## IMF Staff Completes 2023 Article IV Mission to Namibia _IMF News, October 2, 2023_ ## Source details **Canonical URL:** [IMF Staff Completes 2023 Article IV Mission to Namibia](https://www.imf.org/en/news/articles/2023/09/30/pr23328-imf-staff-completes-2023-article-iv-mission-to-namibia) ## Other formats - [Markdown version](/en/news/articles/2023/09/30/pr23328-imf-staff-completes-2023-article-iv-mission-to-namibia/index.md) - [Structured JSON version](/en/news/articles/2023/09/30/pr23328-imf-staff-completes-2023-article-iv-mission-to-namibia/index.json) - [Bundle manifest](/en/news/articles/2023/09/30/pr23328-imf-staff-completes-2023-article-iv-mission-to-namibia/bundle-manifest.json) ## Bibliographic details - Published: October 2, 2023 --- ### Economic performance and outlook - Real GDP grew 4.6 percent in 2022, driven by mining. - Growth of 3.2 percent in 2023 is expected to bring output back above the pre-pandemic level. - For 2024 and the medium-term, the growth path is expected to stabilize at just below 3 percent. - Unemployment remains elevated at 21 percent, and is particularly acute among the youth. ### Inflation and external sector - Inflation rose sharply in 2022 due to high international oil and food prices; it has eased in recent months reflecting the global trend. - Food price inflation has remained elevated and is susceptible to: - resurging fuel and transport costs; - the impact of the drought; and - climate change more broadly. - The current account deficit widened in 2022 as the spike in fuel prices inflated the import bill. - In 2023, the current account is expected to narrow reflecting: - the easing of fuel prices relative to 2022; and - the recovery in the SACU revenues. - International reserves are expected to increase moderately with external financing needs largely covered by foreign direct investment in mining and the ongoing oil and gas exploration. ### Fiscal developments and public debt - The fiscal deficit narrowed from 8.6 percent in 2021/22 to 5.3 percent in 2022/23. - Public debt continued to rise and reached 68.7 percent of GDP. - Associated interest costs attained 4.5 percent of GDP. - Social assistance was expanded to address food insecurity. ### Fiscal policy recommendations and public financial management - Maintaining the fiscal reform momentum is key to: - preserve debt sustainability; - cushion against the volatility of SACU revenues; and - foster private sector-led growth. - Implementing the authorities’ fiscal consolidation strategy is pivotal to preserve debt sustainability and protect against SACU revenue volatility. - Priority reform actions recommended: - Accelerate public wage reform—including introducing early retirement. - Reform state-owned enterprises. - Improve licensing and taxation of natural resource extraction, including fishing, to enhance revenue mobilization. - Strengthen public financial management, including improving large public project selection. - Publish a fiscal risk statement along with the budget document to enhance fiscal transparency and public debt management. - Ensure fiscal space for social measures to help mitigate the impact of high food prices on the vulnerable. - Proper assessment of fiscal risks is needed before any budgetary commitments to new projects (green hydrogen, oil and gas exploration, processing of critical minerals). ### Monetary policy and financial stability - To respond to inflationary pressures, the Bank of Namibia has tightened its policy stance following the South African Reserve Bank (SARB). - Recommendations: - Keep the policy rate aligned with the SARB and maintain an adequate level of reserves to support the currency peg and anchor inflation. - Enhance macroprudential oversight to strengthen the resilience of the financial sector and support financial stability. ### Structural reforms and diversification - New projects in green hydrogen, oil and gas exploration, and processing of critical minerals can help diversify the economy if accompanied by reforms to: - address skill mismatches; - reduce the cost of doing business; - strengthen the public-private partnership framework; and - address constraints hampering entrepreneurship, including the regulatory burden, input costs (especially energy and water), and governance challenges. - Strengthening the public-private partnership framework and addressing these constraints would help Namibia benefit from investments in emerging sectors. ### Social protection and vulnerability - Assisting the vulnerable takes on new importance in the context of the ongoing drought and the risk of resurgent fuel and food prices. - Expanding and protecting social assistance is highlighted as important to address food insecurity and shield vulnerable groups. ### Statistics, data, and capacity - Improving specialized statistical capacity is needed to ensure consistent and proper recording of oil and gas exploration and tracking its impact on the economy. ### Mission and procedural notes - An IMF staff team, led by Mr. Jaroslaw Wieczorek, IMF mission chief for Namibia, visited Windhoek during September 18 ‒ October 2, 2023, to conduct discussions for the 2023 Article IV Consultation with Namibia. - End-of-Mission press releases convey preliminary findings after a visit; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision. *Press Release No. 23/328 — IMF Communications Department — October 2, 2023.* --- ## References - [Namibia and the IMF](http://www.imf.org/external/country/NAM/index.htm) - [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2023/09/30/pr23328-imf-staff-completes-2023-article-iv-mission-to-namibia_