Namibia tops small states for unemployment

Namibia records the highest broad unemployment rate among small states (population under five million) with available data, at 52.7% according to Ilostat’s most recent estimates.

This persists despite the country’s deep mineral resource base, developed transport network and position as a gateway into southern Africa.

Landlocked Botswana, which relies partly on Namibia’s routes, fares far better at 22.0%.

Resource wealth does not automatically spill over into broader job creation, mining is capital-intensive and strong resource earnings can crowd out other tradeable sectors.

The closest comparator, Djibouti (52.5%), shows a similar pattern built around a port rather than mines with low levels of development in other sectors.

Avoiding this concentration requires reinvesting resource revenue in the domestic economy, but pace and targeting matter.

Spent too quickly, the revenue can fuel fiscal pressures behind Dutch disease, which is why many resource exporters save a portion of revenue in a sovereign fund and draw it down gradually.

Even Botswana, which managed its diamond revenue well and invested heavily in infrastructure and education, remains concentrated in diamonds.

Spending works best when targeted at skills, infrastructure that lowers costs for other sectors and local supplier development, rather than expanding public sector payrolls.

With the potential development of an oil an gas industry, Namibia has a second chance to reinvest extractives earnings into developing domestic sectors.
– Ida Williams is an economist at Cirrus.

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