‘Economy must be competitive’

Jo-Maré Duddy and Phillepus Uusiku – “Namibia desperately needs faster, sustained economic growth to make a dent in the critical socio-economic challenges of poverty and high unemployment, particularly among the youth and less skilled individuals.”Johannes !Gawaxab, in his first public address since he became the governor of the Bank of Namibia (BoN), yesterday said the economy needs to transform and become competitive and that “this area will be the preoccupation of the bank in the coming years”.Speaking at the celebration of the BoN’s 30th anniversary, !Gawaxab said as the fiscal advisor to government, the central bank is “committed to play its part in this exercise”.“Not in a subservient role” to government, he pointed out, “but rather in a complementary fashion to set the framework for accelerated economic development”.Referring to the impact of Covid-19, !Gawaxab said “periods of economic and financial turmoil such as the one we are navigating today underline the need for strong central banks, to serve as beacons of stability”.“The country at large is relying on us to deliver monetary stability, price stability and financial stability, during the unfolding pandemic and beyond,” he said.‘Structural interventions’Monetary policy, however, cannot be expected to be the driver of long-run growth in the economy, the new governor stressed.“The policy challenges we face now are complex, and they will require equally complex strategies,” !Gawaxab said.He elaborated: “The Namibian economy needs structural interventions to achieve a sustained increase in our growth potential. We need to dedicate our time to dissecting the constrains to growth in our economy, devise and implement the necessary strategies to overcome them.”Over the coming decades, the BoN needs to direct efforts towards supporting key players in the economy, as well as government, to contribute effectively to economic development, growth, accelerated investment and employment creation, !Gawaxab said.“We will work hand in hand with the government to carry out economic research and craft policy interventions necessary to support economic growth,” he said.Digital worldAccording to !Gawaxab, “the ever-evolving global financial architecture presents a paradigm shift for the bank [Bon] in the regulatory space”.“Digital transformation offers both opportunities and threats, as it brings about fundamental changes in the working modes and business models in the financial sector,” he said.The BoN will need to ensure that it has sound oversight over the digital architecture.“As a regulator, it is incumbent upon us to make judgement calls on fintech risks, digital currencies, making the cloud safe, supervising Artificial Intelligence (AI) and defending the financial system against impending cyber security attacks,” !Gawaxab said.He added: “We also will need to be mindful of the manner in which we regulate new payment operators as we discharge our regulatory mandate in a gradually ‘cashless’ society.”The BoN will “work to acquire the requisite skills to spearhead financial regulations in a digital world”, he assured the audience.ChallengesEmbracing current and emerging challenges “will require transforming and undergoing seismic changes – changes to our institutional, operational, and structural set up,” !Gawaxab said. “It will require us shifting from our comfort zone and embracing the unknown.“Given our expanding and evolving mandate, it is important that we listen to the music of the future more acutely and perceptibly, anticipate possible repercussions and dance to these tunes, today,” he said.Although Covid-19 has changed the ways in which people and institutions operate and live, he firmly believes that the “recent disruptions to the normal order and the past few years have taught us, as a nation, that we are a resilient and enduring people”, !Gawaxab said.What Namibia needs now, he continued, is “to marshal our best efforts to lay the foundation for a strong economic recovery in the years to come”. “The central bank is ready to join in that conversation, with an objective to realign the Namibian journey towards a ‘prosperous and industrialised nation’,” !Gawaxab said.Looking backReflecting on the BoN’s three decades, !Gawaxab said it been critical in enhancing long-term macroeconomic stability in the country by delivering on its mandate of implementing monetary policy, safeguarding financial stability and promoting economic development in Namibia.On the monetary policy function, the role of the bank has been to set an interest rate path that ensures the maintenance of the value of the Namibian dollar.The governor pointed out that the bank has thus far done relatively well on this front. Inflation has been largely under control over the past 30 years, bringing greater predictability for economic agents. This safeguard price stability in the interest of sustainable economic growth and development of Namibia, he said.Financial stabilityNamibia boasts a stable, sound, well-regulated and a modern financial system, an achievement that has been tested against global standards.Over the years, the bank has also dedicated its efforts towards reforming the financial sector in line with the aspirations of the Namibia financial sector strategy.This is to ensure that the sector is transformed into a more competitive, resilient, developed, and inclusive instrument that should contribute to the economy at its highest potential, !Gawaxab said.Similarly, in terms of modernising the national payment system, the BoN’s interventions ensured that payments and transfers of funds are done in a safe, cost effective and reasonably fast manner. HeadwindsEqually, the bank has been committed to maintaining a healthy level of international reserves, as Namibia is an open economy and needs to ensure that it has adequate buffers in place to withstand financial headwinds, he added.The emergence of the Covid-19 pandemic, is the immediate policy challenge for the BoN at the moment, in terms of its impact on the economic activities and consequently the financial sector. In confronting this challenge, the bank recently rolled out measures to preserve financial stability and smooth credit flows amidst the outbreak of the pandemic. These measures epitomise the responsiveness of the central bank to prevailing macroeconomic conditions and economic cycles and will remain broadly in force until the economy emerges from this pandemic-triggered crisis, !Gawaxab said.

‘Economy must be competitive’

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Republikein 2026-06-19

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