Namibian Economics to the point - March 2019 - Namibie Safari et Lodges - Gondwana Collection

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Namibian Economics to the point - March 2019

Avatar of inke inke - 31. mars 2019 - Economics


Brigitte Weidlich

March was yet another month with hardly any rainfall and a drought is imminent. Cabinet decided to avail N$272 million (about 16.5 million Euros) drought relief to farmers and rural inhabitants from April onwards. Kenya’s President Uhuru Kenyatta noted during his state visit that economic cooperation with Namibia should be enhanced. Finance Minister Calle Schlettwein tabled the new budget of N$66.5 billion (about 4 billion Euros) on 27 March for 2019-20. Namibia’s unemployment rate stands at 33.4 percent, according to the latest survey, down from 34 percent in 2016. The inflation rate was 4.4 percent in February, down from 4.7% in January, the national statistics agency announced. Namibia has joined other countries banning its airspace for Boeing 737 Max passenger aero planes after the fatal crash of a Boeing in Ethiopia in early March. Namibia’s largest meat factory, Meatco exported its first consignment of beef to China this month.

New budget leaves little room for fiscal space

Finance Minister Calle Schlettwein tabled the new budget of N$66.5 billion (about 4 bn Euros) in Parliament, which revealed a budget deficit of N$8.1 billion (49 million Euros) or 4.1 percent of GDP. Income tax for salary earners and corporate taxes remained unchanged. Government debt stands at N$96.2 billion (about 5.8 billion Euros) or 49% of GDP. 

Finance Minister Calle Schlettwein delivered his budget speech in Parliament on 27 March 2019. Photo by: Ministry of Information & Communication Technology (MICT), Namibia

Schlettwein announced that he would introduce several tax reforms like a dividend tax of ten percent and increased levies for timber, mining and other products to come into force from April 2020. The highest budget allocation of N$13.8 billion (about 84 million Euros) went as usual to basic education, the health sector receives N$6.9 billion (about 42 million Euros) and the Defence Ministry N$.5.9 billion (about 35 million Euros), Police and correctional Services N$5.5 billion (about 33 million Euros). State pensions were increased by N$50 per month to N$1300 (about 80 Euros). The new financial year starts on 1 April and ends on 31 March 2020.   

29 years of independence 

On 21 March Namibia celebrated its 29th independence anniversary in a Windhoek sports stadium. Guest of honour was Kenyan President Uhuru Kenyatta. President Hage Geingob said Namibians had a lot to celebrate since 1990, among them peace, stability and development. “There are those who say there is nothing to celebrate. Where were they fifty years ago? We have achieved a lot in 29 years,“ Geingob said. In an interview with the state-owned newspaper New Era, Geingob stated that the government wage bill was too huge and the amount of civil servants had to be reduced. He also said that he would decrease Cabinet, “it is too big,” he said. 

Namibia receives tourism award in Berlin 

Namibia was declared the Best Safari and Wildlife Destination and Best Emerging Destination by the Pacific Areas Travel Writers Association (PATWA). This was announced at the Internationale Tourismus Börse (ITB) in Berlin, which took place in early March. The Minister of Environment and Tourism Pohamba Shifeta was also named ‘Best Tourism Minister’ by PATWA. 

MET Minister Pohamba Shifeta (front, centre) received an award at the ITB in Berlin. Photo by: MET

Accepting the awards, Shifeta said credit should go to the women and men in rural areas who live with wildlife and strive for balanced land use. “The awards could not have come at a better time than now, while we are battling to control poaching of our rhinos and elephants. This will encourage us as the authority and our various stakeholders to do more to stop poaching of high value species,” Minister Shifeta said. The ITB attracts thousands of visitors each year. Namibia was also represented, including the tourism company Gondwana Collection.

Co-existence for humans and elephants 

Just a day before his departure to Berlin, MET Minister Pohamba Shifeta travelled to the Erongo Region on World Wildlife Day, which is on 3 March. At the small village of Omatjette the Minister handed over some infrastructure to reduce conflicts between the villagers and elephants. Eleven boreholes were rehabilitated and solar water pumps were installed at eight other boreholes. In addition, four new dams were constructed exclusively for the use of the wild elephants. A newly constructed store room from bricks for livestock feed was also handed over to the communal farmers at Omatjette. “We are confident that these improvements will support a peaceful co-existence between humans and wild elephants.”

More investments in Namibia

One of Namibia's paint manufacturers is expanding. Neo Paints announced it will build a brand new paint factory at Brakwater outside Windhoek. Since its establishment some fifty years ago, the paint factory has remained at its original premises near the Windhoek show grounds. 

In another development local business tycoon Martin Shipanga has recently invested N$20 million (about 1.2 million Euros) into a wholesale medical supply business at Okahandja, 60 km north of Windhoek. Shipanga said they have positioned their business to source directly from manufacturers to create affordable medical services to healthcare service providers. Supplies range from biomedical laboratory supplies to rapid diagnostic tests and are offered to health practitioners, as well as private and public health centres in Namibia. Some 35 new jobs were created. The company aims to also supply neighbouring countries. 

Meat Board releases livestock trade figures

Namibia’s livestock industry is valued at an estimated N$4.6 billion (about 28 million Euros) or 4.3 percent of all goods and services produced by Namibia annually. The Meat Board releases production figures for 2018 this month. “Namibia produced a net trade surplus of 6,700 tons of beef and 2,900 tons of mutton in 2018. In addition, Namibia exported more than 305,000 live cattle, over 450,000 live sheep and more than 145,000 live goats to partner countries in 2018”, the Meat Board stated. Altogether 427,000 local cattle were traded (including exports), 825,000 sheep and 153,000 goats in 2018.

Meanwhile the Namibia Agricultural Union released production figures of 2018 for charcoal, which did well in 2018 with the income value increasing from N$184.8 million (about 11.2 million Euros) in 2017 to N$306.7 million (about 18.7 million Euros) in 2018. The huge increase of 66 percent was attributed to increased production and higher prices. The Swakara karakul fur industry experienced a big decline in production value of about 32 percent in 2018, compared to 2017. Income value decreased from N$45.5 million (2017) (about 2.7 million Euros) to N$30.7 million (about 1.8 million Euros) in 2018, due to lower prices paid and a fewer quantities marketed. Cabinet approved N$572 million (about 34.8 million Euros) for drought aid but from 1 April.

Germany’s Schwenk group leaves Namibia

The holding company of the Ohorongo cement factory, Schwenk Zement in Ulm, will sell its 68 percent shareholding in Namibia to a cement factory from Singapore, subject to approval from Namibia’s competition commission. The buyer is International Cement Group Ltd. (ICG), from Singapore. ICG is listed on the Singapore Stock Exchange. “Our core business is cement with a key focus to invest in production, sale and/or distribution of cement in Central Asia, Africa and South-East Asia,” ICG said. The acquisition of Ohorongo Cement near Otavi marked ICG’s first venture into the African cement market. The deal is expected to be concluded by July 2019. Schwenk said it divested its Namibian assets according to its strategy to concentrate on its core business of cement, concrete and aggregates in Europe. 

The Ohorongo cement factory is situated near Otavi. Photo by: Ohorongo Cement

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