By: Staff writer
The Bank of Namibia (BoN) recently released its quarterly bulletin covering the third quarter, namely the months July through to end September 2022. It noted that inflation stood at 7.1% during the third quarter.
The central bank said Namibia’s economic activity in the third quarter of 2022 increased in the primary and tertiary sectors.
“The improved economic activity in the primary industry was largely attributed to a rise in the production of diamonds and uranium registered in the mining sector,” the BoN stated.
In the tertiary industry, the bank said good performances were reflected in sectors such as wholesale and retail trade, tourism and transport.
“Real turnover in the wholesale and retail trade sector increased, and the tourism sector continued to regain lost ground, as reflected in increased tourist arrivals, however, activity remained below the pre-pandemic levels of 2019.”
Added the BoN: “Furthermore, in the transport sector cargo volumes increased, partly reflecting the increase in the imports of industrial and consumer goods and exports of mineral commodities.”
In the Quarterly Bulletin issued by its director strategic communications and international relations, Kazembire Zemburuka, the bank pointed out that the communication sub-sector continued to benefit from sustained demand for internet data usage.
In the secondary industry, activity in the manufacturing sector displayed positive signs, as reflected in key manufacturing indicators.
“Electricity generation also increased over the same period,” Zemburuka said.
According to BoN, the agricultural sector performed poorly, driven by a decline in the number of cattle marketed, and finally, construction sector activity continued to decline, as both government and private sector construction works and programmes remained subdued.
Namibia’s annual inflation rate both on a yearly and quarterly basis during the third quarter of 2022 ticked up to 7.1%, mainly as a result of increased transport inflation.
“Namibia’s inflation rose year-on-year and quarter-on-quarter by 3.4 percentage points and 1.4% points, respectively, to 7.1% during the third quarter of 2022.”
The central bank said the increase was driven by high inflation for transport, food and housing due to elevated international prices, the effects of the war between Russia and Ukraine and the upward adjustment in the electricity tariffs.
On the fiscal front, the bank said the government’s debt stock rose over the course of the year to the end of September 2022, whereas government loan guarantees declined.
“The total Government debt stock stood at N$135.7 billion at the end of September 2022, representing yearly and quarterly increases of 7.7% and 4.2%, respectively. The increase was driven by a rise in the issuance of both treasury bills (TBs) and Internal registered stock (IRS).”
Meanwhile, external debt declined year-on-year as a result of the redemption of one of the eurobonds in November 2021. Central government’s total loan guarantees declined on a yearly basis by 4.8%, to N$10.1 billion due to repayments of foreign loans guaranteed by government in the transport sector and by the development finance institutions, BoN said.
“Namibia’s current account deteriorated during the third quarter of 2022, mainly due to a larger merchandise trade deficit. The current account balance worsened to a deficit of N$8.6 billion compared to a lower deficit of N$7.0 billion in the corresponding quarter of last year. ”
The central bank attributed this to a larger deficit recorded in merchandise trade, due to imports rising at a faster pace relative to exports.
“The stock of international reserves, however, rose to a level of N$48.0 billion, equivalent to import cover of 4.5 months. This was partly due to foreign asset swap arrangements between the Bank of Namibia and local institutional investors, as well as, in revaluation gains as the Namibia Dollar depreciated against the US Dollar during the period under review.”
BoN said Namibia’s external balance sheet recorded a lower net asset position during the third quarter of 2022 compared to a year ago due to a rise in direct and other investment liabilities that rose faster than foreign assets.
The central bank also noted the Real Effective Exchange Rate weakened on a quarterly and yearly basis signalling a gain in competitiveness of Namibian exports.
