Namibia: Labor Markets and Resource Dependence

With high unemployment, especially among the youth, Namibia lags behind the SSA region on labor market outcomes. Between 2012 and 2018, there was a structural shift in the economy from agriculture to services, as younger workers took up low-productivity service sector jobs. A shift-share analysis highlights that resources are not allocated to relatively more productive firms in the services sector, consistent with the weak real GDP per capita growth. The ongoing oil and gas exploration (and potential production in the future) offers an opportunity for economic growth and job creation, but also presents risks of worsened labor market outcomes.