WINDHOEK - Business people are not enthusiastic about the prospects for the rest of the year, with many of them hinting about holding off additional investments for a while.
The mood is contrary to last year’s disposition regarding the business climate in business circles, which is partially attributed to the uncertainty over the sovereign debt crisis in Europe.
Spain and Italy’s borrowing costs are approaching unsustainable levels, while the European decision makers are still ironing out the final approach needed to resuscitate those economies.
Belt-tightening fiscal policies have already seen huge resistance in some European countries, and continental Europe is currently experiencing job losses as certain industries go deeper into a slump.
The Institute for Public Policy Research (IPPR) reported on the prevailing sentiments among Namibian business people in its Economic Watch for July, using the results from the 2012 Namibian Business and Investment Climate Survey.
IPPR jointly publishes the survey with the Namibia Chamber of Commerce and Industry and the Namibian Manufacturers Association.
“The results from the latest survey indicate that business people are not as upbeat about this year’s business climate as they were in 2011. They also intend to invest less than last year,” said the IPPR’s Economy Watch.
Production data from the Ministry of Mines and Energy reveals that diamond production increased by 1,4 percent and gold production by 20 percent compared to the same period a year ago.
Diamonds and gold are the two sub-sectors within the mining industry not affected by the slowdown in economic activities elsewhere.
However, the slowdown did result in lower spot market prices for other minerals such as copper and zinc.
Uranium prices have shed some ground as well since the beginning of the year (-2.4 per cent) and stand currently at US$50,75 per pound.
The current economic climate suppresses strong demand for additional electricity generation and in turn the demand for fuels such as uranium.
The low spot market prices could result in uranium mining companies stretching their investment plans in Namibia over a longer period of time.
“Consumer demand remains high in Namibia as reflected in vehicle sales and consumer instalment credit growth. Total vehicle sales for the first half of 2012 reached 7 107 units, translating into an increase of 22 percent compared to the first half of 2011.
Growth in consumer demand and credit, however, is of concern to the Bank of Namibia and could influence its future monetary policy stance,” said the IPPR.
Uranium prices have shed some ground as well since the beginning of the year (-2.4 per cent) and stand currently at USD50,75 per pound. The current economic climate suppresses strong demand for additional electricity generation and in turn the demand for fuels such as uranium. As said earlier, the low spot market prices could result in uranium mining companies stretching their investment plans in Namibia over a longer period of time.