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Projected economic growth not unrealistic - Analyst

Fri, 30 June 2017 15:24
by Rodney Pienaar
News

Director of SME Compete Danny Meyers said the Minister of Finance, Calle Schlettwein statement of the state of the economy of Namibia is not unrealistic in an exclusive interview with The Villager Newspaper last week.

Schlettwein stated that Emerging Markets and Developing Economies are expected to gain momentum raising above 4.5% from 4.1% in 2016 with growth in China is projected to remain static but above 6 percent.

 “Like the Minsters view that growth globally is on rise is supports, the ?gures are not unrealistic. Although the medicine has been biter, all indications are that remedial action is working with a turnaround in sight. However, discipline remains the order of the day when it comes to expenditure. So government will have to continue tightly controlling expenditure and focus on only must have programmes and projects. The nice to have ones must remain on the backburner,” Meyer said.

He further added that there has been no deviation on the part of the government send out a encouraging signs and with such display of commitment to ride the storm, dark cloud will soon dissipate and the economy will be back on a growth trajectory.

 However, the rate of economic growth will have to be at a much higher rate than over the past two decades to achieve goals as articulated in the Harambee Property Plan (HPP), and the National Development Plan 5 (NDP), The Villager Learnt. A research analyst at the Namibia Equity Brokers (NEB), Ngoni Bopoto reiterated the analysis under review assumes that any policies to address inequality will be formulated in a way that will deter foreign investors on a large scale.

“Fitch’s af?rmation portrays con?dence in GRN’s ?scal consolidation agenda and to certain extent Namibia’s sovereignty as the issue of contagion from South Africa does not receive noteworthy mention. This is consistent with our expectations.

According to Fitch, key ratings drivers remain Namibia’s strong growth potential and record of political stability on the positive side while, the high ?scal and external de?cits weigh on the negative side. Government’s commitment to address the ?scal de?cit over the next two years is noted which we believe implies Fitch’s relative con?dence in GRN’s ability to narrow the de?cit albeit in a more conservative manner,” Bopoto said.

He further noted that this, coupled with Fitch’s expectations of 2% growth this year underpin the investment grade ratings af?rmation.  A sustainable narrowing of the current account de?cit will in our opinion require more focused effort to address structural challenges facing Namibia’s balance of trade.