{"id":377964,"date":"2025-07-07T12:00:00","date_gmt":"2025-07-07T10:00:00","guid":{"rendered":"https:\/\/informante.web.na\/?p=377964"},"modified":"2025-07-06T19:25:19","modified_gmt":"2025-07-06T17:25:19","slug":"downgrade-to-lower-middle-income-country-a-wake-up-call-economist-opines","status":"publish","type":"post","link":"https:\/\/informante.web.na\/?p=377964","title":{"rendered":"Downgrade to lower-middle-income country a wake-up call \u2013 Economist Opines"},"content":{"rendered":"\n

Business Reporter<\/p>\n\n\n\n

AN ECONOMIST from local stockbroking firm Simonis Storm Securities, Almandro Jansen, has said that while Namibia\u2019s reclassification from an upper-middle-income to a lower-middle-income country may open up short-term financing opportunities, it also calls for greater urgency in addressing inequality, youth unemployment, and economic transformation.<\/p>\n\n\n\n

The World Bank this week, in its latest income classifications for the 2026 fiscal year (which runs from 1 July 2025 to 30 June 2026), downgraded Namibia to a lower-middle-income country.<\/p>\n\n\n

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Jansen explained that the World Bank uses Gross National Income (GNI) per capita, calculated through the Atlas method, to classify countries.<\/p>\n\n\n\n

\u201cNamibia\u2019s GNI per capita dropped from US$4,870 in 2019 to US$4,240 in 2023, falling below the current upper-middle-income threshold of US$4,496,\u201d Jansen said, adding that this decline was driven by two key developments: revised population estimates and slower growth.<\/p>\n\n\n\n

\u201cNamibia\u2019s population was revised upward by 13.8% in the 2023 census. While overall income remained broadly stable, the per-person average declined purely from a statistical standpoint,\u201d Jansen said.<\/p>\n\n\n\n

Touching on the slower economic growth aspect, Jansen detailed that GDP growth slowed to 3.7% in 2024, down from 4.4% in 2023. \u201cThe slowdown was largely due to weaker performance in mining, particularly the diamond sector, and a modest recovery in other industries like agriculture and construction. In nominal terms, total income didn\u2019t grow fast enough to offset the population revision. It is important to note that Namibia is the only country globally that was downgraded in the World Bank\u2019s latest income reclassification,\u201d Jansen said.<\/p>\n\n\n\n

Explaining the implications of this downgrade, Jansen said that paradoxically, it could improve Namibia\u2019s eligibility for concessional loans with lower interest rates and longer repayment terms, as well as development assistance from multilateral institutions that target lower-income economies. In addition, he said that Namibia could receive grants and technical support for critical sectors such as public health, education, and climate resilience.<\/p>\n\n\n\n

Furthermore, Jansen said that this could help plug budget gaps, particularly as the government looks to ramp up spending on housing, energy, and infrastructure.<\/p>\n\n\n\n

On the downside, however, he added that this could lower investor confidence in Namibia.<\/p>\n\n\n\n

\u201cThe reclassification might raise perceived sovereign risk, especially among global investors who benchmark countries against peer groups. Namibia has traditionally marketed itself as a stable, rules-based jurisdiction with an upper-middle-income profile. This narrative may be harder to defend in the short term,\u201d Jansen said.<\/p>\n\n\n\n

He added that the downgrade has highlighted a need for a shift in development strategy.<\/p>\n\n\n\n

\u201cThe downgrade reinforces the urgency of reducing reliance on extractive industries, particularly diamonds and uranium, which are vulnerable to global price cycles. Expanding value addition and local manufacturing, especially in agribusiness, logistics, and green energy, is necessary,\u201d Jansen said.<\/p>\n\n\n\n

He concluded that it also highlights that economic growth alone is not sufficient.<\/p>\n\n\n\n

\u201cNamibia\u2019s inequality levels remain among the highest in the world (Gini coefficient ~0.59), and this downgrade may reflect the failure to translate national income into broad-based prosperity. The downgrade could become a politically sensitive issue, especially in an election cycle or in debates around poverty, youth unemployment, and social protection. It puts pressure on the government to demonstrate economic competence and deliver results from major reforms, particularly in land access, SOE governance, and public sector efficiency. It also raises questions about Namibia\u2019s oil future: if managed well, offshore oil discoveries could reverse this trajectory; if mismanaged, they could deepen inequality and volatility. Namibia now joins countries like Ghana, Kenya, Nigeria, and India in the lower-middle-income group. This doesn\u2019t mean the country is failing but rather that growth is not keeping up with population and structural shifts. This reclassification should not be viewed as a loss of prestige but as a wake-up call to revisit national development strategies and move away from growth that is concentrated in capital-intensive, export-oriented sectors. The downgrade to lower-middle-income status is not merely statistical; it is symptomatic of deeper economic vulnerabilities. It sends a strong message: Namibia needs to recalibrate its growth model to be more inclusive, sustainable, and diversified,\u201d Jansen said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Business Reporter AN ECONOMIST from local stockbroking firm Simonis Storm Securities, Almandro Jansen, has said that while Namibia\u2019s reclassification from an upper-middle-income to a lower-middle-income country may open up short-term financing opportunities, it also calls for greater urgency in addressing inequality, youth unemployment, and economic transformation. The World Bank this week, in its latest income …<\/p>\n","protected":false},"author":10,"featured_media":377965,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,24],"tags":[],"class_list":["post-377964","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","category-news"],"yoast_head":"\nDowngrade to lower-middle-income country a wake-up call \u2013 Economist Opines - Informant\u00e9<\/title>\n<meta name=\"description\" content=\"AN ECONOMIST from local stockbroking firm Simonis Storm Securities, Almandro Jansen, has said that while Namibia\u2019s reclassification from...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/informante.web.na\/?p=377964\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Downgrade to lower-middle-income country a wake-up call \u2013 Economist Opines - 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