The Namibian economy, which would contract by about 1,1% in 2009, would likely grow by 4,4% in 2010 as the mining sector, as well as secondary sectors like the tourism sector, start to recover, Bank of Namibia senior economist Gerson Kadhikwa said on Thursday.
Speaking at an intra-Africa business investment function, in Johannesburg, he noted that the country's mining sector had been the worst affected by the global economic downturn.
Diamond output for 2009 was expected to be down 63% on that of 2008. This would, however, be offset to some extent by an expected increase in uranium output for the year, Kadhikwa said.
Further, its secondary industries were expected to perform better during this year, owing to continued construction activity. The electricity, water and manufacturing sectors would also contribute positively to the country's gross domestic product (GDP), this year.
Namibia's GDP had been growing at around 4% a year for the past five years and stood at about N$79-billion.
With the slowdown in the economy, Namibia was facing challenges in terms of accelerating its economic growth, diversifying the economy, attracting more investment and building its skills capacity, said the economist.
He noted that the country's economy was dominated by the services sector, which contributed about 51% of GDP in 2008, and that the country had to invest more in its manufacturing sector, among others.
Kadhikwa pointed out that the Namibia's savings rates were healthy at around 30% of GDP. Its investment, however, only stood at about 23% of GDP.
He suggested that the country should take some of its savings and invest more on diversifying and growing its economic sectors.