Economy Slumps in 3rd Quarter

0
24

By Wezi Tjaronda WINDHOEK THE Namibian economy performed poorly in the third quarter of 2005 (July to September). Not only did the Gross Domestic Product record a decline of 2.6 percent, but also its performance was poor compared to an increase of 6.4 percent during the preceding quarter. In its quarterly bulletin, the Bank of Namibia notes that the poor performance was a result of the performance of a number of sub sectors in the primary industry, namely mining, fishing, manufacturing and hotels and restaurants. Since the first and second quarters of this year, the fishing and mining sectors have continued to show a decline, unlike the agriculture sector. Agriculture, hunting and forestry recorded growth rates of 0.4 in the second quarter and an increased growth of 2.8 percent in the third quarter. The mining and quarrying as well as fishing sectors, however, performed poorly throughout the two quarters recording a negative growth of -5.8, and -5.9 percent in the second and third quarters respectively. The hotels and restaurants sector also declined by 6.8 and 9.2 percent in the two quarters, while manufacturing, having recorded an increased growth of 5.4 in the second quarter, recorded a decline in the third quarter by 7.0 percent. The bulletin says the growth recorded in the agriculture sector resulted from an increase in livestock that is marketed locally, which increased by 8.3 percent compared to 2.3 percent registered during the second quarter. But compared to the same time last year, this year’s number of cattle is low. Last year, 14.6 percent of the cattle were marketed. It also attributed the higher growth of numbers of cattle marketed to South Africa to a high demand of weaners as well as poor grazing in Namibia. “The grazing capacity is generally low in Namibia and not able to accommodate too many livestock. To this effect, it was necessary to sell off weaners in order to avoid overgrazing,” said the bulletin. As for fishing, its value addition has contracted since the end of 2004. Its contraction continued because of the landings of all fish species especially deep water and pelagic species, which the bank estimates to have declined by 98 and 49 percent respectively. The high operation costs experienced by the industry due to high fuel costs and a relatively strong currency have brought turbulent times to the industry. It has resulted in some fish factories undergoing liquidation and retrenchment of workers in a country whose unemployment rate is already over 30 percent. Apart from these factors, the small sized fish landings as well as low prices and competition poised by aquaculture in the international markets also impacted negatively on the fishing industry. Mining and quarrying also performed poorly as the value addition contracted by 21.5 percent, unlike a growth of 50 percent that was recorded during the corresponding quarter of 2004. “The decline is also exceptionally higher than a fall of 5.9 percent recorded during the preceding quarter,” said the bulletin. The decline in diamond output caused this fall as it contracted by 30.9 percent on a year-on-year and by 5.9 percent on a quarter basis during the quarter under review. This situation is due to the fact that mining activities have shifted from rich ore area in 2004 to an area with less diamonds. The output of other base metals and other minerals such as copper, zinc, gold, metal, increased due to the rising prices on the international market, added the bank in its quarterly bulletin. The secondary sector, which covers the manufacturing, water and electricity and construction performed positively with the exception of manufacturing. This sector, says the bulletin, saw its value addition decline by 7 percent compared to a growth of 2.4 percent during the same time last year because of a decrease in its sub sectors. For instance, the value added for fish processing and the manufacture of other food products declined while textiles and clothing also declined in response to the closure of factories. This year, a subsidiary of Ramatex, Rhino garments, closed and laid off its workers due to low demand from its export markets. Other sub sectors such as beverages, meat processing, wood, other manufacturing, paper printing, chemicals, rubber, plastic, metal, minerals and fabricated products among others, showed an increase.