An Analysis of the Potential of Manufacturing and Services Sectors as Drivers of Economic Growth and Development in Namibia

Abstract

The purpose of this paper is to analyse the potential of the manufacturing and services sectors as drivers of economic growth in Namibia. The paper uses the intersectoral linkage analysis method to identify the industries with the greatest backward and forward linkages. The economy-wide impact of these industries is simulated further using a CGE model. The greatest backward linkages for manufacturing industries were found in meat processing, fish processing, grain milling, basic metals and construction. The greatest backward linkages for the tertiary industries were found in trade and repairs, hotels and restaurants, finance and insurance, and other private services. The greatest forward linkages for manufacturing industries were found in paper and printing, chemicals and rubber, fabricated metals and machinery, and electricity generation and distribution. The greatest forward linkages for tertiary industries were found in transport, communication, finance and insurance, and market real estate and business services. These, therefore, are the sectors that policies could target as they have greatest impact and could enable Namibia to achieve higher levels of growth. Further, simulation results are obtained from a CGE model by introducing direct exogenous increases in the output of the perceived key industries and examining the economy-wide feedback effects.