Staff Writer
A deteriorating global outlook will weigh heavily on Namibia’s export potential. This is according to a Simonis Storms report on trade statistics for July. This comes as exports nearly doubled in July 2022 from 12 months ago, rising by 99.6 per cent y/y.
According to the report, the latest manufacturing purchasing managers indices (PMIs) from Namibia’s main trading partners are on a downward trend.
“One of the main categories driving PMIs lower is a decline in export orders, taking manufacturing PMIs closer to the critical 50 index level which indicates contractions are more likely,” it said.
Simonis Storms, in the report, said the declining trend in the Eurozone, UK, and US suggests a deceleration in activity in these advanced economies.
In addition, the researchers say that domestic demand is likely to remain subdued with Namibia’s GDP projected to grow by a modest 2.5 per cent in 2022, weighing on import activity.
“However, inflationary effects are likely to keep the value of imports above exports for the remainder of the year, leading to further trade deficits,” the report reads.
In the same month imports increased by 60.1 per cent y/y.
However, it said the value of exports is still overshadowed by a rising import bill, where the trade deficit almost doubled on a monthly basis (↑70.9 per cent m/m) and rose 19.6 per cent y/y in July 2022.
The report further states that Namibia recorded a trade deficit in each month YTD, averaging a monthly trade deficit of N$3.5 billion.
This it said is larger than the average monthly trade deficit recorded during the same period (January to July) last year.
Moreover, the financial researchers at Simonis Storms found that a rising import bill has been driven by elevated global oil and petroleum product prices, together with a weaker Rand exchange rate that has driven the Namibian dollar value of our imports significantly higher.
“It is, therefore, inflationary effects keeping the value of total trade in 2022 above levels seen in 2021 and 2020.”
The trade statistics also state that oil imports account for about 18.3 per cent of total imports on average.
“All key export categories decreased on a monthly basis: manufacturing (↓ 4.0 per cent), mining (↓ 24.8 per cent and agriculture (↓ 5.5 per cent). Namibia’s main export markets in July 2022 include Botswana (20.5 per cent), South Africa (19.8 per cent), China (10.0 per cent), Zambia (8.8 per cent), and the Netherlands (6.6 per cent).”
