By:Staff writer
According to financial experts, Namibia’s main export products during October 2022 were uraniumwhich was mainly shipped to China, fish in the main exported to Spain, Zambia and the Democratic Republic of the Congo, and diamonds chiefly sold to the United Arab Emirates and Belgium.
The experts at Simonis Storms have however observed that the country continues to record a trade deficit and has done so in every month this year, with the monthly trade deficit averaging N$2.8 billion year to date.
“Exports increased by 13,2% year-on-year in October 2022, whereas imports decreased by 23.4% year-on-year in October 2022. On a monthly basis, both exports and imports decreased by 10.2% month-on-month and 15.5% month-on-month in October 2022, respectively. Namibia has N$44.8 billion in foreign currency reserves (about 4.8 months’ import cover),” they said.
Petroleum oils bought from Saudi Arabia were the most imported products into the country, followed by motor vehicles, which were mainly imported from South Africa. Ores and concentrates of precious metals bought fromBulgaria, and alcoholic beverages mainly purchased from South Africa follow.
“While the value of exports have exceeded export levels recorded in 2021, the import bill has been inflated above levels observed in the last three years mainly by higher petroleum oils,a weaker Rand exchange rate and higher food prices. We believe that net exports (exports less imports) will weigh on the GDP calculation following the expenditure approach. Also, consistent trade deficits have led to outflows weighing down on Namibia’s foreign currency reserves.”
According to the analysts at Simonis Storm, declining factory and export orders implies that demand for commodities will remain subdued in the short run.
“We expect commodity prices to continue showing signs of price moderation, which will weigh on mining export earnings for local miners, but should lead to lower merchandise goods prices and so benefit the consumer by lowering inflation to an extent, given that Namibia imports most of what local households and businesses consume,” they said.
They have also maintained that they expect a negative outlook on global trade, despite improvements in the supply chain pressures, transportation costs, ship availability and measures of inventory performance.
“This is, they said, is expected to reduce demand for commodities, which is Namibia’s main export product, and lead to trade deficits in 2023 persisting.
“While developing and emerging markets are forecasted to grow faster than advanced economies in 2023 (according to the IMF), this is unlikely to assist in improving Namibia’s exports next year as minimal mineral beneficiation and merchandise goods manufacturing takes place in developing countries and emerging markets are expected to see further declines in demand from advanced economies in 2023.”
