China emerges as Namibia’s most important exports destination
The cozy relationship between Namibia and her “all-weather-friend” China is bearing fruits with the eastern economic giant emerging as the most important export destination accounting for 18.3% of all exports or N$3 454million based on latest first quarter trade statistics.
According to Namibia Statistics Agency (NSA), exports to China consisted almost exclusively of copper cathodes and ores and concentrates (97% of total exports to China).
South Africa was Namibia’s second most important export market with 17.8% of total exports, representing a decline by 31% from N$4 888 million to N$3 352 million owing to a sharp drop by 65% in the value of exported diamonds.
Says NSA, “South Africa remained the main market for Namibia’s manufactured products such as fish, beverages and meat that accounted for some 21% of total exports to South Africa.”
Belgium and Botswana ranked third and fourth respectively on the list of export destinations while to Belgium were dominated by copper cathodes (80%) and to Botswana by diamonds (95%).
All in all, NSA notes that the European Union emerged as Namibia’s main export destination accounting for 35.2% of total exports followed by the Southern African Customs Union (29.5%) and the BRIC countries (Brazil, Russia, India, China) with 20.1%.
Non-SACU SADC member states absorbed 7.6% of Namibia’s exports, while COMESA member states, some of which are also SADC member states, accounted for 6.8%.
Almost 95% of Namibia’s total exports were destined for these economic groupings indicating that Namibia exports so far little to African countries outside of SADC and COMESA.
Meanwhile, Namibia’s current account deficit narrowed to N$521 million compared to N$814 million during the same period last year.
PSG Namibia expects the current account deficit to widen during 2018, due to higher fuel import costs, a modest recovery in import volumes due to improved consumer spending and lower Sacu revenues, which will only be partly offset by improved exports.
On the side of debt, domestic debt increased by 16.8% year-on-year in June compared to a 27.8% recorded in the prior year with total domestic debt standing at N$50 billion at the end of June, double the levels seen in 2015.
“The slowdown can be attributed to a slow growth rate in longer than 12-months securities which increased by 7.3% compared to 26.3% recorded in the prior year,” says Simonis Storm Securities’ Indileni Nanghonga.
Despite the slow growth in longer dated maturities, borrowing through treasury bills and inflation linked bonds increased drastically by 29.3% y-o-y and 29.0% y-o-y, respectively.
This is evident in the low appetite for long term maturities and high demand for short term maturities in the bond auctions.
Private Sector Credit Extension increased at a slower pace of 5.5% y-o-y in May 2018 hating a four months’ upward trend, Simonis Storm says.
Adds Nanghonga, “Households extended their borrowing through unsecured lending which increased by 12.6% y-o-y, while secured lending continued its downward trajectory. Lending through overdraft facilities extended through households increased by 3.0% m-o-m in May compared to a 0.3% contraction in the prior month.”
“Furthermore, credit extended through corporates increased by 4.3% y-o-y in May 2018 on the back of an increase in mortgage loans of 10.2% y-o-y. Other loans and advances category also increased significantly by 14.3% y-o-y compared to a 2.2% growth rate in the prior year.”