Namibian Economics To The Point – June 2023

30 Jun 2023

The winter weather in June was rather mild but during the last week of the month a cold front caused temperatures to drop below zero, rainfalls in the southern parts of the country and even snow in the western parts of the Khomas Hochland. 

The prime ministerss of tThe Netherlands and of Denmark together travelled together to Namibia for a one-day working visit to discuss green energy solutions. 

At State House an agreement was signed between Namibia and the Netherlands to exempt diplomatic and offiicial passport holders of both country from visa requirements.  

The Bank of Namibia increased its repo rate by 0.5 percent to 7.75 percent in mid-June, saying this was necessary to curb inflation, which stood at 6.30 percent on 31 May (April: 6.1%).  

Namibia’s meat industry will undergo changes with the Meat Board given the mandate over the poultry sector including as well in relation to the protection of local production. This includes egg production. 

The National Assembly adopted several amendments to laws in compliance with the UN Financial Action Task Force (FATF) to curb money laundering and organized crime aAmong others. In addition, a law for the regulation of crypto currencies was adopted, this fledgling sector has previously been up to now not been unregulated. 

Namibia received a new rating from the international rating agency Fitch.  

A local company has completed the construction of a news 287km long power line. 

The Equiano subsea cable of the internet giant Google has finally gone live providing more broadband capacity and speed in Namibia .  

The Namibian Stock Exchanfge (NSX) has become a full member of the World Federation of Exchanges (WFE). 

Dutch and Danish prime ministers visit Namibia 

Denmark and the Netherlands want to cooperate with Namibia in the field of green energy, particular green hydrogen. For the first time, two Prime Ministers paid a working visit to Namibia at the same time. Dutch Prime Minister Mark Rutte and Danish Prime Minister Mette Frederiksen jetted into Windhoek for a blitz visit in mid-June before flying on to South Africa on a similar mission.   

The Dutch port of Rotterdam, which from 2025 will be the main port in Europe for imports of green hydrogen products such as ammonia, including from Namibia, has already signed a cooperation agreement with Namibia’s port authority, NamPort in November 2021. 

For her part, Frederiksen said that the African Union (AU) and the EU should cooperate more as they face similar challenges. “In Europe and Africa, many young people are unemployed, including many who have completed vocational training. They need jobs and the energy transition can provide that,” she said.  


Dutch Prime Minister Mark Rutte, Presidentn Hage Geingob and Danish Prime Minister Mette Frederikson.
Photo: State House, Namibia 


Germany already signed an offtake agreement with Namibia to import green ammonia. Germany and Denmark recently agreed to construct a cross-border pipeline for green ammonia.  

In Windhoek Namibia and the Netherlands diplomatic and official passport holders arethat exempteds holders of diplomatic and official passports from both countries from visa requirements. A second agreement was signed by the University of Namibia with the Dutch Radbound University to set up a telescope in Namibia for space exploration regarding the ‘black holes’. 

Frederiksen and Rutte withand their business delegations also attended a business forum with Namibian companies. 

Equiano subsea cable now in action 

The Namibian company Paratus, the landing partner for the Equiano subsea cable in Swakopmund, announced the activation of the cable mid-June. It was landed towards the end of last year. Equiano, with its landing points in Lisbon, Benin, Nigeria, St. Helena, Namibia, and South Africa, will increase broadband and internet speed significantly and create new economic opportunities in Southern Africa. With twelve fibrer pairs and capacity of 144 Tbps, the Equiano cable of internet giant Google provides approximately 20 times more capacity than existing cables connecting Europe to South Africa.  
The subsea cable is projected to increase internet penetration in Namibia by 7.5% by 2025. This development is expected to stimulate substantial economic growth, job creation, and sustainability, positively impacting the lives of the population in the western African countries where Equiano has a landing station, which represents approximately 31% of Africa's total population. Furthermore, neighbouring countries, including landlocked nations, will also benefit from Equiano's presence through various cross-border terrestrial fibrer networks, amplifying the transformative power of the cable across the entire region.  

Local company completes major project 

A Namibian company has completed a major contract for the state-owned electricity utility NamPower by constructing a new 400 kilovolt power line of 287 kilometres with 566 towers, running from the Auas substation east of Windhoek to the Gerus substation outside Otjiwarongo. 

Power Line Africa is a Namibian company active in the electricity supply industry, specialising in rural electrification, distribution networks, and overhead transmission line contracting. The N$630 million contract was delivered on time, within 24 months and within the budget. About 150 persons were employed. 
Some 8,000 cubic metres of soil were excavated in total before 1 230 loads of concrete were delivered to lay the foundations for the 566 steel towers for which 3,500 tonnes of steel were used. 
According to Francois Schoonmbee, Power Line Africa's CEO, the company was very proud of this achievement. 

Interesting developments in the meat sector 

The National Assembly has passed a law to increase the mandate of the existing Meat Board, which will now also handle the poultry – including egg production - and the dairy sector. The Meat Board will protect local production by among others controlling imports of cheaper products. In the meantime, the meat producing company Meatco is in dire straits due to debt of some N$188 million and fewer cattle throughput. Meatco has slaughtering capacity for 120,000 cattle per annum. Last yuear it only slaughtered some 33,000 cattle, while it claimed that 200,000 live cattle were exported to South Africa. The government is now contemplating a public-private partnership for Meatco.  

A group of farmers has in the meantime developed plans to form a company Savanna Beef Processors and to construct their own export abattoir. 

Namibian Stock Exchange now part of world federation 

The Namibian Stock Exchange (NSX) has been admitted as a full member of the World Federation of Exchanges (WFE). It is one of only twelve bourses in Africa to 
obtain full membership. 

The NSX has been an affiliate member of the WFE for over ten years. 
The WFE is an international trade group that supports the interests of regulated securities exchanges around the world and promotes widespread access to financial markets and the safety and soundness of the global financial system. 
The NSX CEO Tiaan Bazuin said: “Full membership to the WFE will contribute further in the NSX’s vision of economic growth and prosperity, providing an efficient marketplace for companies to raise capital locally and for savings to be used for the benefit and development of Namibia. It will open our market to a larger international investing pool.” 

New Fitch rating for Namibia 

The international rating agency Fitch has kept Namibia’s BB- rating from a year ago but this time with a positive outlook.  

Fitch expects Namibia’s economy to grow by 2,6 percent in 2023, driven by the extractive industry and a broad-based recovery after the Covid-19 shock. 

“Growth prospects, though, are hindered by weak regional and global growth, tightening global financing conditions, and water and energy supply risks, including the risk of higher energy prices in the event of electricity supply disruptions in South Africa,” Fitch said. Since 2017, Namibia has been rated below investment status due to high government debt, a large budget deficit and low economic growth.

Brigitte Weidlich

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