By:Nghhinomenwa-vali Erastus
The extractive sector still dominates the country’s economic outlook.
Mining has been dominating past and current trade statistics, as the country’s export basket refuses to change despite political intentions.
For the past five months, Namibia’s top export commodities are mostly minerals, including fish.
Furthermore, the Bank of Namibia (BoN) Economic Outlook for 2023 and 2024, paints the same picture of the extractive sector maintaining its dominance.
Calculations from the trade statistics for the past five months of 2023 show that diamonds, uranium, gold and copper blisters are dominating the country’s export basket, earning those in mining N$26,6 billion in export revenue.
The only commodity that is in the top 5 but not a mineral is fish, which generated N$7.6 billion in export revenue.
Apart from the mining sector, agriculture – the biggest employing sector,is predicted to record negative growth.
Diamond and uranium are projected to carry the growth load for the year.
The tourism-led sectors are expected to grow at the level of the mining sector as the country gradually gets back to the pre-pandemic levels for travellers.
The BoN Economic Outlook indicated that mining is projected to expand further in 2023, on the back of a strong performance in 2022, but such growth is expected to moderate downwards moving forward.
The diamond mining sector is expected to grow by 5.5% and 9.7% in 2023 and 2024, respectively.
This follows a robust growthof 45.1% in 2022, mainly due to high production from the Benguela Gem mining vesselin the second quarterof that year.
The latest growth estimate for 2023 represents a downward revision from 8.2% published in the March 2023 Economic Outlook update.
The uranium mining sector is expected to grow by 14.8% and 5.2% in 2023 and 2024, respectively, an improvement from a contraction of 2.5% in 2022.
The upgrade of growth rates for the uranium sectors was informed by information collected during company engagements by the Bank during July 2023, as well as observed production volumes during the first half of 2023.
With these growth estimates, the usual risks of water supply interruptions are considered.
During the medium term, uranium mines are expected to increase production further and take advantage of high uranium prices.
The metal ores sub-sector is projected to expand in 2023, but growth is anticipated to decline from 2024 onwards due to the winding down of production from one of the gold mines.
The metal ores sector is expected to grow by 12.1% and 3.4% in 2023 and 2024, respectively, making a recovery from a meagre growth of 0.5% in 2022.
The recovery in 2023 is based on the anticipated increase in gold production.
From 2024 onwards, growth for metal ores is expected to decline as B2Gold Namibia starts to wind down production from the Otjikoto mine, which is planned to close by 2031.
Beyond the extractive sector, the hotels and restaurants sector is expected to maintain a strong growth momentum during 2023 supported by increasing tourist arrivals.
The hotels and restaurants sector is projected to grow by 5.2% and 4.5% in 2023 and 2024, respectively, as the sector continues to recover some ground lost due to the impact of Covid-19.
Despite some notable growth rates in 2021 and 2022, the real value added for the hotels and restaurants sector is expected to be some 19.0% below its pre-pandemic level.
The total number of tourist arrivals at Namibian airports increased by 40.2% during the first four months of 2023, when compared to the corresponding period in 2022, continuing the strong upward trend experienced over the past two years.
BoN’s outlook indicated that growth for agriculture, forestry, and fishing is expected to turn negative in 2023, reflecting weak performance from all sub-sectors.
The agriculture, forestry, and fishing sector is projected to contract by 3.0% and by 2.8% in 2023 and 2024, respectively.
In its outlook, BoN stated that the looming drought is expected to have negative impacts on both livestock and crop farming.
As for the manufacturing, which is mostly beer production, pasta, meat process, diamond processing, and zinc plus others- growth is expected to moderate downwards throughout the forecast period but maintain a satisfactory level.
The manufacturing sector is projected to grow by 3.5% and 3.2% in 2023 and 2024, respectively, representing a slowdown from 5.0% in 2022.
The sub-sectors of manufacturing that are leading growth during 2023 and 2024 include beverages, meat processing, non-metallic minerals products, basic non-ferrous metals, as well as textiles and wearing apparel, according to BoN.
Conversely, sub-sectors such as publishing and printing, and chemical and related products continue to posit either negative or marginal growth rates.
Improved performances for non-metallic minerals products and basic non-ferrous metals reflect increased processing of copper blister and increased cement production, respectively.
The estimated growth for 2023 represents a downward revision from 3.0% released in the March 2023 Economic Outlook update. Email: erastus@thevillager.com.na
Mining Exports Generate N$26,6 Billion In Five Months …diversification remains an elusive dream
