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Namibian Economics to the Point – September 2017

Avatar of inke inke - 02. October 2017 - Economics


The latest statistics released in September show that Namibia’s economy had negative growth in the first and second quarter this year and thus moved into a technical recession. Growth dropped to minus 1.7 percent each during both quarters.   


Namibia’s ranking in the latest Global Competitiveness Index dropped from sixth place to seventh place among the ten most competitive African economies. According to the World Economic Forum (WEF), Namibia’s macro-economic ranking dropped sharply from 74th position among 138 countries in 2016, to rank 107 out of 137 countries reviewed. In the overall rating, Namibia has fallen by six places on the global competitiveness rankings for 2017-2018  down to 90th from 84th in 2016-2017. Namibia's score was also down to 3.99 from 4.02 last year. Namibia ranks highly for its institutions (44th), infrastructure (67th), financial market development (50th), and labour market efficiency (33rd). Namibia is rated poorly for the quality of its higher education (111th), health and primary education (110th), business sophistication (87th), technological readiness (89th) and macroeconomic environment (107th) out 137 countries.

Namibia’s inflation remained at 5.4 percent in August, according to the National Statistics Agency. Petrol and diesel prices went up by 30 cents per litre each, in early September. 

Government put the State-owned Road Contractor Company (RCC) under liquidation. Public Enterprise Minister Leon Jooste, announced he would first have to seek approval from Parliament for this step. Basic salaries of the 393 employees will be paid. Since its establishment in 2000, the RCC had only made losses, said Jooste. 

Italian company Salini, has temporarily suspended its construction works at the Neckartal Dam near Keetmanshoop. The dam is to be completed by March 2018, at a cost of around N$3 billion (about 214 million Euros). According to Salini, the government has not paid its tranches since May; arrears total N$600 million (about 42 million Euros). “No pay, no work”, the company said and sent its workers home for the time being. Agricultural Minister John Mutorwa, told the government-owned newspaper New Era that Government had “cash flow constraints”. Cabinet plans to approach the State-owned water utility NamWater to take out a loan for the N$600 million to pay Salini. 

The tough economic climate prevailing in Namibia is also reflected in new vehicle sales. About 18.7 percent fewer vehicles were sold in August than in July 2017. Despite all this, Finance Minister Calle Schlettwein, told reporters during a news conference on 27 September he was optimistic that Namibia’s economy will grow between 1.8 and 2.3 percent this year. 

Infrastructure fund planned 

Schlettwein announced that an infrastructure fund will be set up by the end of October, through the State-owned Development Bank of Namibia (DBN). Since financial institutions operating in Namibia must increase their domestic asset requirements – or savings – from the current 35 percent to 40 percent by January 2018 and to 45 percent by October 2018, the infrastructure fund would provide a good investment, Schlettwein said.

The DBN announced that this month it will again provide loans for small and medium enterprises (SMEs). Loans will start from N$150,000. The DBN had stopped providing loans to SMEs after the SME-Bank was established a few years ago. The SME-Bank was however put under liquidation a few months ago. 

And staying on infrastructure: Germany will undertake a feasibility study for a desalination plant in Namibia. Germany’s Ambassador to Namibia, Christian Schlaga, told reporters that this includes investigating means to pump the desalinated water from the coast to central areas, including Windhoek.

Agriculture and mining 

Namibia continues reducing its fruit and vegetable imports. At the annual horticulture day at Okahandja, Agricultural Minister John Mutorwa, said that that 44 percent of all fruit and vegetables are produced in Namibia. 

Namibia’s famous Swakara lamb furs were all sold at the international fur auction at Copenhagen. The 39,000 furs were sold for a total of N$19.3 million (about 1.3 million Euro).

Namibia’s trade deficit widened in the second quarter of 2017. Some N$13.9 billion of goods were exported, N$1.7 billion less than in the first quarter. The trade deficit stood at N$6.1 billion in Q2 compared to N$4.8 billion in Q1 according to the Namibia Statistics Agency (NSA). Exports declined due to weaker demand for copper cathodes by Switzerland, fewer diamond exports to Botswana and lower demand for Namibian fish in Spain. 

The mining company Namdeb announced that land operations are getting more depleted. Diamond mining operations at Elizabeth Bay and at Daberas might have to be abandoned in due course (see also our diamond story

The Ministry of Mines and Energy launched its five-year strategic plan. Importantly the Ministry aims to increase Namibian equity in mining companies to increase from current the five percent to 20 percent by 2022. Namibian equity in energy companies is to increase from the current 16 percent to 20 percent within five years.

Largest radio telescope

Namibia’s government is one of nine African countries joining a project to build the largest radio telescope. The Square Kilometre Array (SKA) is an international effort to build the world’s largest radio telescope, which will eventually total one square kilometer of data collecting area. Thousands of dishes will be put up with up to one million antennas. Namibia will host four remote stations at Maltahöhe, Karibib, Okahandja and Opuwo. Benefits will, among others, include participation in research for local scientists and science students.

Tourism upbeat

More tourists are visiting Namibia this year, much to the delight of tourism companies like the Gondwana Collection. “We are confident that this year will also be good, after we had excellent growth in 2016,” says Manni Goldbeck, Gondwana’s Brand and Marketing Director. The company is opening its new lodge along the Zambezi River on 1 November. Construction for a new lodge near the company’s Namib Desert Lodge has started.

Gondwana celebrated another milestone: the Gondwana Card, enabling discount to card holders, was introduced ten years ago. To date 65,000 cardholders are registered, 40,000 are in Namibia. Soon an online booking system will be launched, also for card holders.

More investments


The Walvis Bay Salt refinery invested in nine double tipper trucks worth N$30 million to transport salt from its 6,000 hectare salt fields, south of the lagoon to the harbour. This translates into 1,000 fewer trips per month, meaning less traffic and less noise with the 34 ton trucks. The company produces 950,000 tons of salt per annum.

At Lüderitz, Marco Fishing has invested with its joint venture partner Mekarilakha Fishing into a new trawler, which will be delivered in November. The company invested N$10 million to enlarge its hake factory by 1,000 square metres.

Other developments


It is official! Parliament adopted a new bill scrapping wintertime and only allowing summertime throughout the year. 

The Swakopmund municipality mulls banning plastic bags in shops by December 2017. Only bags made from recycled plastic will be allowed.

Brigitte Weidlich

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