Namibia: economic review - October 2016 - News - Gondwana Collection


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Namibia: economic review - October 2016

Avatar of inke inke - 31. octobre 2016 - Economics

Namibia's Minister of Finance, Calle Schlettwein. (Photo: Brigitte Weidlich)

This review highlights interesting developments about Namibia’s economy during the month of October 2016.

Marketing Namibia in the US

Namibia’s President Hage Geingob returned from his USA trip in early October. Apart from attending the UN General Assembly in New York, President Geingob hosted several business events in New York and in Washington. The aim was to inform the US business world about Namibia’s economy and the upcoming international investment conference in early November (see below).  

President Geingob was accompanied by several Cabinet ministers and representatives from the private sector like Sven Thieme, Executive Chairman of the Ohlthaver & List Group. Thieme is currently president of the Namibia Chamber of Commerce & Industry (NCCI). 

The Washington event coincided with the arrival of the first consignment of Namibian beef exports to the USA. Naturally, guests were treated to Namibia’s tasty and organic beef from free-range cattle. They could wash it down with another of Namibia’s famous export success, Windhoek Lager beer, brewed according to Germany’s purity law. Namibia has also been exporting beef to Hong Kong since September 2016. The largest volume of beef exports go to the European Union (approximately 9000 tonnes) and Norway (1,600 t). 

Fiscus cuts budget 

Finance Minister Calle Schlettwein announced budgetary cuts of some N$5.5 billion for the current financial year, which runs from April 2016 to March 2017. Schlettwein cited among others a downturn in the South African economy, to which the Namibian economy is closely linked, (growth of 0.1% is expected) and the Angolan economy in Parliament during is mid-year budget review speech on 27 October.

Negative exchange rates, the prevailing drought and low commodity prices such as uranium and copper added to the situation. “Domestic economic growth is estimated to have slowed to about 2.5 percent in 2016,” Schlettwein told Parliament. Public debt was projected to be 36.7% of GDP (gross domestic product) in the 2015/16 fiscal year but increased to 40.1% of the GDP. For 2016/17 it would rise to 42.4% of GDP unless saving measures were applied. As a result, the government cuts expenditure by N$5.5 billion.

New tourism strategies

Environment and Tourism Minister Pohamba Shifeta launched two new tourism strategies at the end of October. The ‘National Sustainable Tourism Growth & Development Strategy’ and the ‘National Tourism Investment Profile & Promotion Strategy’ map out plans for the next ten years, until 2026. 

The aims of both strategies are to increase tourism arrivals from the current 1.3 million to 1.5 million annual arrivals by 2020, amongst others.  More cruise ships are to be lured to Namibia through increased marketing. The number of tourists overnighting in communal conservancies is to increase from 4% to 10% over the next years. Rural communities and previously disadvantaged Namibians are to benefit more from the tourism sector though increased participation. Government also plans to establish a tourism investment promotion centre and a national tourism competitiveness council. The Namibia Tourism Board (NTB) will be restructured to concentrate on marketing and promoting Namibia.  

October was rounded off with the local tourism company Gondwana Collection receiving an award from the Development Bank of Namibia (DBN). Gondwana’s latest addition to its accommodation sector, The Delight Swakopmund received the “Good Business Award 2016” in the category Large Enterprises. The boutique hotel with modern, contemporary designs opened its doors in November 2015 and offers 44 double rooms and 10 loft rooms for families.

Economic support

Early in October, Namibia and Germany signed a financial and technical Cooperation Agreement between Germany and Namibia totalling €71.9million (approximately N$1.1 billion) in Windhoek covering the next two years. Both governments agreed to continue the successful cooperation in the three focal areas: natural resource management, sustainable economic development and transport/logistics. 

The importance of skilled labour for development was emphasised by as an important issue in all focal areas, through support to vocational education and training as well as higher education. The agreement includes grants of €30 million for projects to be financed through the German Development Bank (KfW). Individual projects to be funded, include the extension and maintenance of Namibian’s road network as well as infrastructure support to the extension of the University of Namibia (UNAM) campus in Ongwediva and Katima Mulilo in the North. 

A new project will improve solid waste management in Namibia’s protected areas. Additional funding was provided for the finalisation of the ongoing projects of the Namibia - German Special Initiative. The project will officially be closed at the end of the year. 

Some €39.9 million will be implemented through the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the Federal Institute for Geosciences and Natural Resources (BGR) for programmes such as vocational education and training.  Land reform is receiving further support as well sustainable use of Namibia's mineral potential. The institutional and management capacity of Namibia’s road sector will be strengthened as well as biodiversity management and climate change adaptation. Groundwater management in northern Namibia and (communal) conservancies will also receive support. 

Outlook for November

The Namibian government is holding a high level international investment conference on 8 and 9 November in Windhoek. Approximately 650 local and foreign investors are expected to attend. Twenty projects have been selected to be showcased during the conference, among them the envisaged Kudu gas and power project, the concentrated solar power (CSP) project and a large scale housing project for lower income groups. One of the invited international guest speakers is Germany’s former Federal Transport Minister, Wolfgang Tiefensee. He is currently Minister of Economy and Science in Germany’s federal state of Thuringia. Further details are available here

The Economic Association of Namibia (EAN), in partnership with the Hanns Seidel Foundation and The Namibian newspaper will host a constructive review of the state of the economy under the theme: ‘The Namibian Economy, Past, Present and Future’ on 10 November 2016. 

The Hospitality Association of Namibia (HAN) will hold its annual congress and tourism trade forum in Windhoek on 17 and 18 November. The event is a platform for the tourism industry to exchange views and be kept informed about latest tourism trends and developments. The congress will round off with a gala evening where annual tourism award winners will be announced. 

Brigitte Weidlich

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