Namibian Economics To The Point - September 2020

30 Sep 2020

Brigitte Weidlich

On 30 September 1 Euro = 19.85 N$.

Warmer spring weather prevailed during September with a few cool days in southern Namibia at month-end. President Hage Geingob lifted the six month-long state of emergency due to the Covid-19 pandemic on 18 September. The curfew was also lifted. Health protocols are however still in place, including wearing a mask and social distancing.

Leisure travel to Namibia is again possible as of 1 September, albeit only by air and only via the Hosea Kutako International Airport and the airport in Walvis Bay. Tourists can travel to any destination within Namibia after arrival but must undergo a Covid-19 test on the fifth day of their travels. The first foreign tourists have already arrived.

German airline Eurowings, a subsidiary of Lufthansa, has resumed regular flights three times per week from Frankfurt to Windhoek since 18 September.

Namibia’s inflation stood at 2.4 percent in August (July: 2.1%) according to the national statistics agency. The local investment company Cirrus Capital published its growth forecast for Namibia and predicts a 3.0 percent growth in 2021 and 4.0 percent in 2022.

EIF receives Karlsruhe finance award

The Environmental Investment Fund (EIF) of Namibia received recognition for its sustainable project financing. The certificate of merit by the City of Karlsruhe in Germany for the EIF was announced by European Organisation for Sustainable Development (EASD). The Karlsruhe awards honour financial institutions or related organisations and leaders with significant contributions with regards to sustainable banking and finance. Namibia’s EIF runs under the auspices of the Ministry of Environment, Forestry and Tourism. The EASD recognised the EIF’s success in long-term financing projects for climate-change resilient livelihoods that benefit local communities. The EIF has to date received some N$1.2 billion (about 600 million Euros) for projects, which it also manages. Some 238,000 people have benefited and continue to benefit from these projects.

Informal residents in Windhoek legalised

The Windhoek municipality has started plans to issue occupancy certificates to residents of informal settlements. Some 1,100 residents of the Mix area at the northern outskirts of Windhoek received these certificates this month. A few weeks earlier, 440 certificates were issued to informal residents in three other settlements. The certificates legalise the pieces of

land they occupy and they are allowed to construct houses on them. In total, 20,000 certificates will be issued in the Windhoek area until year-end.

The Minister of Urban and Rural Development, Erastus Uutoni, who handed over the certificates, said, the ministry, together with the National Housing Enterprise, the Windhoek municipality and the Khomas Regional Council, has started an affordable housing project in Windhoek. It will be expanded to other towns in the country in due course. “This project is aimed at transforming and upgrading informal settlements in Namibia by providing housing to the ultra-low-income members of our communities,” Uutoni said.

Pension fund appoints British companies

The Government Institutions Pension Fund (GIPF) has appointed two British companies as consultants with regard to investing public servants' pension contributions. The previous company, RisCura of Namibia thus ends its eleven years as consultant. The GIPF has assets worth N$118,1 billion (about 5,9 billion Euros).

The GIPF announced that Lane Clark & Peacock (LLP) was appointed to consult on investments. The second company, BFinance UK Ltd will advise on the selection of asset managers. The two UK-based companies received a three-year contract starting on 1 October 2020. The GIPF has about 101,900 active members – government officials - from 102 254 members, representing a decline of 0,3%, which annually contribute about N$4,3 billion. It has some 40,600 active beneficiaries.

Locusts destroy grazing land in Zambezi Region

Since the first swarms of locusts were reported in the Zambezi Region in mid-August, they have destroyed some 500 hectares of grazing land as spraying is underway to curb the spread. The Minister of Agriculture, Water and Land Reform, Calle Schlettwein said the locusts, which had invaded the region from neighbouring countries, had spread to about 4,000 square kilometers. About N$30 million (about 1.49 million Euros) would be required to hinder the locusts from creating further damage. Local farmers are also worried about their crops. Already in February this year the first locust invasion was reported in the Zambezi Region, which was brought under control.

In the meantime, there are also some good news from the region. After several years of closure, the commercial abattoir at Katima Mulilo has opened its doors this month, providing a much-needed market for cattle farmers. Under a new ownership with local participation and support from the Meat Board, the renovated abattoir is again operational. The newly formed Zambezi Meat Corporation (Zamco) has employed thirty people and can slaughter up to 1,320 cattle per month.

Namibian cement factory still for sale

The Germany-based Schwenk Group still wants to sell its cement factory in Namibia, after the country’s competition commission rejected the offer of a Chinese company in August. Schwenk holds a seventy percent majority in Ohorongo Cement near Otavi, which started operations in December 2010. Other shareholders of the cement plant are South Africa’s Industrial Development Corporation (IDC), Development Bank of Namibia (DBN) and the Development Bank of Southern Africa (DBSA).

Schwenk announced this month it wanted to concentrate on the “core business of cement, concrete and aggregates in Europe” and therefore the company decided to sell Ohorongo. Interested buyers should be financially capable to make the acquisition and further develop the business; have a deep understanding and expertise in the cement business; and have a keen interest to further develop growth in Namibia, Schwenk said in a statement. “It is important to note that the search for a potential buyer included Namibian institutions, asset managers and other interested parties, however, none could be identified that could fulfill the above three requirements. Regardless of when a suitable buyer will be found and as in the past, it will remain the objective to continue to optimise the operations in Namibia in order to remain competitive and reliable in the Namibian market,” the Schwenk Group said.