By: Nghiinomenwa Erastus
If one deducts minerals export, Namibia monthly export barely crosses N$3 billion.
The Villager has scrutinized the country’s monthly export for 2021, choosing the three months (October, November and December) to present the picture.
From the export revenue data analyzed for the months, mineral commodities earned 68,4% of the country foreign reserves.
It depicts the country’s narrow industrial base and a skewed distribution of productive capacity favouring non-tradable sectors making the country particularly vulnerable to low commodity prices. This scenario put various temporary maintenance care.
Without a diversified export base, literature shows that a country with an export composition like Namibia’s macroeconomic performance quickly worsens, and their residents experience income losses when commodities prices fall.
For the three months of 2021, Namibia had exported N$27,7 billion worth of goods; however, N$18,9 billion of that income came from six mineral products.
These are copper blisters, uranium, precious stones (diamonds), non-monetary gold, Ores and concentrates of base metals copper ore and concentrates, which accounted for 68,4% of the country’s export revenue.
Economists termed a phenomenon where significant resource discoveries become harmful to economies in the long-term, following the Netherlands’ gas discovery in the North Sea.
The disease was transmitted primarily via exchange rate movements, following a large inflow of foreign currency, due to natural resource discovery, a surge in commodity prices, and investment.
The Villager analysis also found that Namibia depicts some of the observed characteristics, with most of the investment flow in the country going to the mining sector and foreign currency is mostly flowing through mineral commodity export.
New research has revealed to World Bank economists that catching this disease is much easier than previously thought- simply arising from the inequality in the distribution of natural resource rents.
This, as the resource boom, increases spending on non-tradable luxury goods and services disproportionately.
For the period under review, copper blister alone earned N$7,4 billion, almost equivalent to what the non-mineral sector made in export, followed by diamonds that brought in N$4,2 billion.
Then uranium generated N$3,6 billion in three months.
In October 2021, Namibia exported goods worth N$8,7 billion- almost 70% (N$5,9 billion) was generated by minerals.
For November 2021, Namibia sold N$9,7 billion worth of goods; only N$3,2 billion of that income was generated from the sales of non-mineral products.
This is the same observation even for December 2021, where the country generated N$9,3 billion in exports and N$6,5 billion were mineral products, the statistics show.
The statistics highlight the country’s export diversification headache faced despite export-diversification aspiration that involves including more value-added products from different sectors.
For the three months (October, November and December 2021), only N$8,7 billion export revenue was derived from non-mineral products- out of this, N$3,4 billion was generated through the sales of fish, live animals, fruits and alcohol.
Live animals and fruits (primarily grapes) top the list of significant income earners from non-mineral commodities for the three months.