24/11/17

Namibia’s Fifth National Development Plan

NDP5

In collaboration with Nedbank: Nedbank Namibia CIB Newsletter – August 2017

After some initial delays, Namibia’s Fifth National Development Plan (NDP5) was released on 31 May 2017. This national blueprint, the fifth in a series of seven, details the country’s development strategy from the 2017/18 financial year until the 2021/22 financial year. NDP5 takes over the reins from NDP4, seeking to build on the successes and challenges identified during the last five-year development plan. NDP5 is also informed by other development frameworks, such as the Harambee Prosperity Plan, Vision 2030, the UN Sustainable Development Goals (Agenda 2030), and the AU Agenda 2063.

This new development agenda comes off the back of some mixed results from NDP4. Investment in the extractive sector and abundant government expenditure saw economic growth average 4.6% over the 2012/13 – 2016/17 period, below the ambitious 6% target. The financial sector averaged growth of an impressive 8.4% per year. However, the drought and external shocks saw contractions in the agriculture and manufacturing sectors. GDP per capita increased from N$42 311 to N$47 358 during NDP4. The proportion of poor people fell from 28% in 2009/10 to 18% in 2015/16, while the percentage of severely poor fell from 15.3% to 11% over the same period. A full audit on the attainment on NDP4 targets still needs to be conducted.

The focus for NDP5 is on structural transformation and modernization of the Namibian economy, while also working to eradicate poverty and address inequality under the theme of ‘Working Together Towards Prosperity’. The plan is laid out under four pillars:

Economic Progression
Social Transformation
Environmental Sustainability
Good Governance

Some general targets set for NDP5 include average GDP growth of 4.6% per year, reducing the unemployment rate to below 24%, reducing inequality measured by a drop in the Gini coefficient from 0.552 to 0.500. As per earlier development plans, the need to ‘climb up the value chain’ by increasing value-addition within the economy is once again stressed. For this, the fishing and mining sectors have been singled out. Similarly, the NDP4 goal to increase energy generating capacity from the current 484MW (well below peak demand of 656MW) to 755MW by 2022 is repeated. And in similar fashion, manufacturing is once again expected to grow tremendously, significantly increasing its contribution to GDP. Many large infrastructure projects are included, such as for electricity transmission and distribution, water supply, as well as transport networks. Namibia’s competitiveness in the region is also to once again be improved, with a target of reducing the number of days it takes to start a business from the current 60 days down to just five.

In all, the projects envisioned during NDP5 come with a hefty price tag of approximately N$164 billion over the full five years. Roughly 45% of this expected expenditure is directed at infrastructure, about 19% for social development and 18% for human capital investment. However, this burden is not expected to fall on government’s stretched finances alone. It is anticipated that the private sector, development partners and donors (amongst others) will help foot the bill.

In terms of monitoring and evaluation, the National Planning Commission will compile annual progress reports. Additionally, a mid-term evaluation is set for 2020 that will determine the effectiveness of implementation, as well as whether NDP5 is on course to achieve its targets. These are to be used to inform the public on implementation progress, as well as to institute remedial measures if the need arises. Six months after the end of NDP5, an impact evaluation will be conducted to see whether the goals set were achieved.

Source: National Planning Commission