Namibian Economics To The Point – October 2019

31 Oct 2019

Brigitte Weidlich

The first measurable rains in the new rainy season fell in the first half of October with several thundershowers in the northeast later in the month. President Hage Geingob attended the first Russia-Africa summit with other heads of state. No known concrete deals were finalised for Namibia. Russia wants to increase economic cooperation and trade with Africa, including military equipment.

Finance Minister Calle Schlettwein tabled a review of the national budget in the National Assembly. The Fitch rating agency announced its latest ratings for Namibia. Several investments in renewable energy, housing, asparagus production and the food sector were announced.

The Bank of Namibia retained its repo rate as expected at 6.50 percent. Inflation levels dropped to 3.3 percent in September (August: 3.7%) the statistics agency announced in mid-October.

Air Namibia resumes flights from Windhoek to Luanda from November three times weekly with an Airbus A319.

Citizens from 47 selected countries can now also apply for an electronic visa when entering Namibia at the Walvis Bay International Airport. This service was introduced in September at the Hosea Kutako International Airport already.

Major investments in Namibia

Namibian Vice-President Nangolo Mbumba inaugurated a multi-million Namibia Dollar asparagus-processing factory at Oshifo in northern Namibia. The Spanish investor company ‘Industrias Alimentarias de Navarra’ has started growing green asparagus two years ago near the Etunda irrigation project, which receives water from the Kunene River near Ruacana. “The asparagus agro-processing plant will act as a catalyst for sustained economic growth and shared prosperity,” Mbumba said. The new factory that will produce canned asparagus employs 300 permanent workers; eighty percent of them are women. An additional 200 seasonal workers are employed during

the asparagus harvesting time. The asparagus is mainly produced for export to Spain, Italy and France.

In Windhoek, the company Namib Mills has completed a new baking factory at its headquarters just outside Windhoek near Brakwater. Investments costs came to N$134 million (about 8.2 million Euros) and 120 new jobs were created. The new bakery bakes bigger bread loaves of 600 grams and 700 grams. It bakes 4,500 loaves per hour. According to Namib Mills, Namibians buy about 90 million loaves of bread annually. Namib Mills aims to get a slice of this market with 25 million loaves per annum.

More renewable energy projects planned

A mining company in the Erongo Region plans to erect its own 12-megawatt solar plant near the mining site. According to the company Swakop Uranium, a licence application for electricity generation through solar power was submitted to the Electricity Control Board. An environmental impact assessment (EIA) is underway.

Vice-President Nangolo Mbumba inaugurated a solar power plant this month near Trekkopje in the Erongo Region. It produces five MW and cost N$120 million (about 7.3 million Euros). The solar plant can be expanded to 27 MW capacity and is situated near the uranium mine of the Orano (formerly Areva) company. Sertum Energy Namibia constructed and owns the solar plant. Sertum collaborated with a young Namibian businessperson Elton Katangolo and Italian-listed company Enertronica SpA for this project. The Orano uranium mine is currently under care and maintenance.

In another development at the central coast, a private company acquired fifteen hectares of land from the Swakopmund municipality for a N$300 million (about 18.4 million Euros) housing project. The company Elize Investments bought the land adjacent to the Mondesa township to erect 226 houses for lower income groups. In addition, some 350 terraced houses or sectional titles will be constructed.

Finance Minister tables budget review

Finance Minister Calle Schlettwein told the National Assembly during his mid-term budget review that N$1.18 billion (about 72 million Euros) from the budgetary allocations in March were freed up to distribute among some

Ministries, which required more money. “The original budget of N$66.5 billion (about 400.5 million Euros) will not increase, the savings mainly come from projects not yet materialised,” Minister Schlettwein explained. The Electoral Commission of Namibia received over N$50 million (about 3 million Euros) in support of preparations for the planned parliamentary and presidential elections on 27 November. The national broadcaster NBC will receive a similar amount.

News from the financial sector

Local equity fund managers Eos Capital have launched a Namibia Infrastructure Development and Investment Fund (NIDIF). The company plans to raise N$500 million (about 30.6 million Euros) as capital for infrastructure projects in the country. Targeted sectors are energy, logistics, water, information and communication technology, transport and education.

In other interesting news, Standard Bank Namibia has announced its intention to list at the local stock exchange on 15 November. During October the public can buy shares, but in bundles of 250 shares for N$2,250 (about 138 Euros). The Bank plans to raise over N$720 million (about 44.2 million Euros) on the Namibia Stock Exchange (NSX) through listing. The Standard Bank Group currently holds 90% of Standard Bank Namibia Holdings, with the remaining 10 percent belonging to staff. After the public listing, the Group will retain 74.9 percent.

Namibia improves its competitiveness

Namibia is steadily climbing up the ranking ladder in the latest global competitiveness report. According to the World Economic Forum (WEF) Namibia improved from rank 100 among 141 countries by six notches to rank 94. The WEF released the report in mid-October. Namibia’s improved ranking is due to improvements in the country's financial system, business dynamism and information, communications and adoption of new technology.

New Fitch rating for Namibia

Two years after its previous rating, the international credit rating agency Fitch has downgraded Namibia's creditworthiness once more, from ‘BB+’ to ‘BB’, but with a stable outlook. According to Fitch, the downgrade reflected Namibia’s economy, which is under recessionary pressure, saying the macroeconomic environment has worsened. Despite a stable outlook with regard to the rating,

the risk of rising external shocks from the prevailing drought and a high unemployment rate subdued growth prospects. The agency also said recent policy initiatives aiming at spurring investment, including an investment summit held in August, would have only a muted impact on economic activity amid persistent structural bottlenecks.

Sorry, we can’t seem to find any matches for your search. Have a look at our popular searches below.