German aid and trade versus Namibian GDP and labour productivity.

This paper examines the effects of German foreign aid to, and net trade with, Namibia on Namibia's recent (1985-95) economic performance. The analysis suggests significant benefits for Namibia from trade with and assistance from Germany. However, domestic capital is found to determine Namibian economic growth more than net trade with Germany and German foreign aid to Namibia, while the effect of German capital tends be larger than that of German aid. A need for direct foreign investment from Germany to Namibia is inferred. Two types of further investigations are required: a joint determination of economic growth, aid, trade and capital formation, and a disaggregation of German aid to Namibia with an analysis of its individual impacts compared with similar effects of aid from other donors. [ABSTRACT FROM AUTHOR]