EXCLUSIVE: Economic Analyst Josef Kefas Sheehama Discusses the Prospects of Namibia’s Rand-Nam Dollar Divorce

February 19, 2024/ Leonard Witbeen

In a recent commentary, independent economic and business researcher Josef Kefas Sheehama shared his insights on the possibility of Namibia distancing itself from the South African Rand and adopting its own currency, the Nam Dollar. The discussion primarily revolved around the potential economic impacts and the timeframe within which such a transition could occur.

Sheehama initiated his remarks by acknowledging the importance of the issue and highlighting the necessity of a cautious approach. He emphasized that divorcing the Rand in favor of the Nam Dollar, particularly with a focus on green hydrogen and oil recovery prospects, is a strategic move that will unfold over the long term rather than providing immediate results.

Addressing concerns about Namibia’s current economic stability, the economic analyst pointed out that the country’s central bank, the Bank of Namibia, currently lacks the independence needed for such a transition. He underscored the significance of a robust political agreement and the accumulation of sufficient reserves to facilitate a smooth shift.

Delving into the specifics, he mentioned Namibia’s international current reserves, standing at approximately 49 billion. While acknowledging the potential influx of foreign direct investment (FDI), he projected that the divorce from the Rand might take anywhere from 10 to 20 years. This extended timeline, he argued, allows for a more measured and calculated approach, reducing the associated risks.

Mr. Sheehama emphasized the importance of considering the country’s exposure to foreign currency fluctuations and the dangers associated with pegging the Nam Dollar to other currencies. Moving away from the Rand, he suggested, could be a beneficial long-term strategy but cautioned against premature implementation.

In conclusion, Josef Kefas Sheehama recommended a prudent and observant stance. He urged the development of a strategic plan over the next 10 to 20 years, aligning the objectives of the Bank of Namibia and the nation at large. While acknowledging the potential advantages of divorcing the Rand, he stressed that immediate action is premature, advocating for a thoughtful and gradual transition to stand independently in the future.

As the debate surrounding Namibia’s currency continues, Josef Kefas Sheehama’s insights provide a valuable perspective on the complexities and considerations involved in the Rand-Nam Dollar divorce discussion.