Namibian economics to the point – September 2018 - Namibie Safari et Lodges - Gondwana Collection

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Namibian economics to the point – September 2018

Avatar of inke inke - 30. septembre 2018 - Economics

Brigitte Weidlich

September is usually the start of spring and rain in Namibia, but winter weather persisted with only the last week bringing warm temperatures. 

Prince William, grandson of Britain’s Queen Elizabeth, visited Namibia to learn more about wildlife protection. 

President Hage Geingob touched down in Guinea and Canada en route to the UN General Assembly in New York during late September. Earlier this month, he attended the China-Africa summit in China. 

According to latest statistics, white people in Namibia still own 70 per cent of commercial farm land. 

Several multi-million Namibia Dollar investments in the fisheries, energy and business sectors were announced. 

The second quarter saw Namibia’s economy shrink by 0.2 per cent. Petrol and diesel increased by 40 cents per litre, which marks the fourth fuel increase this year. The Ministry of Mines and Energy explained that it subsidised the increase via the National Energy Fund (NEF), otherwise the increase would have been 80 cents per litre. Fuel prices in Namibia are reviewed monthly. 

China to provide more loans to Namibia

Namibia has joined China’s ‘Belt and Road’ project, which is China’s rail and road infrastructure initiative for the African continent. President Hage Geingob said his government has signed an agreement in this regard, while attending the summit of the Forum on China-Africa Cooperation (FOCAC) in Beijing from 2 to 4 September. No further details were disclosed, however, China offered a finance package to Namibia for the construction of a brand new terminal for the Hosea Kutako International Airport, 40 km east of Windhoek.

Namibia might take out a loan of N$10 billion (about 55 million euros) from China to finance infrastructure projects such as the dual-carriage highway from Windhoek to Hosea Kutako International Airport, Namibia’s Finance Minister, Calle Schlettwein, said. China offered to finance the construction of a second desalination plant at the central cost. According to the minister, Namibia’s current debt with China stands at only N$1.99 billion (about 110 million euros). 

Interestingly, British mining company Rio Tinto plans to sell its Rössing Uranium Mine in Namibia to China. A Chinese state company already owns 90 per cent in the adjacent Husab Uranium Mine.

In another development, the long-envisaged Kudu Gas Power Plant near Oranjemund will not materialise, Minister Schlettwein told the local weekly newspaper Windhoek Observer, citing that it would be too costly in relation to the return of investment. The two-pronged project would have seen bringing gas off the Namibian coast to the shore and constructing an 800 MW combined gas-cycle power plant.

Britain’s Prince William visits Namibia

Prince William (left) is welcomed by Vice-President Nangolo Mbumba (right). (Photo: Brigitte Weidlich)

His Royal Highness, Prince William, the Duke of Cambridge and second in line for the British throne, spent two days in Namibia this month during his African trip, that also took him to Kenya and Tanzania. Prince William paid a courtesy visit to Vice-President Nangolo Mbumba to discuss Namibia’s wildlife conservation measures and Commonwealth issues. Namibia is a member of the Commonwealth. The Prince then visited communal conservancies in the Kunene Region to witness efforts by the government, communities and the private sector to protect wild animals, especially free-roaming rhinos and elephants, against poaching. Prince William is the patron of the British ‘Tusk Trust’, which supports the ‘Save the Rhino Trust Namibia’. He is president of the organisation ‘United for Wildlife’. This organisation will participate in the international conference on illegal wildlife trade in London on 11-12 October. “I wanted to come to Namibia to listen and learn [about wildlife conservation] – I am delighted that President Geingob will be attending that conference,” said the Prince during a reception at the British High Commission. 

HRH Prince William, the Duke of Cambridge has joined the Special Field Force of Namibia’s Police, game rangers and community game guards in the Kunene Region on a patrol to track black rhinos. (Photo: © Kensington Palace, London)

Investments in fisheries sector

Hangana Seafood, a subsidiary of the Ohlthaver and List Group, has bought and revived an abalone farm outside Lüderitz. After an investment of N$40 million (about 3.2 million euros), the abalone farm was re-opened by Fisheries Minister, Bernhard Esau, this month. The Hangana Abalone Farm can produce 35 tonnes of abalone, a highly sought-after seafood delicacy in Asia. Expansions are planned over the next three years for another N$20 million (about 1.8 million euros) to reach production of 300 tons per annum. The current workforce of 45 will gradually be increased to 300 workers.

