Namibia's economy has remained virtually stagnant for more than five years.

This is owing to a combination of factors that continue to add pressure on households, businesses, and government finances, and warnings are that recovery would take time.

Economic Advisor to the President, Shali Shindume painted a difficult picture of the country's economic position during President Netumbo Nandi-Ndaitwah's townhall engagement with residents of the Erongo region at Swakopmund.

He listed the weak growth, international geopolitical tensions, and domestic challenges affecting the overall economic activity.

Consequently, the rising fuel prices are eroding household purchasing power, and businesses are struggling to maintain profits for expansion and reinvestment into the local economy.

Shindume added that these put the government revenue under pressure.

“I think the truth must be told: our economy is not performing well, and it is not growing at the pace we would like it to. In fact, it has remained largely stagnant over the past five years or more. This situation has been influenced by domestic challenges as well as external factors unfolding around the world. Global geopolitical developments, in particular, have had an impact on fuel prices, and we are feeling the effects here at home.”

The diamond industry is among the sectors that are not spared from the economic squeeze.

Shindume explained that the steep decline in diamond revenue is a classic illustration of the challenges confronting government finances.

“We used to generate over N$5 million as a country, but today, we are receiving N$300 million. You can see the pressures mounting and the impact they are having on the country. Economic recovery is therefore not a sprint.”

The Presidential Economic Advisor also responded to the outbreak of Foot-and-Mouth Disease and the relief measures proposed by the Bank of Namibia to cushion the impact.

“FMD is not only affecting farmers; it is affecting the entire agricultural value chain. It is also impacting businesses such as butcheries and meat vendors. That is why these relief measures have been put in place. We encourage everyone affected to make use of them.”

Namibia, like other countries in SADC, is also preparing for the potential effects of El Niño on agricultural production.

Shindume said the government is monitoring for possible relief where it can.