Namibian Economics To The Point – September 2022

30 Sep 2022

Exchange rate Euro/N$ on 29 Sept 2022: 1 Euro =17,58 N$

September was a month with two seasons, sudden cold spell between warmer spring weather and a few drops of rain.

The Namibian Competition Commission has approved the takeover of Namibian Breweries by the Dutch beer giant Heineken, but with several conditions. No retrenchments may happen for five years and some activities of Heineken in South Africa must be shifted to Namibia.

Namibia has increased its charcoal exports in 2021 with 158,864 tons destined mainly to Europe, Great Britain and the USA. This year, exports may exceed those of last year: by August, some 81,344 tons were already exported, according to the Charcoal Association of Namibia (CAoN).

Namibia’s economy grew by 5.6 percent during the second quarter.

The privately owned aviation company Fly Namibia entered into a partnership and code-sharing agreement with a South African counterpart.

The Namibian government and the European Union (EU) plan a new partnership focusing on raw materials, trade and green hydrogen.

The existing law for the extraction of minerals of 1992 is undergoing a review by the mines and energy ministry.

The Bank of Namibia will soon draft a policy and regulations for bitcoin and crypto currencies.

Inflation in Namibia jumped to 7.3 percent at the end of August, according to the Namibia Statistics Agency (July: 6.8%).

Fly Namibia airline cooperates with South Africa’s Airlink

Fly Namibia, a subsidiary of the privately owned company Westair Aviation in Namibia has signed a cooperation and code-sharing agreement with the South African independent airline Airlink.

This will also support both airlines’ shared longer-term ambition to establish the Hosea Kutako International Airport as the central connecting hub and base. Domestic flights will continue as usual and more destinations like Luanda, Maun and Victoria Falls are planned for Fly Namibia.

Fly Namibia currently operates domestic flights from Windhoek’s Eros Airport to Ondangwa, Rundu and Katima Mulilo and regional flights to Cape Town, operating six times a week from the Hosea Kutako International Airport (HKIA).

From its Johannesburg hub, Airlink serves Windhoek up to four times a day and Walvis Bay daily. From Cape Town, Airlink operates up to three return flights a day to Windhoek and a daily return flight to Walvis Bay, according to its Managing Director Rodger Foster.


Fly Namibia, has recently joind hands with the SA aviation company Airlink. Fly Namibia currently operates domestic flights from Windhoek’s Eros Airport. 
Photo: Contributed


To realise its full economic potential, Namibia will depend increasingly upon air connectivity to move people and goods between markets. “By joining hands with Airlink and becoming part of its global network, we will be even better able to serve foreign and local tourists and businesses”, said André Compion, the Managing Director of Fly Namibia at the signing ceremony on 28 September 2022.

Steady economic growth for five quarters

Namibia's economy has shown steady growth in the five consecutive quarters from the 2nd quarter 2021 until June 2022. Growth was an average of 5.5 percent,

According to the latest figures released by Namibia Statistics Agency (NSA) at the end of September, the second quarter from April to June 2022 showed a growth of N$5.4 billion (about 306.5 million Euros) or 5.6 percent to N$48.6 billion (about 2.61billion Euros) driven by the mining sector. Mining and quarrying grew by 29.4% and thus contributed 2.6% to the GDP growth followed by the financial services sector with 1.1%.

“The upsurge in the mining sector is mainly attributed to diamond mining, which recorded an increase of 53.7% during the quarter under review," the NSA Statistician General Alex Shimuafeni said.

"During the period under review, the manufacturing sector was the highest contributor to GDP accounting for 12.1%, followed by wholesale and retail trade (10.2%) and agriculture and forestry (10%)," according to the NSA report.

Goods and services exported stood at N$16.3 billion (925,6 million Euros), but imports rose to N$25.5 billion (about 1,45 billion Euros) in the second quarter this year. The trade deficit thus increased to about N$9.2 billion (some 522,5 million Euros) during the 2nd quarter this year.

EU and Namibia discuss joint economic goals

Namibia’s foreign ministry and the ambassadors of the member states of the European Union, who are accredited in Namibia, one-day meeting at the end of September. The Namibia-EU Political Dialogue” also discussed economic cooperation, trade and climate change.

Special focus was given to Namibia’s industrialisation aspirations. The parties discussed the implementation of the Economic Partnership Agreement (EPA), as well as support to the implementation of the African Continental Free Trade Area (AfCFTA).

The new EPA agreement is foreseen to be signed in June 2023 and will replace the existing Cotonou agreement. Deliberations also focused on a planned partnership on sustainable value chains for critical raw materials the EU is interested to import and green hydrogen.

“EU member states are amongst the major trading partners of Namibia, and as the country moves towards establishing itself as a green hydrogen hub, there will be enhanced trade and investment between the two sides,” said Namibia’s Foreign Minister Netumbo Nandi-Ndaitwah.

Once concluded, the new partnership will give rise to a new chapter of economic cooperation between Namibia and the EU, “including the private sector, promoting industrialisation, the beneficiation to critical raw materials, which are strategic for energy transition and the development of a green hydrogen economy in Namibia”, the joint statement said. No further details were given after the closed-door meeting.

New mining law in the making

The Ministry of Mines and Energy has held several information sessions about new developments like green hydrogen, oil and gas discoveries and relevant legislation. The Minerals Act of 1992 is undergoing an extensive review, with the aim to attract more Namibian participation. Before a mining license can be issued in future or extended, applicants will have to enter into an agreement with the ministry that includes a Namibian stake of five percent.


The Ministry of Mines and Energy has held several information sessions about new developments like green hydrogen, oil and gas discoveries and relevant legislation.
Photo: Contributed


Royalties and levies for all minerals will be capped at a maximum of ten percent.

In the future, mining companies will also have to process (“beneficiate”) the minerals in Namibia. This also requires consultation with the Ministry of Industrialisation and Trade. Each mining license holder will be required to undertake that a percentage of the annual production will undergo processing, smelting or other treatment processes in Namibia, but only "if the appropriate facilities are available".

The draft of the revamped minerals law provides for the establishment of an advisory body to issue prospecting permits and mining permits. The bill also provides for financial coverage in the event of mine closures. This will ensure that the costs of tailings rehabilitation of mines are borne by the companies and not the state.

The new law will also take into account small miners, which are not covered by the old 1992 legislation.

Brigitte Weidlich

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