In another development at Lüderitz, the state-owned company Fishcor has added two more fishing vessels to its fleet, which now consists of five vessels. The investment for the two new vessels came to N$120 million (about 6.6 million euros). 

During September, Merlus Fishing in Walvis Bay launched a N$45 million (about 3.5 million euros) wet fish factory, which can process and package thirty tons of wet-landed fish daily. Additionally, it invested in a N$23 million (about 4 million euros) ice plant to guarantee the freshness of their fish export. About 200 new jobs were created.

The Tunacor company, also in Walvis Bay, and its fishing right holders jointly invested in a squid (calamari) value addition factory for N$25 million. The raw squid is imported from Argentina and is cleaned, sorted and packaged for the local and global markets. Some ten tons of squid is produced per day by the newly employed 200 workers. Tunacor further invested N$35 million in a new jetty, which enables larger trawlers to dock simultaneously on either side of the jetty to offload their fish. 

Altogether 400 new jobs were created and the total combined value of investments in Walvis Bay was approximately N$130 million (about 7 million euros).

Applications for new fishing rights

Fisheries Minister, Bernhard Esau, announced that his ministry had received 5,193 applications for fishing licenses. The deadline ended on 31 August. Only about 100 fishing rights are available. A task team will process the applications by year-end. 

Asparagus factory coming soon

A Spanish company, Alimentarias de Navarra, which recently started a 60-hectare commercial asparagus farm near Ruacana in north-central Namibia, will construct a factory on the site. The asparagus will be put in tins for the local and export markets. The ground-breaking ceremony for the N$25 million (about 1.3 million euros) factory took place in September. By November 2018 the factory will be up and running, the company said.

Another solar plant constructed

The Italian company, Enertronica, has received financing from a Namibian bank for the construction of a 5.8 mega watt (MW) solar plant at Trekkopje near Arandis in the Erongo Region. The plant was completed in August 2018 and provides electricity for the national grid. Total costs came to N$137 million (about 7.6 million euros). 

No luck with oil search

The British-based company, Tullow Oil, has withdrawn from its ‘Cormorant-1’ exploration well off the Namibian coast. Drilling started in early September and reached a depth of 3,855 m. Instead of oil, water-bearing layers were found and non-commercial hydrocarbons. The well is now being plugged and abandoned. Wet gas layers indicative of oil were also found. Tullow Oil Exploration Director, Angus McCoss, said in a statement: “The Cormorant-1 frontier exploration well was a bold attempt to open a new oil play in this area of Tullow’s offshore Namibia acreage. Gas readings support the concept that there is a working oil system in the area.”

Windhoek to build 1,200 houses by 2019

The Windhoek Municipality plans to construct 1,200 low-cost houses for low-income earners by the end of 2019. N$148 million (about 8.2 million euros) are set aside for this project. The Windhoek City Council adopted the project at its recent monthly meeting.

Economy shrinks again in Q2

Namibia’s economy has again recorded negative growth in the second quarter. According to the Namibia Statistics Agency (NSA) the economy shrunk by 0.2 per cent, the same as during the first quarter. Since the second quarter of 2016, Namibia’s economy has recorded nine quarters of consecutive negative growth. Good news is that the trade deficit narrowed in Q2 by 87 per cent. Exports increased by 19.6 per cent to N$22.8 billion (about 12.2 million euros) while imports dropped by 15.4 per cent to N$24 billion (about 1.3 billion euros). This leaves a current trade deficit of N$1.2 billion (about 6.6 million euros). 

Takeover of well-known hotel stalled

The envisaged takeover of the Safari Hotel and Conference Centre by the United Africa Group (UAG) will no longer take place. No reasons were given. In December 2017, UAG applied to the Namibia Competition Commission (NaCC) to buy the hotel. The NaCC had set stringent conditions such as outsourcing the hotel management to an outside company for ten years and that no retrenchments should take place.

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