opportunities. Numerous testimonials attest to Geingob’s accessibility and willingness to engage directly with individuals, a rarity among public figures of his stature. His approachability extended to individuals who could readily communicate with him through personal messages, a gesture highly uncommon in similar contexts.

However, amidst these achievements, President Geingob’s administration struggled to alleviate unemployment and poverty with the Labour Force Report in 2018 reporting an increase from 27.9% in 2014 to 33.4% in 2018. As the economy stagnated after 2015, the government took various measures to curtail growth in its expenditure, such as freezing vacant positions. The fiscal consolidation measures taken also resulted in a sharp drop in capital investment by the government, which hampered private sector industries reliant on expenditures such as construction. The tightening economic conditions were further exacerbated by a prolonged drought which contributed to increased poverty. The incidence of poverty among Namibians – gauged by access to basic necessities such as clean water, food, medical care, cooking fuel and financial income – increased from 5% in 2014 to 22% in 2021, according to Survey Warehouse.

Economic conditions stagnated under President Geingob’s administration, but would have likely done so under the leadership of most. The scene was set for a rapid contraction in foreign direct investment and tighter credit conditions even before the late president’s tenure began. Factor in the occurrence of unpredictable events, such as a long period of drought and a global pandemic, and it becomes obvious that the economic stagnation that has been pervasive in Namibia over much of the last decade make the achievements of the period all the more notable. During this period of sadness following the president’s passing, we wish to highlight the abovementioned progress, and encourage future leadership to build upon the foundation laid by a man who was instrumental in drafting the very constitution upon which so much of Namibia’s significant progress since independence has depended.

Angelique Bock
Research Analyst

2024-03-13T09:01:34+00:00 March 5th, 2024|ECONOMIC PULSE, NEWS|