WINDHOEK – Namibia is not doing too well in its business of selling her own products to the world and buying the products she needs to keep herself financially afloat.
And it has been happening for sometime since 2015, with an odd three good months here and there. But overall figures show that Namibia is haemorrhaging the little foreign currency she has in her pockets, which is required to pay for the imports of goods from the rest of the world where the Namibia dollar means nothing.
To have a foreign currency balance on one’s account requires selling a great deal of own products to the outside world, while trying to buy less of their products.
Yet according to the latest figures from the Namibia Statistics Agency (NSA), this has not been the case for past couple of years and as of April 2018 the country’s trade balance is in the minus with N$8.3 billion.
The problem, according to the NSA’s latest Trade Statistics Bulletin, is that Namibia has been paying to import high valued manufactured commodities and machinery from the rest of the world, while selling to the rest of the world “mainly primary commodities that are of low value, with the exception of diamonds”.
At December 2017 the deficit was N$5.6 billion, and the annual figures trade balance deficit shows “a remarkable deterioration of 71 percent”, the NSA report said.
The majority of Namibia’s exports is mineral products, which are shipped without any additional value done, to China, Belgium, Italy and Botswana.
The effects of such trade deficits are that the country has not been earning enough foreign currency, as it has been using more of its money to pay for goods while earning very little from what it sells to the outside world. The economy has not been doing well, as is currently evident, and job opportunities are becoming less.
Also for the last year Namibia’s top export destination became the European Union (EU), and no longer Namibia’s neighbouring countries within the Southern African Customs Union (SACU) which has been the export destination for a long time, thereby, unintentionally, kicking to the kerb the spirit of regional integration. Exports from the EU rose 79 percent to reach N$6.3 billion, from N$2.8 billion.
“The EU absorbed 35 percent of Namibia’s total exports, the largest share relative to other economic regions,” the NSA said in its documents. At N$5.3 billion the value of exports to SACU, on the other hand, is now below what is sent to the EU.
“A different trend was witnessed q-on-q, when exports to SACU weakened, falling by N$2 billion (28 percent) from N$7.3 billion registered in the fourth quarter of 2017,” said the NSA Trade Statistic Bulletin.
Exports to the BRIC region, consisting of Brazil, Russia, India and China, increased to $3.6 billion from a mere N$499 million in the first quarter of 2017.
BRIC’s contribution to Namibia’s total exports rose to 20 percent, from a share of 3 percent year on year and from 9 percent share quarter on quarter.
While exports to BRIC are increasing, the exports to other SADC countries, excluding SACU members, are falling. As of now they have declined 7 percent, to register N$1.4 billion from N$1.5 billion.
Interestingly the African region that is increasingly picking up as Namibia’s export market is the Common Market for Eastern and Southern Africa (COMESA), which last year absorbed N$1.2 billion worth of Namibian exports, up from N$1.1 billion export earlier.