Namibian Economics To The Point – February 2021

28 Feb 2021

Brigitte Weidlich

In February it rained relatively well in Namibia and the sluices of some dams had to be reopened in between, some areas are still waiting for rain.

The cabinet has decided to liquidate the state airline Air Namibia, which caused criticism among labour unions and in parliament.

The Ministry of Environment and Tourism has launched a revised wildlife management strategy. Among other things, it provides for compensation for damage caused to crop fields by communal farmers caused by elephants and hippos. Damages to human life and to huts and fences are also paid for.

The renovations and extensions at Hosea Kutako International Airport are almost complete.

A study carried out with German support for the construction of a second desalination plant on the coast is almost done. Some of the water is to supply Windhoek and the central areas by pipeline. The plant is expected to cost around N$ 8.7 billion (some 480 million Euros).

Labour Minister Utoni Nujoma has appointed a five-member commission to investigate the introduction of a national, nationwide minimum wage. A report with recommendations is expected by 30 September.

Although the government has not yet officially announced whether the controversial dam in the Baynes Mountains on the Kunene River will be built in the near future, the road authorities put the construction of a bitumen road to the intended location out on tender this month.

The US actor Will Smith spent ten days in Namibia to shoot a documentary with National Geographic entitled “One strange rock”.

Namibia's central bank has left the key rate unchanged at 3.75 percent. The inflation rate stood at 2.7 percent at the end of January (end of December: 2.4%), said the statistics agency.

Covid-19 regulations remain in effect

On 24 February, the government extended the night curfew to 31 March, despite a drop in Covid-19 infections. It is now one hour shorter (10pm - 4am) and hotels are allowed to serve alcohol with meals to room guests on weekends and public holidays. The first Covid-19 vaccines are expected in March.

Botswana and South Africa have reopened their borders since February; motorists can pass again, but have to comply with Covid-19 requirements.

International Hosea Kutako Airport renovated

The Namibia Airports Company (NAC) has almost completed the expansion of the Hosea Kutako international airport. NAC managing director Bisey Uirab said the airport would become an air traffic hub for Namibia and the region. The aim is to attract more international airlines and international travellers to Namibia. The current renovation and expansion concerns the check-in hall, the passport control area and the departure hall. A new arrival hall with 18 of the current eight arrival counters awaits travelers. The luggage area will also be enlarged. The cost is around N$250 million (about 13.6 million Euros). All work should be completed by the end of June. The apron will be expanded to create more space for aircraft safety and space for more planes.

Air Namibia airline is liquidated

The cabinet has decided to dissolve the national airline Air Namibia. The approximately 650 employees will continue to receive their salaries for 12 months. Finance minister Ipumbu Shiimi and the minister of public enterprises, Leon Jooste, confirmed this at a press conference on 11 February, after newspapers reported on the possible settlement in the morning.

Air Namibia has around N$3 billion (some 164.3 million Euros) in liabilities. "The government has supported Air Namibia with a total of N$11 billion (around 602 million Euros) in recent years, which is no longer sustainable," said Finance Minister Shiimi. On 25 February, the Namibia Airports Company filed an application in the Windhoek Higher Court to liquidate the airline that was founded more than 70 years ago as "South West African Airways".

Wecke & Voigts closes after 129 years

One of the first and most established companies in Namibia, Wecke & Voigts, closes its shop in Windhoek Independence Avenue in the middle of the year. The company was founded 129 years ago and registered on September 3, 1892 with the then governor of German South West Africa, Curt von François. The senior partner in South Africa, Fritz Wecke, had agreed with the brothers Gustav and Albert Voigts to first set up a trading office in Okahandja. A little later, the main business was established in Windhoek on Kaiser-Wilhelm-Straße, the current location. According to W & V, business has stagnated for 4 years and in 2020, the overseas tourists stayed away due to the coronavirus pandemic. This led to the decision of the W&V board last November to close in mid-2021. The Wecke & Voigts wholesale will continue.

Investment authority is being restructured

The former Namibia Investment Center (NIC) in the Ministry of Industrialisation and Trade has been restructured and is now called the Namibia Investment Promotion & Development Board (NIPDB). Its new chief executive, Nangula Uaandja announced this month that the NIPDB now falls directly under to the presidential office since January 1st. Uaandja is an auditor and has headed PriceWaterhouseCoopers in Namibia for many years. The NIPDB wants to attract local and international investors in a targeted manner to boost Namibia's economy, which has been stagnating since four years.

Investments are being made in spite of the difficult economic situation as shown by the project on the coast to build a new, large cooling and freezing plant outside Walvis Bay. A plant with a capacity of 12,500 tons on an area of 54,000 square meters is to be built from March for around N$ 400 million (some 21.8 million Euros). The Namibia Industrial Development Agency, Nida gave the order. Not only the fish intended for export but also dates and meat will be stored there for export.

Second submarine cable for Namibia

Namibia will be connected to a second submarine fiber optic cable. The Namibian company Paratus has signed an agreement with Telecom Namibia and Demshi Investments. The Equiano cable is a Google project and will be 14,000km long, from Portugal to South Africa. The total cost is N$ 6 billion (about 328.6 million Euros). The costs for Namibia will be N$ 260 million (around 14.2 million Euros), including the landing station near Swakopmund. The cable should reach Swakopmund by September. The data speed will be 12 terabytes per second and the cable will have 20 times more data capacity than the WACS submarine cable.

Arandis buys into a charcoal factory

The Arandis municipality has bought a ten percent stake in the charcoal processing plant. The plant belongs to the new Namibian company Unoo Investments CC and employs 53 people. The company is located in Arandis, 60km east of Swakopmund. According to the Arandis chief executive Stanley Norris, the law allows municipalities to enter into joint ventures. Norris stressed that the municipality is geared towards industrialization. Five new sectors are emerging in the town: a shoe factory, a gypsum factory and a clothing plant.

According to Augustos Unoovene from Unoo Investments, the company purchases charcoal in bulk from Namibian producers. This is processed into a substance from which briquettes are made. The briquettes are then packaged and exported to Europe as barbeque charcoal via Walvis Bay. After completion, the plant will be in full production from May. It wants to produce up to 1,200 tons monthly and wants to employ up to 100 people.

Protest against oil exploration in Kavango East

The Canadian junior oil exploration company Reconnaissance Africa held a public hearing about its oil exploration in Kavango East in Windhoek after pressure from environmental organisations. Some questions about the test drillings up to a depth of 4,500m, which began in December 2020, remained unanswered. The group Fridays for Future Windhoek (FFFW) demonstrated again this month against Recon Africa. Some 40 demonstrators demanded that the Kavango regions in Namibia and in Botswana be protected from oil production. The World Wildlife Fund (WWF) also asked Recon Africa in a full-page newspaper advertisement to commission a comprehensive, strategic study rather than individual small environmental studies.