Namibia has received support of around $271 million (R3.8bn) from the International Monetary Fund (IMF) to counter the effects of Covid-19 on the country’s economy.“Namibia has been severely affected by the Covid 19 pandemic,” said IMF acting chair and deputy managing director Mitsuhiro Furusawa, in a statement announcing the decision by the IMF executive board. “Worsening global conditions and a local outbreak have worsened the short-term macroeconomic outlook. The economy is estimated to have sharply contracted in 2020 and the recovery is expected to remain subdued in 2021,” said Furusawa. “Furthermore, the negative impact of the pandemic and necessary mitigation measures have triggered urgent balance of payments and fiscal financing needs. “The disbursement under the Rapid Financing Instrument will support Namibia in promptly addressing these needs and help catalyse additional financing from development partners.” He said authorities were implementing a comprehensive response plan to address the Covid-19 health emergency and mitigate its severe socio-economic impact. “As the impact of the crisis subsides, the authorities will implement a growth-supporting medium-term fiscal consolidation aimed at preserving debt sustainability. “To this end, moving forward with planned fiscal reforms to increase expenditure efficiency and mobilise additional tax revenues will be key. Structural reforms remain essential to promote broad-based, inclusive growth.”The Namibian economy is estimated to have contracted by 7.2% in 2020, and the recovery is set to remain subdued at 2.1% in 2021. The IMF funding will be used for stepping up emergency health and education spending, strengthening social safety nets to protect the most vulnerable from the impact of the crisis, and supporting the private sector and protecting jobs, according to an IMF statement.
