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Namibia’s 2018 growth expected to be steady

12/02/2018
by Kelvin Chiringa
Business

According to the Standard Bank growth outlook for the domestic economy, growth is expected to be mild while resources will remain the major growth drivers.

A recovery in the agriculture and mining sectors in 2017 supported a strong industry growth in 2017 and in the medium term agriculture is expected to slow down while production in uranium will increase.

“Industry performed poorly in 2017, largely on account of steep contraction in the construction sector,” says the bank.

However, in the medium term, manufacturing is expected to improve while construction is expected to continue to contract.

While growth in the tertiary industry slowed during 2017, in the medium term, industry is expected to maintain a steady growth with wholesale and retail trade expected to recover as the weak domestic economy improves.

The possibility of benefiting from projected growth in emerging ?markets and advanced economies will also be a factor in economic growth this year. ?

Production of uranium is expected to increase by almost 50% ?in 2018 at the back of uncertainty surrounding price recovery. ?

“As mining output increases, it will mitigate some of the impact ?from other sectors that are in decline while there is a possibility that the services sector will profit in the short term from ?improvement in the Angolan economy,” says the bank.

Retail showed a marked decline in 2017, however, expected eventual ?increase in consumption demand in 2018 will see some recovery in retail.?

On the risk side, slow recovery of global demand for commodities could affect both growth and fiscal revenues as well as low growth amongst key trading partners.

Slow growth in South Africa - SACU revenue and persistently low uranium prices remain a major risk along with unreliable weather patterns which threatens agricultural output.

?Slow recovery of both private and public demand will continue to weaken the secondary and tertiary sectors.?

Meanwhile the policy uncertainty that comes with the New Equitable Economic Empowerment Framework (NEEEF) and the Namibian Investment Promotion Act (NIPA) still lingers.

The onus is now on government to continue measures to stabilize the fiscus.

The bank has also said there is a need for a stronger emphasis on reforming non-performing SOE’s.

Meanwhile in the region, growth is projected to increase to 2% and 2.4% in 2018 and 2019, respectively.

This is lower than the African average of 3.3% and 3.5% for 2018 and 2019, ?respectively, mainly because of slow growth in South Africa. ?

Meanwhile, growth in Southern Africa nearly doubled in 2017 to 1.6% up from 0.9% in 2016.