Namibian Economics To The Point - April 2023

2 May 2023

The Namibian summer ended with sudden rainfalls in the last week of the month after a below average rainy season, drought is looming in some areas.

Namibia will soon have its first wind power plant, which is to deliver 50 megawatt electricity.

The country's mining sector has performed well in 2022, according to the latest figures.

A new era has begun for the 103 year old Namibia Breweries Limited (NBL) with the Dutch Heineken Group taking over the company this month. 

The Bank of Namibia has increased its repo rate by 0.25 percent to 7.25 percent in mid-April.

Inflation dropped slightly to 7.1 percent at the end of March (Feb.: 7.2 %).


Chinese company to build a 50-MW wind park

A Chinese government company has entered into a joint venture partnership with a local company to construct Namibia's first commercial wind power plant near Lüderitz in southerrn Namibia.

The 50 megawatt (MW) plant will be run as an independent power plant owned by the joint venture. The state-owned electricity company NamPower signed a power purchase and transmission connection agreement with Cerim Lüderitz Energy in April. 

Cerim is backed by Riminii Investments, a local company and China Energy International Group (Energy China), which is the lead partner in Cerim. 

They will construct the 50MW Lüderitz wind power plant on a build-own-operate (BOO) basis. It will be situated 16 km outside Lüderitz. The project will cost 1.4 billion N$ (about 70 million Euros).  

NamPower will be the exclusive buyer of the electricity for the next 25 years for a tariff of 87 Namibian cents per kilowatt-hour with a fixed annual escalation rate of 0.5 percent. Construction time will be 27 months and the first electricity supply is envisaged for July 2025. 


Germany to source lithium straight from Namibia

German chancellor Olaf Scholz said his country wants to support mineral-rich countries, build their processing infrastructure in order to cut dependency on China and buy it directly from countries like Namibia, Indonesia and Chile. 

“At the moment, we import raw materials from China, despite the fact that they are often not even extracted there but rather from countries like Indonesia, Chile or Namibia. These are countries that often do not profit nearly enough from the richness of their natural materials. We want to change this,” stated Scholz while opening the world's largest industrial trade fair, the Hannover Messe in April.

Scholz added if Germany succeeds in supporting value addition in countries where the raw materials are in the ground, then that would not only create greater local prosperity for them, but also ensure Germany has more than just one supplier in the future.

In November last year, Namibia singed an agreement with the European Union, which will ensure access for Brussels to Namibia’s rare earth metals to power the global transition to green energy.

A Chinese company owns a lithium mine near Uis in Namibia.


End of an era: Heineken takes over Namibia Breweries

After 103 years of ownership under the Ohlthaver & List Group, Namibia Breweries Limited (NBL) has been taken over by the Dutch company Heineken N.V. in mid April. The chairperson of the NBL board, Sven Thieme and all other board member resigned from the company's board on 14 April.

The buy-out of the NBL shares is said to cost Heineken around N$ 5 billion (about € 250 million). 

Since NBL is sold to Heineken N.V., the Heineken Company will appoint its own board.

Heineken now wholly owns NBL Investment Holdings, which owns 59.4 % of the shares in NBL on the Namibia Stock Exchange.


Mining sector recorded excellent growth

The mining sector of Namibia had 21.6 % growth in 2022 compared to 11 % in 2021, increasing its share of gross domestic product from 9.2 to 12.2 %.

The Chamber of Mines (CoM) chief executive Veston Malango made the announcement at the Chamber's annual general meeting end of April.

Corporate taxes paid by mining companies increased from N$1.55 billion (about € 750 million) in 2021 to N$ 1.9 billion (about € 100 million) last year. Chamber members collectively paid N$ 2.15 billion (about € 110 million) in royalties and N$249.4 million (about € 12,5 million) in export duties.

"The sector's improved performance was largely driven by the massive 44.2 % increase in diamond production last year. This increase was mainly due to the higher output of the company Debmarine Namibia's new diamond vessel Benguela Gem," said Malango.

Uranium production was impacted in 2022 by ongoing water supply disruptions in the Erongo Region, where all uranium mines are situated.

The number of people employed in mining increased by 6.9 % last year to 16,147 employees. The increase resulted from hiring on Debmarine Namibia's new diamond vessel and increased exploration which contributed to a higher number of contractors.

Direct employment consisted of 8,391 permanent employees, 742 part-time employees and 7,014 contractors.

The mining sector spent around N$16.8 billion on goods and services in Namibia last year, 74 % of that procured from Namibian registered companies.

Malango expressed confidence that mining will also see good growth this year on the back of crude discoveries and development of the green hydrogen sector.


More luxury cruise ships visit Namibia

The coastal towns of Walvis Bay and Swakopmund received a boost, with the arrival of more than 2,000 tourists on the Queen Mary 2 luxury cruise liner.

The Queen Mary 2 docked in April at the Walvis Bay harbour boosting the tourism businesses, which were hard hit during the COVID-19 pandemic.

The huge luxury cruise ship Queen Mary 2 visited the port of Walvis Bay in April, for one day. With over 2,000 passengers who explored the Namib Desert and Swakopmund.
Photo: Namibian Sun


The ship is but one of the six passenger vessels expected to dock at the Walvis Bay harbour this month.

About 20 000 tourists arrived with other large cruise ships last year from November last year until January this year. More ships are expected in the coming months.


Rent control law on the cards

A team of experts is currently putting the finishing touches to the draft rent control bill, which was provisionally shelved, after the government had made it public a few years ago. The Namibian Broadcasting Corporation (NBC) reported this month that the Ministry of Urban and Rural Development expects the final draft to be completed before the end of the 2023–2024 financial year. A rent control board was established in 2018, but has been dormant. Once passed by parliament and operational, the law will control exorbitant high rent and protect lessees from unfair treatment by property owners. 


Brigitte Weidlich   

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