Macroeconomic Determinants of Private Investment in Namibia

No Thumbnail Available



Journal Title

Journal ISSN

Volume Title




An econometric analysis of the cleteyminants of private investment wi th the aid of the Engle and Granger (2987) Tr,.,-o-s tel? IHocedure suggest that in the long-run private investment is affected positively by public investment, real gross domestic product (real output), credit to the private sector, depreciation of the exchange rate and negatively by an increase in the inflation and real interest rate. In the short-run an increase in public investment and real gross domestic product (real output) stimulates private investment in Namibia. However, increases in inflation and real interest rates as well as depreciation of the exchange rate were found to inhibit private investment in the short run. The central policy recommendation of this study is that the maintenance of a stable macroeconomic environment is crucial to efforts aimed at encouraging private investment and thus toward laying the foundation for sustained economic growth in Namibia. These will be derived from a low and stable inflation rate, stable and predictable exchange rate, reduction in unemployment levels brought about by increased private sector participation in the productive sector of the economy, and by limi ting the role of the public sector to the provision of essential services that do not compete with the private sector for scarce credit.



Determinants of Macroeconomic