15 February 2013

Namibia: Geingob Sceptical About World Bank

PRIME Minister Hage Geingob has cast doubt on whether Namibia is enjoying any benefits from its continued membership of the World Bank.

Speaking to a visiting delegation of the World Bank yesterday, Geingob said he had been fighting for many years to have international institutions take cognisance of Namibia's unique situation when loans and grants are advanced.

Namibia is rated as a middle-income country by many international institutions such as the World Bank, but has one of the world's highest income disparities.

Geingob said although the country has a relatively high gross domestic product (GDP), the riches of the country are entrenched in the hands of about only 10 percent of the population. Therefore, using the country's GDP to determine the type of loans and grants it is entitled to is not justified.

"What does a country like Namibia benefit from being a paid-up member of the World Bank," Geingob wanted know from Asad Alam, the World Bank country director assigned to Namibia.

Alam said although it might not be fair to classify Namibia as a middle-income country given its income disparity, the country stands to benefit in other ways from its membership of the bank.

He said Namibia could gain access to financial instruments with a long period of maturity, as many as 30 years, and benefit from the global knowledge of the World Bank in matters such as nutritional issues, debt management and financial evaluation systems.

The economist said the World Bank has also been promoting private investment in Namibia with the collaboration of the Finance Ministry and the National Planning Commission. He said the bank is actively promoting Namibia's successes, such as the country's excellent initiatives to protect biodiversity, internationally.

Alam said it is unfortunate for Namibia that the International Development Association (IDA) uses a country's GDP when determining loans and grants.

He urged Namibia to constantly engage donor countries contributing to the coffers of IDA to recognise the unique situation of the country.

"I agree that there are pockets of extreme poverty in countries with high GDP," he said, citing the example of Romania in East Europe.

IDA is one of the two arms of the World Bank and provides loans and grants to the poorest countries.

Geingob also asked why countries such as Namibia should borrow money from the World Bank if they can get cheaper loans from other sources such as Germany and South Korea.

"As a fiscal economist I would advise you to get loans where they are cheaper and maximise the potential of foreign borrowing but you should be wary of the maturity period of such loans," Amal advised.

He said his visit was aimed at finding out how the World Bank could be involved in Namibia's development plans for the next few years.

The meeting was also attended by Finance Minister Saara Kuugongelwa-Amadhila and the National Planning Commission's director general, Tom Alweendo, who deliberated with the World Bank delegation behind closed doors.

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