Namibian Economics to the Point – August 2017 - News - Gondwana Collection


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Namibian Economics to the Point – August 2017

Avatar of inke inke - 04. septembre 2017 - Economics

The international rating agency Moody’s downgraded Namibia’s foreign debt rating to below investment grade or “junk status”. Petrol and diesel prices remained unchanged. The central bank lowered its repo rate by 25 basis points to 6.75 percent. The Labour Ministry commissioned a study to look at ways to introduce a national minimum wage.

Caught off guard

While Fitch, another rating agency, kept Namibia’s rating at ‘BBB-‘ in June, Moody’s sudden downgrade from ‘Baa3’ to ‘Ba1’ on 11 August took government by surprise. “Our government has taken note of this decision with concern, we do not concur with this assessment,” Finance Minister Calle Schlettwein reacted, “Namibia’s economic activity and outlook for this year is better than a year ago.” However, unpaid bills of government for close to N$4 billion (about 258 million Euro) to the private sector, limited capacity to handle (financial) shocks and risk of renewed liquidity pressures, caused Moody’s downgrade. 

Total debt in Namibia stood at N$158.2 billion (about 10 billion Euro) at the end of June 2017 according to the Bank of Namibia. This reflected a year-on-year growth of 8.5 percent. Nearly half of that total was government debt with N$70.4 billion (about 450 million euro), private households had N$51.4 billion (340 million euro) debt, most of which linked to mortgages to pay off houses. The corporate world was indebted with N$36.2 billion (about 235 million Euro).

On a positive note, inflation dropped from 6.1 percent in June to 5.4 percent in July. 

Many investments

The State-owned fishing company Fishcor invested in a multi-million Namibian Dollar horse-mackerel factory at Walvis Bay. Construction has kicked off.

Fisheries Minister Bernard Esau opened a brand new N$17 million seal processing factory at Lüderitz. Products will be blubber and seal oil, gonads and animal feed, plus seal furs. The factory was set up by BEE company Uukumwe Youth Empowerment Consortium. 

The German company Polycare Research Technology of Thuringia signed agreement in Windhoek to set up a Namibian subsidiary. Local companies KL Construction and Namib-Beton as well as the black economic empowerment (BEE) company Guinas Investments are the partners. The block brick factory hall was recently completed at the Brakwater industrial area outside Windhoek. Production will start in January 2018.

A five megawatt solar power plant has been completed at the small mining town of Rosh Pinah along the Orange River for N$124 million. The Canadian-based B2Gold company, which is mining gold near Otavi invested in a seven megawatt solar plant on its mining premises. Construction has already begun.

The two northern government abattoirs in Oshakati and Katima Mulilo will reopen at end of October, with 2 BEE companies leasing them. The largest meat producing company, Meatco, did not renew the leasing contract some two years ago, due to heavy losses these abattoirs brought. Meatco bought a mobile slaughtering unit for the northern areas instead. 

Namibia will have a national productivity centre within 18 months, with support from experts from Singapore. The Labour Ministry signed an agreement to this effect with the Singapore Cooperation Enterprise.

German support

Germany’s government will support construction of new vocational and technical training premises at the Osona military school of the Namibia Defence Force (NDF) near Okahandja. This is an investment N$60 million (about 3.8 million Euro).

Namibia’s Statistic Agency (NSA) launched its geo portal this month. This enables access to detailed spatial data for all fourteen regions in the country and each town/village. This is a really cool tool and good for planning.

Local cement factory Ohorongo Cement opened a cement depot at Ondangwa. Ohorongo, which belongs to Germany’s Schwenk Group, leases land from the public enterprise TransNamib right next to the railway at the Ondangwa train station. Construction of the depot cost N$4 million. According to Ohorongo’s Managing Director, Namibian born Hans-Wilhelm Schütte, 44 percent of Ohorongo’s total production is sold in northern Namibia. The Ohorongo factory can produce 750,000 tons of cement per annum.

The 18th annual Ongwediva trade-fair kicked off at end of this month with 456 exhibitors. It ends on 2 September and is the biggest trade-fair in Namibia.

China and Namibia signed a new agreement for the construction of the dual carriage way between Windhoek and the Hosea Kutako International Airport. China’s Deputy Prime Minister Zhang Gaoli visited Namibia for three days. 

The Ministry of Environment and Tourism has, through its Environmental Investment Fund (EIF), received altogether N$300 million (about 19.3 million Euro) from the Green Climate Fund (GCF) for two projects. One project will support 21,000 subsistence farmers in the regions Kavango East, Kavango West and Zambezi to adapt to climate change and to apply smart agriculture like soil ripping instead of ploughing. The second project will support communal conservancies in these regions with regards to climate change.

Local versus foreign

Local architects and quantity surveyors expressed their dissatisfaction that 29 Zimbabwean architects, who are in Namibia on a government contract, are exempted from assessment and a qualifying examination. This examination is compulsory for all architects and quantity surveyors working in the country according to the Namibia Council of Architects & Quantity Surveyors. The Ministry of Works and Transport exempted the Zimbabweans. Local professionals feel overlooked and say they can also do the work. A meeting with representatives of the Ministry did not bring desired results. In a press release issued after the meeting, the Ministry called on the local professionals not to be xenophobic.

Tourism developments

The tourism company Gondwana Collection’s accommodation establishments were favourably rated by the renowned online tourism platform Holiday Check. Gondwana came out on top.

To the relief of coastal tourism companies, Fisheries Minister Esau revoked the recent increase of recreational marine fishing permits of N$1,500 (about 97 Euro) monthly back to the N$14 (one Euro) per month. Recreational angling is an important part of tourism. 

The national carrier Air Namibia announced it will resume its Windhoek-Accra route from 28 March 2018. From Accra in Ghana it will also fly to Lagos, Nigeria. Frequency will be four times per week. In the same vein the Minister of Public Enterprises Leon Jooste said at a public lecture his Ministry found out Lufthansa plans to introduce its Windhoek-Frankfurt route as from 2018.

The Hospitality Association of Namibia (HAN) held its first ever tourism seminar at Ondangwa this month. The aim is to explore more sightseeing routes for tourists in north-central Namibia.

Environment and Tourism Minister Pohamba Shifeta, announced the head of the newly created anti-poaching unit in the Ministry: Ndahangwapo Kashihakumwa, a very experienced Police officer who went into early retirement two years ago, heads this unit. This year, twenty-six rhinos and eighteen elephants were poached thus far. Minister Pohamba also reacted to recent increasing robberies of tourists. “We will develop a tourism protection strategy with the input of all stakeholders,” Shifeta said.

The Environment and Tourism Ministry launched a cultural heritage event and exhibition at the Hosea Kutako International Airport in the run-up to World Tourism Day on 27 September. The event on 24 August was meant to “welcome tourists to Namibia … to ease frustrations of arriving visitors due to the long queues at the airport,” Tourism Director Sem Shikongo said.

Brigitte Weidlich

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