EDITORIAL The rapidly growing public debt, now estimated at a whopping 76% of our gross domestic product, is plunging our country into real trouble. In fact, the signs of the looming tragedy have already started to show – including the fact that more money has been allocated to servicing debts than to development.The question on many Namibian lips – and it’s a legitimate one – is whether this whirlwind borrowing has actually contributed to economic growth in this country. And the answer is a resounding no.
Our economy has been declining at the same speed as our borrowing has grown. Conventional wisdom would dictate that borrowed money must be invested in the productive sectors of the economy to stimulate growth and create jobs.
One must break eggs in order to make an omelette. Painful decisions needed to be made, such as slowing down on social spending so that borrowed money is channelled to more sustainable economic activities to stimulate growth.
Rome was not built in a day, and neither will a more vibrant economy. It takes fortitude, patience and steadfastness to build economies, and borrowing without investing into growth isn’t one of the formulas to do this.
As if we are not in enough trouble already, yesterday government announced yet another loan of N$1.5 billion from the African Development Bank. Treasury is hiding behind the Covid-19 pandemic but, in truth, this is a continuation of a well-established reckless tradition.