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

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Gondwana's Newsroom

Namibian Economics to the Point – February 2018

Avatar of bernd bernd - 02. March 2018 - Economics

Brigitte Weidlich

February 2018, similar to January, was another month of little rainfall in most parts of Namibia. Government announced austerity measures for the next three years, while a long-awaited Cabinet reshuffle took place. Inflation in January dropped to 3.6%, compared to 5.2% in December 2017 and 8.2% January 2017 according to the National Statistics Agency (NSA).

The Namibian Dollar, which is pegged to the South African Rand, strengthened this month against the US Dollar and the Euro after Jacob Zuma resigned and Cyril Ramaphosa became South Africa’s new president. 

Bank Windhoek, Namibia’s only commercial bank wholly owned by Namibians announced it started trading the Chinese currency, yuan, this month. It is the second commercial bank in the country trading the yuan, after Standard Bank. The World Bank reduced its 2018 economic growth outlook for Namibia from four percent in June 2017 to three percent in its latest “Global Economic Prospects” report. In January, 881 new vehicles were sold in Namibia, slightly more than in December 2017 (835 vehicles).

Reshuffles and new appointments

This month President Hage Geingob announced his first Cabinet reshuffle since the start of his term in March 2015. Works and Transport Minister Alfeus Naruseb was moved to the Ministry of Agriculture and he swapped with the former Agriculture Minister John Mutorwa. Mines and Energy Minister Obeth Kandjoze changed seats with Tom Alweendo, former Planning Minister and head of the National Planning Commission. Finance Minister Calle Schlettwein retained his portfolio. 

The press secretary in the Office of the President, Albertus Aochamub has been appointed as acting CEO of the Namibia Airport Company (NAC) for twelve months. The new press secretary and presidential spokesperson since 19 February, is Dr Alfredo Tjiurimo Hengari. He is a political scientist with inter alia a Master’s degree in international studies. The long-serving chief executive officer of the Walvis Bay Corridor Group (WBCG), Johnny Smith has been appointed as new CEO for the public transport enterprise TransNamib.

Progress with new economic empowerment (NEEEF)

The Cabinet held a closed-door session about the proposed New Equitable Economic Empowerment Framework (NEEEF) on 27 February. This framework would make it compulsory for every company in the private sector to provide 25 percent equity to previously disadvantaged Namibians. The equity will have to be bought via loans. In his opening speech President Geingob said NEEEF must be seen as an essential policy tool “to correct the historical racial and gender inequalities in the distribution of economic opportunities, access to wealth, income, assets, capital, skills, and employment.”

Farmers win case against land tax 

An urgent motion brought before the Windhoek High Court by several commercial farmers to temporarily halt the payment of compulsory land tax until their pending court case dating back several years is heard, was successful. Deputy Judge-President Hosea Angula ruled on 22 February that farmers need not pay land tax to the Ministry of Land Reform until the other case has been argued in court and a ruling is made. Farmers had raised concerns about high valuations on the 2012 valuation roll. In 2017 a new valuation roll was published and again over 2,000 farmers raised concerns at a special valuation court hearing about the methodology applied to establish the value of farms. According to lawyers representing the plaintiffs, this case might be put on the High Court roll in August/September.

Austerity measures until March 2021

The Office of the Prime Minister has on 1 February, issued drastic saving measures in the Public Service for the next three financial years until March 2021. Official foreign travels for civil servants have been reduced to two trips per year, while only four trips annually are allowed inside Namibia. Delegations should be kept small. This will cut claims for daily allowances. Overtime work and claims for such work must be reduced. Vacant posts must be abolished if they have not been filled after six months. No new office furniture may be purchased, unless absolutely necessary. 

Defence Minister explains purchase of N$45 million Oropoko Lodge farm 

The Minister of Defence Penda Ya Ndankolo said the acquisition of the Oropoko Farm near Okahandja with its luxury Oropoko Lodge for N$45 million, was a good investment. Reacting to media reports about the sale, the Minister told Parliament, farm owner Kurt Steinhausen, a German national had originally offered the farm to the government for N$103 million (about 8 million Euros). The farm had a world class shooting range and a helicopter landing pad, according to the Minister. The farm was bought in early 2017; some 300 soldiers are now housed there. The Defence Ministry had just days earlier, published full-page advertisements in local newspapers, explaining it had sent thirty percent of its soldiers on forced leave in order to save costs for water, electricity and food in the military bases.

More towers for mobile communication

Namibias mobile telecommunications company MTC will erect over 500 towers to cover all areas in Namibia with 2G and 3G communication technology, including farms. The acting MD of MTC, Thinus Smit said that 524 new towers will be erected countrywide over the next two years and many will be on farms. About 63 existing towers were recently upgraded from 2G to 3G. An MTC tower at Leonardville, which was blown over by heavy winds was repaired this month and is functional again. 

New investments 

The Avani Hotel in Windhoek (formerly Kalahari Sands Hotel) has invested N$24 million in renovations and the expansion of its premises at the Gustav Voigts Centre. Another reception was added for tourism groups and they need not use the escalator with their luggage. A restaurant/cum coffee shop “The Pantry” has been added with views directly onto the hustle and bustle of Independence Avenue. 

The Ohlthaver & List Group’s subsidiary Hangana Fishing has invested in abalone cultivation at Lüderitz. Hangana Fishing bought the abalone farm in 2017 for N$13,9 million, saving 23 jobs as the farm had been placed under provisional liquidation by the DBN. O&L has through Hangana invested N$20 million to turn the abalone business around. One kilogramme abalone fetches about 35 US$, which is about N$410. Abalones take four years to grow for harvest & export to mainly Asian markets, where they are regarded as a delicacy.

The British mining company Weatherly International, will increase its stake in the Berg Aukas Mine near Grootfontein. Weatherly is mining copper near Tsumeb. Berg Aukas was bought up by China Africa Resources Namibia (CARN) some years back. Zinc, lead and vanadium can be mined at Berg Aukas. Weatherly already owns 25% shares in the mine. It offers US$600,000 CARN’s mother company Hong-Kong East China (ECE) to buy 65% more shares to obtain 90% ownership of Berg Aukas.

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