Windhoek-“Namibia’s economic growth outlook for 2018 looks positive and we can remain cautiously optimistic.”
This is the sentiment with which economist at Standard Bank, Naufiku Hamunime, forecasted the national economy at the recently held economic outlook session for 2018 in Windhoek.
This session comes just barely a week before the much-anticipated national budget review slated for the March 7, by Finance Minister Calle Schlettwein.
Overall, Hamunime cites that there have been positive developments in the economy and domestic growth is expected to increase to 2.2 percent and 3.1 percent in 2018 and 2019 respectively. This, she says, will likely accelerate over the next few years. There is also the possibility that the local economy could benefit from increased global demand for raw materials as a result of projected growth in emerging markets and advanced economies.
Following the 2016 economic slowdown, the country’s GDP growth slowed to 1.1 percent as a result of low commodity prices, construction slowdown, reduced SACU revenue, Angolan economic crisis, reduced government spending and drought.
According to the Bank of Namibia the domestic economy remained weak in 2017 with GDP having only growing by 0.6 percent which reflected a downward revision from 2.1 percent growth projected in July.
This minimal growth experienced last year reflects deeper than previously expected contractions in the construction, wholesale and retail trade sectors, as well as slower than expected growth rates for manufacturing, electricity and water and the public sector.
Hamunime further noted that the primary sector performed quite well last year. This was largely off the back of recovery that was seen in both the agriculture and mining sectors. Last year growth in the agriculture sector increased to 8.1 percent as a result of normalising rainfall patterns.
“However growth in the sector is expected to moderate in 2018 and 2019 due to uncertain weather conditions. The fishing sector felt contraction and a slight recovery. There’s also been strong recovery in the mining and quarrying sectors largely as a result of increased diamond mining,” said Hamunime.
“Going forward uranium mining is expected to increase, however the effects of this will be somewhat muted by subdued uranium prices. This coupled with the expected slowdown in diamond mining is expected to result in moderate growth in the mining sector.”
As for the secondary industries there appeared to be a contraction in 2017 and as a result is expected to remain depressed in 2018. She states that growth in the construction sector will generally remain depressed following the completion of major projects in the mining sector and ongoing fiscal consolidation by government.
Hamunime concluded that government has been making moves to improve the economy through strong fiscal policies and a strong drive to reform under-performing State-Owned Enterprises. She says commendable efforts have also been made to stabilise the fiscus, whilst continuing to invest in productive assets through the establishment of the Infrastructure Fund and the African Development Bank loan.