South West Africa
The economy is heavily dependent on the extraction and processing of minerals for export. Mining accounts for 8% of GDP, but provides more than 50% of foreign exchange earnings. Rich alluvial diamond deposits make Namibia a primary source for gem-quality diamonds. Namibia is the world's fourth-largest producer of uranium. It also produces large quantities of zinc and is a small producer of gold and other minerals. The mining sector employs only about 3% of the population while about 35-40% of the population depends on subsistence agriculture for its livelihood. Namibia normally imports about 50% of its cereal requirements; in drought years food shortages are a major problem in rural areas. A high per capita GDP, relative to the region, hides one of the world's most unequal income distributions, as shown by Namibia's 70.7 GINI coefficient. The Namibian economy is closely linked to South Africa with the Namibian dollar pegged one-to-one to the South African rand. Until 2010, Namibia drew 40% of its budget revenues from the Southern African Customs Union (SACU). Increased payments from SACU put Namibia's budget into surplus in 2007 for the first time since independence. SACU allotments to Namibia increased in 2009, but will drop for 2010 and 2011 because South Africa went into recession during the global economic crisis, reducing overall SACU income. Increased fish production and mining of zinc, copper, and uranium spurred growth in 2003-08, but growth in recent years was undercut by poor fish catches, a dramatic decline in demand for diamonds, higher costs of producing metals, and the global recession. A rebound in diamond and uranium prices in 2010 provided a significant boost to Namibia's mining sector. Copper mines, which closed in 2008, are slated to reopen in 2011.