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Wholesale sale and retail trade slowed down

Fri, 9 June 2017 18:08
by Rodney Pienaar
Business

According to the recently released National Accounts by the Namibia Statistics Agency (NSA), the growth in real value added for the wholesale and retail trade sector slowed to 3.4% in 2016, compared to 8.2% registered in 2015.

The slow growth in wholesale and retail trade sector is mainly refl ected in the sales of vehicle and clothing subsectors that contracted noticeably in 2016. Bank of Namibia, Deputy Director of Corporate Communication Kazembire Zemburuka, told The Villager. “The slowdown in economic activities during 2016 has affected activities in the wholesale and retail trade sector.

“Likewise, external factors including low commodity prices and the subdued demand from the Angolan market as a result of low international oil prices, in part contributed to slowed activities in wholesale and retail trade sector,” Zemburuka said. He further noted that the sluggish performance of the sector translated into low sales realized by the sector and consequently, low income earned by the business operating in the wholesale and retail trade sector. Since all sectors of the economy are interdependent, this had spillover effects to other sectors of the economy.

The Villager understands that decrease decreased income of the affected businesses and their respective employees in one sector would weaken general demand for goods and services elsewhere in the economy. In diffi cult times, businesses tend to freeze the hiring of new workers or postpone activities, which would negatively impact on the level of employment in the economy The Villager learnt.

According to the Economic Outlook Update (EOU) of the BoN released in February 2017, the Bank expects the wholesale and retail trade sector to grow by 4.9% in 2017, higher than the 3.4% recorded in 2016. The Bank is currently reviewing these estimates, which are expected to be updated after the end of the fi rst half 2017. However, BoN further (EOU), states that advanced economies are now projected to grow by 1.9 percent and 2.0 percent in 2017 and 2018, respectively, from an estimated 1.6 percent in 2016.

The domestic economy is estimated to have slowed in 2016, with robust recovery over the medium term 2017/18. Real GDP growth in Namibia is estimated at 1.0 percent in 2016, down from 5.3% in 2015, and is projected to increase to 2.9% and 3.8% in 2017 and 2018, respectively.

“The 2016 growth estimate represents a downward revision by 1.5 percentage points from the estimate of 2.5 percent in November 2016. This was mainly attributed to a deeper-thanexpected contraction in sectors such as diamond mining and construction. While uranium output rebounded and a lesser contraction was registered in the agriculture sector, these developments were not strong enough to mitigate a sharp slowdown in the overall growth estimate for 2016,” Zemburuka said.