The Namibian economy will grow by 4.9% as opposed to the projected 3.8%, the National Statistical Agency has confirmed, putting to rest heavy speculation that the domestic economy could be scaled down because of the spilling-over effects of the Euro-debt crisis.
According to the NSA, the actual growth indicates a resilient force within the Namibian economy although possibilities of lapses, depending on the global trend, remain a realistic issue.
The statistics released this week by the NSA show that the Namibian economy has what it takes to resist the external forces from the Euro-debt crisis, which has seen banks in Greece, Spain and Italy borrowing from the money market in order to cement their capitalisation stands.
Earlier in the year, speculation was rife that the economy would grow by around 3.8% while most analysts argued that the Namibian economic growth figures would need to be revised because of the global economic crisis and the ravaging Euro-debt crisis.
This new figure comes despite the country going through a challenging phase in both the mining and manufacturing sectors since the last quarter of 2011 to date.
The biggest contributor to the Namibian economic performance is the booming services sector where the Namibian banking sector has been declared well-capitalised and having a firm footing.
The NSA statistics show that the fishing and the value addition in that sector also contributed significantly to Namibia’s economic performance.
“The mining and quarrying sector recorded a decline of 8.5% in real added value during 2011 compared to 32.2% registered in 2010. This was brought about by the other mining and quarrying activities, which included uranium, copper and zinc that declined by about 24%,” notes NSA.
Statistician-General, John Steytler attributed the projected healthy growth to an improving horticulture sector, which received a bumper harvest and the mining sector although he maintained mining remains the back-bone of the country’s economy.
“We acknowledge that the economy has grown reasonably but we also admit the secondary industry has not been doing well and there is need for Government to continue creating avenues for growth for the manufacturing industry,” said Steytler.
Steytler also said the public and private sector investments in the construction of both accommodation and public buildings have also kept the Namibian economy afloat.
However, despite the good economic growth, the country’s domestic savings are not in good footing as they are currently at 18% of GDP because of expenditure.
In better performing economies, domestic savings can sometimes go above 40%.
The national savings have been pushed down by dwindling Southern African Customs Union (Sacu) earnings, which have been going down over the past few years.
According to NSA, the country’s savings will start improving if earnings from the five-member customs union, Sacu, start improving.
“In most countries where economic growth is robust, the domestic savings could go as much as 40% but it would be interesting to check out the reasons that drive Namibians to spend often. The driven domestic spending could hamper investment in the future because investors would be skeptical of the economic performances on the ground,” Steytler emphasized.
Namibia’s savings rate is slightly outstripping the investment rate; a move that the newly established NSA says could need to improve in the future. “We would also be worried if there were to be any anomalies in the mining sector, which is the major driver of our economy,” said Steytler.
The GDP figures released by the Government are based on the production factor and do not take into cognisance the expenditure side of the economy.
The NSA also shows the sectoral breakdown of the economic sectors that also contributed significantly to domestic economic performance including wholesale and retail, tourism, transport storage and communication, public administration and defence.