Shiimi: Agriculture, tourism not enough to drive growth
Finance minister Ipumbu Shiimi says the government will have to identify new engines of growth to drive the Namibian economy, as traditional engines of growth in the agricultural and tourism sectors will not be sufficient to drive future economic expansion.Shiimi made the remarks at the recently concluded Public Enterprise CEO Forum.
“We cannot rely on the old engines of growth. They are going to give us strength, but not enough to employ the people we need to employ because that is one of our challenges,” Shiimi said of the traditional economic sectors on which Namibia relies.
The finance minister said it is necessary for Namibia to identify sectors such as mineral beneficiation and the manufacture of chemicals, among others, as possible industries to venture into.
“We have identified opportunities in mineral beneficiation, but also in the production of things like chemicals, the production of pipes. NamWater uses a lot of pipes and some of these pipes can be produced in Namibia. We need to work together to identify the constraints and work on them,” he said.
Slower pace
The economy is starting to observe growth once again, Shiimi added.
“The economy has started to improve. The older engines of growth, mining, are doing much better, tourism has improved, and that has got knock-on effects on other sectors, and we are starting to see some positive outcomes in the construction sector, although still moderate,” he said.
In a recent economic growth bulletin, the Bank of Namibia noted that the domestic economy continued to grow but at a slower pace during the first quarter of 2024, primarily due to weak performance in primary and secondary industries. The economy registered a growth rate of 4.7% during the first quarter of 2024, down from the 5.3% growth recorded in the corresponding quarter of 2023.
“In the primary industry, the mining sector registered slower growth during the quarter under review, primarily due to weaker diamond production and a decline in uranium output, despite robust growth in oil and gas exploration activities,” the bank said.
The agricultural sector was sustained by the drought-induced marketing of cattle and small stock, despite the adverse climate impact on crop production. Furthermore, activity in the secondary industry slowed and was dragged down by a decline in the manufacturing sector, mainly driven by a contraction in diamond processing, the central bank noted.