Factors Influencing Investment: A Case Study Of The Namibian Economy

Abstract

This study makes use of ordinary least squares (OLS) technique in conjuction with

the cointegration and error correction models to determine factors influencing

investment in Namibia, using data for the period 1960-2006. The results suggest that

in the long run, real investment in Namibia is positively related to and influenced by

GDP and investment in uranium mines by Rossing during 1970s, while negatively

related to the prime lending rates and the inflation rates. In the short-run, investment

is positively influenced by three variables namely; real GDP, domestic savings and

prime lending rates. The study recommends a review of the administration of the

investment regime with the view to come up with a simpler and transparent regime.

It further recommends that quality of governance and property rights protection be

maintained to enhance investors’ confidence. Finally, recommendation is made for

further research incorporating issues of qualitative nature as raised in the limitation

of the study.

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