The Vacillations and Oscillations of Foreign Direct Investment, Debt, Unemployment and Economic Growth Nexus in Namibia (eBook)

Academic Paper from the year 2020 in the subject Economics - Case Scenarios, grade: Masters, , course: Research Paper, language: English, abstract: It is the purpose of this paper to unravel the oscillations and vacillations of foreign direct investment, debt, unemployment to economic growth nexus. The nexus of good governance, unemployment, economic growth and FDI is essential. Good economic governance shows a positive effect on growth, attracts FDI, reduces unemployment and attracts economic growth.

Bad economic governance is inclined to reduce economic growth, increases unemployment, reduces FDI, cause people to languish in debts and delays people in the investment process. A positive sign of corruption indicates that the higher the corruption, the lower the inward FDI. The researcher disagrees that corruption is suitable for foreign investors. The pendulum is tilted where investors prefer not to invest in countries with high corruption where there is a lack of enforcement laws.

Further, foreign investors have created an ecosystem where local small businesses cannot compete. More worrying is the state's credit rating that has seen a consistent downgrade by major credit rating agencies, which now stands at sub-investment grade, or what is referred to as "junk status". The main reasons quoted for this declivity was going to the dogs of Namibia's financial robustness due to massive fiscal lopsidedness, an astronomic debt excess baggage and limited enterprise capacity to manage shocks and address long-term structural pecuniary rigidities.

There has been a rift between the youth haves and have-nots in term of job allocation. The total household debt in Namibia is made up mostly of mortgages, car loans, student loans and credit card debt. The car loans, mortgages, credit cards and student loans make up most of 95% of Namibia household debt.