In February 2012, I wrote a short status update on my Facebook profile, that the Taxi Fare in Namibia would go up by may be as little as 5% within a few weeks. But today, Die Republikein Newspaper states that at end of April, it will go up by N$1, from N$8 to N$9, which is an increase of about 11%. That’s nearly a double increase from what I thought it would be.
Now, here is the issue in Namibia; inflation (price) has been rising fast over the years, while the unemployment rate is also rising at the same time; hence stagflation.
This should have been in reverse; that if the consumer price is rising then there should be lots of employment creation opportunities or better salaries and wages. But the price of consumer goods (taxi fare, bread, flour, cooking oil, etc) is rising while everything else remains neutral or even going downward spiral.
Okay, we assume that this is all due to the rising price in the global energy consumption, but should we still blame China and India for their massive consumption of electricity or is it due to the cut down in oil import from Iran due to the US sanctions and trade embargoes on Iran?.
So what’s the Bank of Namibia doing to help curb down all of these, so far nothing. Could BoN step up to perhaps cut down on the interest rates to help boost consumer and banking lending? Oh, sorry I forgot; most Namibians are unemployed, hence they may not be able to apply and get qualified for bank loans, also Namibia’s Monetary Policy is tied directly to the South African Central Bank, so unless the SA Central Bank acts on its interest rates, we may not see too much happening at BoN.
What can BoN do to help boost economic growth? How’s monetary and fiscal policy playing on at BoN?