The Namibian financial system continued to be robust and resilient in the financial year 2015, notwithstanding exchange rate volatility and declining international reserves, as shown in the recentlyreleased banking reports.
As noted in the latest Bank of Namibia (BoN) Stability Report, the Namibian dollar depreciated by 9.4 % for the first four months of 2014, compared to the same period in 2014. However, the impact of a weaker currency did not filter through the inflation.
In a recent interview with Primefocus magazine, BoN Deputy Director of Strategic Communication and Financial Sector Development Emma Haiyambo said to cushion the effects of the depreciation of the SA Rand on the Namibian Dollar, the central bank remained committed to ensuring that the country has sufficient foreign international reserves to protect the currency peg.
“The country’s international reserves have, however, been declining in the past, largely due to the high import of luxury items such as vehicles, TVs, etc, prompting the Bank to respond by increasing the policy rate (twice this year already). Collectively as Namibians, we could minimize the impact of the depreciation by switching from the consumption of imported goods to domesticallyproduced goods such as Nam-milk, for example, and also minimize the importation of luxury items as the latter unduly deplete the country’s scarce international reserves”, she noted.
Despite all the abovementioned obstacles, the financial intermediation remained strong, with the latest Namibia Statistics’ Agency (NSA) release showing that the financial intermediation sector had grown by 5.4% in real value added in the first quarter of 2015, although it was a slow growth compared to 7% value added in the first quarter of 2014.
The Namibian Stock exchange (NSX) also showed a stable performance in the financial sector in the course of the year. Bank Windhoek Holdings Limited (BWH), the only local bank listed on the NSX, has shown a progressive performance during the year as it traded at N$ 13.2 in January, slightly increasing to N$ 15.56 in June, and by the end of August standing at a high N$ 15.81.
First National Bank Holdings has also shown a similar trend, with its trade on the market moving up from N$ 26.57 in January to N$ 32.78, and standing at N$ 40.12 by the end of August.
FNB Holdings also posted good results in their financial year ending June 30, reporting a steady increase and producing a profit for the year 2015 in the figure of N$ 999m.
Standard Bank (SBN) Group on its side had an unstable performance on the NSX, starting with N$ 154 in January and upping it at N$ 152.28 in July. By the end of August, it had slowed to N$ 143.4. However, Standard Bank’s financial results ending 30 June 2015 showed a positive performance as they achieved a profit-after-tax totalling N$ 235m.
The year 2015 was also an important milestone for SBN as they totalled 100 years in the country after their first branch opened in Luderitz in southern Namibia.
Besides the financial intermediation, other sectors which have shown growth within the financial year 2015 despite economic challenges relating to external macro-economic environment, are the hotels and restaurants’ sectors.
The NSA report said the hotels and restaurants’ real value added showed a growth of 7.1 % in the first quarter of 2015, although it was a slow growth compared to the previous year as it had recorded an increase of 22.9% then.
Despite the various challenges, as noted by the Windhoek Country Club and Resort (WCCR)’s Board of Directors’ chairperson Sven Thieme, the WCCR managed to produce good result in its financial year 2015.
Thieme noted: “Hotel turnover increased by 13% year-on- year, with an exceptional performance by the food and beverages department, which increased turnover by 21%. Revenue year-onyear was static at N$157m. This, however, needs to be seen in the context of exceptional growth. Room revenues rose by 7%, and the average room rate by 10%”.
He added that occupancies remained flat when compared with the previous year, but once again compared to the previous breaking year, the occupancies this year are still an excellent achievement.
Looking ahead, Thieme noted that the corporate business outlook for Namibia remained positive against the backdrop of a peaceful democracy. There is, nonetheless, quite a bit of turbulence in the world at large with a degree of volatility and uncertainty.
“Europe most definitely remains under pressure, which naturally affects travel to Southern Africa and the spill- over to Namibia. In our own country, we also feel that corporate companies are still to a large degree engaged in cost-cutting measures concerning non-essentials, and this can negatively impact the hospitality industry. Furthermore, as a country we remain unable to attract large international conventions, mainly due to a lack of a world-class convention centre. Clearly, the industry needs to make strides towards its meeting, conventions and events’ facilities if it holds any hopes of becoming a contender for this lucrative business segment in the years to come,” he stated.