Namibian Economics to the Point – January 2018 - Namibia Safari and Lodges - Gondwana Collection

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Namibian Economics to the Point – January 2018

Avatar of inke inke - 01. February 2018 - Economics

Brigitte Weidlich

As usual, the year started in quiet mode due to the summer break. Rainfall in January has been scarce, despite positive forecasts from the meteorological authorities. Crop farmers especially, are becoming concerned. Inflation for December 2017 stood at 5.2%, the national statistics authority announced in mid-January.

Presidential New Year’s message 

President Gage Geingob said the government would step up its efforts to “find workable solutions to the long-standing issue of land accessibility and affordability”. More people will be connected to basic services like water, sanitation and electricity, Geingob emphasised in his televised New Year’s message. Additionally, the government would continue prioritising road maintenance and road construction throughout the country. “We also aim to pursue other infrastructure development projects including airports, ports and rail developments and upgrades”, he said. “We are mindful that the economic headwinds we faced in 2017 will continue into the New Year”. Government would continue cutting costs to stay within its fiscal targets, Geingob noted.

Fight against corruption

On New Years’ Eve the Anti-Corruption Commission (ACC) confiscated over 30 tons of African rosewood (‘makula’) at a road block outside Walvis Bay. The wood was smuggled through Namibia via Zambia and was destined for China. 

The Home Affairs Ministry has started issuing biometric passports (e-passports) from 8 January onwards. Namibia is now one of 120 states issuing these passports, which have a chip. This makes them corruption-proof. 

Big investment in mining

The Canadian company Namibia Rare Earths, is in the process of acquiring 95 percent of the local mining company Gecko Namibia. Namibia Rare Earths, has exploration rights near Khorixas in Namibia for heavy rare earths, which are crucial for the manufacturing of smart phones, hybrid vehicles and computers, to name but a few. Gecko Namibia, is developing several mining projects: cobalt (Kunene Region), graphite (near Otjiwarongo), tantalite (near Warmbad), lithium, zinc and gold.  

In other mining news, the Namibian government decided not to buy additional shares in Rio Tinto’s Rössing uranium mine in Namibia. It was offered to buy the ten percent stake of South Africa’s public enterprise Industrial Development Corporation (IDC). The price tag was N$402.7 million, a local newspaper reported. The acquisition would have been done through Epangelo Mining, wholly owned by the Namibian government. 

Minister of Mines and Energy, Obeth Kandjoze, reportedly said low uranium prices and an expensive price per share influenced the decision not to buy. Namibia’s government has three percent shares in Rössing Uranium. Rio Tinto owns about 69 percent, South Africa 10 percent, the Iranian government 15 percent and private smaller shareholders hold a 3 percent stake. 

And here the latest about salt mining: The company Walvis Bay Salt Refineries this month exported 50,000 tons of salt to the USA. It took six days to load the freight ship ‘Condor’ with the 50,000 tons, which is the biggest single salt shipment from Namibia. 

News from the business front

South African mobile giant MTN plans to become operational in Namibia market this year. Through its subsidiary MTN Namibia, the company wants to offer e-based software and security solutions for companies, apart from mobile connectivity. The subsidiary recently acquired 30 percent in the local company, Profile Technologies. The Namibia Competition Commission (NaCC) must however still give its approval. 

The NaCC has in the meantime rejected an application by Namibia Post and Telecommunication Holdings (NPTH) to buy 34 shares in local mobile communication technology company MTC. Government already owns 66 percent in MTC, while NPTH is also government-owned. NPTH is the holding company of MTC and also owns the public company Telecom Namibia with its subsidiary, TN Mobile. The competition commission found that an acquisition of the remaining 34% in MTC would hamper competition and create a monopoly. Samba DutchCo B.V. in the Netherlands owns 34% in MTC.

Over 500 new houses to be built

Some 360 houses will be built at Otjiwarongo for low income earners through a public-private partnership with the municipality. Forty constructed houses were handed over to beneficiaries this month. Altogether 465 plots for additional low-cost houses were serviced. In Oshakati construction of 200 of the planned 360 houses started. Fifty new houses will be built in Omuthiya, said Urban and Rural Development Minister Sophia Shaningwa. The houses for Oshakati and Omuthiya are constructed by the State-owned National Housing Enterprise (NHE). 

In the meantime, the Government Institutions Pension Fund (GIPF) has to date financed some 2000 home loans for civil servant worth N$1 billion. Government decided a few years ago that civil servants, including Police and Defence members can borrow a certain amount against their pension to build houses for their own use. Namibia has a housing backlog of about 140,000 units.

In a similar vein, former President Hifikepunye Pohamba donated three new classrooms to a rural school In the Kavango West Region this month. Construction costs came to about N$1 million.

Tourism doing well

The Hospitality Association of Namibia (HAN) announced that the 2017 tourism season was again very good. HAN members recorded average room occupancy of 58.5 percent, one percent lower than 2016, which was regarded as an exceptionally good year.

News on the environmental front is that the CEO of the Environmental Investment Fund (EIF) of Namibia, Benedict Libanda, was selected as one of 35 international experts for the UN Green Climate Fund (GCF). The 35 experts will develop best practices for climate change adaptation. 

Concern and hope: Namibia’s feral horses

Namibia’s feral horses could become extinct due to the ongoing drought and the continued danger from hyenas, the Namibia Wild Horses Foundation said this month. The internationally famous horses are a huge tourist attraction, but their numbers this month declined to only 83 horses. While donations to feed the horses pour in after successful pleas, the only solution seems to relocate the horses to a nearby private farm for a few years. A proposal was submitted to the Ministry of Environment and Tourism. In a press statement, the MET stated it was aware of the public’s concerns about the survival of the horses. All options would be weighed before a decision would be made.  

Prominent visitors

The Speaker of the Finnish Parliament, Maria Lohela paid an official visit to Namibia. She told local media she would soon organise a high-level delegation of Finnish politicians and business people to explore economic investment possibilities on Namibia. 

Chinese Deputy-Agriculture Minister Qu Dongyu signed a cooperation agreement in Windhoek with Namibia’s Agriculture Minister John Mutorwa. The UN’s Food and Agriculture Organisation (FAO) is also involved. This will involve Chinese and Namibian companies to create value additions to agricultural products, including aquaculture. Several Chinese experts have supported a successful rice cultivation project in the Zambezi Region in the past years. In the second phase, requiring a new agreement, value addition will commence.

Livestock marketing improved

The Meat Board of Namibia released the latest marketing statistics for 2017. Some 421,000 cattle were traded last year, of which 313,000 cattle were exported on hoof to South Africa. Some 172,000 cattle were slaughtered at local abattoirs within Namibia. 

A total of 394,000 sheep were exported to South Africa, while 310,000 sheep were sold and slaughtered locally, bringing the total to 704,000 sheep traded in 2017.

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