Namibian Economics to the point - December 2018 - News - Gondwana Collection


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Namibian Economics to the point - December 2018

Avatar of inke inke - 29. décembre 2018 - Economics

Brigitte Weidlich

President Hage Geingob has inaugurated the Peugeot motor vehicle assembly plant in Namibia’s harbour town of Walvis Bay. Finance Minister Calle Schlettwein received an international award in Washington in early December. The international rating agency Moody’s affirmed Namibia’s credit rating at below investment status. The local fishing company ‘Tunacor’ has inaugurated its brand new fishing vessel of N$200 million (about 12.1 million Euros). According to the Ministry of Environment and Tourism, some 1.5 million tourists visited Namibia in 2017. A local bank has introduced the country’s first green bond.

After an international news report that Namibia was considering delinking from the South African Rand, Namibia’s central bank announced on 24 December, this would not happen. The Bank of Namibia also retained its repo rate once again at 6.75 percent. Inflation in November 2018 increased to 5.6 percent, the national statistics agency reported. The third quarter of 2018 saw a negative economic growth of -0.8 percent.

The Tunacor fishing company commissioned its new N$200 million vessel. Photo: Ministry of Fisheries

Peugeot motor assembly plant inaugurated

The Walvis Bay assembly plant of French vehicle manufacturer Peugeot was inaugurated by President Hage Geingob on 5 December 2018. The new plant emphasizes the government's plans for Namibia's industrialisation, the President said. It is a joint venture between Peugeot and the Namibia Development Corporation (NDC). The NDC built the plant for N$190 million (about EUR 11.5 million) with the aim that a manufacturer would lease the building. Peugeot came on board in early 2018 but the first cars were only assembled shortly after the inauguration. 

Peugeot Namibia’s Vice-President Emre Karaer said that the target is to produce 5000 vehicles for the southern African market by 2020. Currently the Peugeot 3008s und 5008s and the Opel Grandland X are assembled in Walvis Bay.

President Hage Geingob inaugurated the new Peugeot vehicle assembly plant in Walvis Bay. Photo: Office of the President, Namibia

Namibia to get its own barcode

The Namibia Trade Forum (NTF), a state entity, is exploring ways to introduce a barcode for Namibian products. Barcodes are currently designed and handled by the South African Barcode Centre. “It has become necessary to have our own barcode centre to administer barcodes as originating from Namibia”, Ndiitah Nghipondoka-Robiati, Chief Executive Officer of the NTF, explained during a meeting with the private sector. 

Finance sector to be modernised

Finance Minister Calle Schlettwein introduced the newly appointed board of directors for the envisaged Namibia Revenue Authority (Namra). The new authority takes over the functions of the Department of Inland Revenue in the Ministry and will be operational from February 2019. It will also be responsible for tax administration, customs and excise. The board is chaired by Anna Nakale-Kawana, formerly head of the Namibia National Reinsurance Corporation (NamibRe). She and the six directors will lay the foundation for a smoothly running Namra.

The Chief Executive of Namra will be announced in early 2018. A new Integrated Tax Administration System (ITAS) will be installed between 31 December 2018 and 16 January 2019. All computer systems at the revenue department will be down during that time. ITAS will be operational from 17 January, the Finance Ministry announced. 

Finance Minister honoured in Washington

Namibia’s Finance Minister Calle Schlettwein was presented with the Transparency Excellence Award by the international advisory board of the African Leadership Magazine when he attended the African Anti-Corruption Forum in Washington, USA, in early December. In his acceptance speech Schlettwein said that anti-corruption institutions should be able to investigate and expose allegations of corrupt practices without fear or favour and without interference. 

Namibia’s Finance Minister Calle Schlettwein received an award by the African Leadership Magazine. Photo: African Leadership Magazine

Namibia mulls over delinking from the ZAR 

Renowned financial news agency Bloomberg reported on 21 December that Namibia might consider delinking from the South African currency. “The government in Windhoek is weighing options to amend the currency arrangement or forge a new path for the Namibia dollar”, Bloomberg reported after an interview with Namibian Finance Minister Calle Schlettwein in New York. However, deliberations to this effect were “not imminent”, i.e. this would not happen soon. As Namibia’s economy recovers from a recession the “integration with South Africa, including customs agreements” had to be reassessed. “The whole basket has to be re-evaluated”, Schlettwein told Bloomberg. The report has stirred a debate in Namibia. The country’s central bank, the Bank of Namibia, issued a press statement on 24 December explaining “that Namibia is presently not weighing such an option, as the current arrangement continues to be beneficial to Namibia as a small, open economy. The Bank of Namibia and the Ministry of Finance both believe that no other arrangement will deliver better at present than the current one”, the Bank of Namibia stated. 

Finance Minister Schlettwein tweeted: "We are continuously weighing the benefits and costs of the CMA [Common Monetary Area] Agreement, including the 1:1 ZAR currency peg. Delinking is not imminent." 

Moody’s affirms Namibia’s rating

On 7 December the international rating agency Moody’s affirmed Namibia’s investment status at “Ba1”, which is junk status with a negative outlook. Moody's was concerned that the government may not be able to address Namibia’s vulnerability to shocks like subdued growth in South Africa, lower than expected revenue for the Southern African Customs Union (SACU), rising commodity prices and possible [further] depreciation of the South African rand. 

More tourists visit Namibia

Some 1.5 million tourists visited Namibia in 2017. According to statistics released by the Ministry of Environment and Tourism in December, this represents a 2.1 percent increase from 2016. Visitors from Angola, South Africa, Zambia, Zimbabwe and Germany account for over fifty percent of the tourist figures. 

About 311.636 tourists arrived from Europe, 5.7 percent more than in 2016. Some 123.022 German nationals visited Namibia in 2017, a slight increase of 0.7 percent from 2016. The highest figures were recorded in July 2017, when 154.368 tourists came to Namibia.

Also in tourism: a new lodge on the banks of the Kunene River in north-western Namibia was opened in December. Mavinga Lodge is located in the vicinity of Ruacana and belongs to Fabianus Paulus, a local business man.

Small aeroplanes can still land at lodges

The Ministry of Works and Transport has extended the deadline for the registration of small airfields – particularly at tourism lodges in remote areas –to 1 January 2020. This follows the Ministry’s recent announcement in the Government Gazette that as from 1 January 2019 no small aircraft would be allowed to land at such airfields. After meetings with representatives of the tourism industry, the Ministry extended the deadline by one year. Tourists can thus still visit lodges by air during 2019, while tour companies can start the process of registering their airfields.

First green bond on the market

A local commercial bank will list a green bond on the Namibian Stock Market (NSX) as part of its N$ 5 billion domestic note programme. Bank Windhoek announced  that eligible projects like renewable energy, green building, sustainable water, land and waste management and climate adaptation will be financed through the green bond,.

More good news is an agreement signed by the Development Bank of Namibia (DBN) and Germany’s KfW Development Bank for a concessional loan amounting to N$ 240 million (about EUR 15 million). The DBN is authorized to grant loans for the development of climate-related infrastructure, such as renewable energy, water and low-carbon transport projects. Climate finance is currently a small but fast-growing niche market in Namibia. “The DBN, with the support of the German development cooperation, will fill this much needed financing gap in the local market”, the German Embassy announced. 

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