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Slight exports increase encouraging- EAN

by Kelvin Chiringa

The Economic Association of Namibia (EAN) has commended the increase in the value of exports in the first quarter of 2018.

The value of exports increased slightly in the first quarter 2018 compared to the fourth quarter 2017 from N$18 352m to N$18 829m owing mainly to a sharp increase in the export value of copper cathodes that rose from N$2 026m to N$5 259m.

The value of total exports reached the highest level since the first quarter 2016 when it stood at N$21 963m. 

EAN’s Klaus Schade however cautioned that, “rising oil prices in the second quarter that increased to USD74.44 per barrel on average compared to an average of USD66.86 per barrel during the first quarter and USD49.55 per barrel in the second quarter 2017 coupled with a depreciation of the Namibia dollar against the USD in the second quarter by 7.8% could raise the import bill.”

“The closure of the Langer Heinrich Uranium Mine will on the other hand affect exports negatively. These factors could again widen the trade deficit and put further pressure on the foreign exchange reserves. In order to finance the trade deficit Namibia needs to improve the competitiveness and design and implement smart policies that attract Foreign Direct Investment. FDI will result in an inflow of foreign currency and combined with domestic investment create jobs and increase exports and or reduce imports,” he said.

According to trade statistics released by the Namibia Statistics Agency, the value of copper cathodes dominated the export list accounting for 27.9% to total exports or N$5 259m.

However, 93% of this value was not produced in Namibia, but was imported and re- exported.

Excluding re-exports, diamonds would be the largest export item with N$4 237m accounting for 22.5% of exports.

The export value of diamonds dropped by 37% compared to the last quarter 2017 (N$6 714m).

The value of exported fish followed on third place (N$2 389m) slightly ahead of the value of exported ores (N$2 248m) accounting for 12.7% and 11.9% of total exports respectively.

The value of exported fish was the third highest since the first quarter 2014.

Spain absorbed the largest chunk of Namibia’s fish exports (33.7%) followed by South Africa (18.2 %), Zambia (11.1%) and DRC (7.3%). 

The value of imports grew by 14% from N$23 941m in the fourth quarter 2017 to N$27 177m. It is the highest value since the third quarter 2015 (N$25 295m). The increase was caused by the once-off importation of a vessel at a cost of N$3 741m. 

The value of imported copper cathodes more than doubled from N$1 521m to N$3 523m. Imported copper cathodes are re-exported. In the first quarter 2018 copper cathodes to the value of N$4 877m were re-exported compared to N$1 684m in the last quarter 2017.

The higher value of re-exported copper cathodes compared to imported cathodes suggests that not all imported copper cathodes in previous quarters were immediately exported.

Re-exported copper cathodes accounted for 92.7% and 83.1% of total exports of copper cathodes in the first quarter 2018 and fourth quarter 2017 respectively.

Copper cathodes were imported from Zambia placing the country as the third most important source of imports behind South Africa and Bahamas (import of a vessel). 

Mineral fuels & oils accounted for the third largest share of imports valued at N$3 072m or 11.3% of total imports. Fuel imports rose by 33.4% compared to the previous quarter.

Boilers and machinery accounted for 8.3% and vehicles for 7.1% of total imports while 17% of the value of imported vehicles and 10% of imported boilers and machinery were re-exported.

The value of imported vehicles was the third lowest since the first quarter 2014. Imported diamonds contributed 4.7% or N$1 268m to the total import bill.