Deputy Reserve Bank Governor Ebson Uanguta has conﬁrmed that Angola has managed to pay its debt to Namibia timely and is now left with an outstanding ﬁgure of US$204 million.
The latest payments from Angola have also signiﬁcantly added to the reserve stock which currently stands at an all-time high of N$32.7 billion. This stock represents an annual increase both on a monthly and yearly basis and is estimated to cover 5.5 months of imports of goods and services.
“It thereby remains sufﬁcient to sustain the currency peg between the Namibia Dollar and the South African Rand,” he said. Speaking to members of the fourth estate at the release of the monetary policy statement, the Deputy Governor said Angola is now left with four payments to be made in instalments of US$51 million.
These will be routinely made from the 26th of September, 26th of December, 26th of March 2018 with the ﬁnal payment being made on the 25th of June 2018.
The rise in reserves further augurs well with the slowdown in the uptake of private sector credit which stood at 8.5% on average in 2017, lower than the 12.5% recorded over a six-month period of 2016. The BoN submits that the slowdown in credit extension was due “to the reduced growth in credit advanced to both the household and corporate sectors, especially in the form of mortgage and instalment credit.”
The weak growth in credit extended has also been credited to the general weakness in the overall economy. Meanwhile, Uanguta, despite the latest downgrade, has lauded the falling inﬂation, improvement in reserves and steady ﬁscal consolidation as tilting in favour of the local economy which has suffered a severe contraction.
The Central Bank projects inﬂation to settle at 6.2% on average with GDP standing at 2% at the end of this ﬁnancial year. The economy has not been performing well in the ﬁrst six months of 2017 which reﬂected weak growth in construction, manufacturing, wholesale and retail trade as well as transport sectors.
“There were, however, over the same period a few pockets of improvement in sectors such as mining and communication as well as livestock marketed, that has provided some stimulus to the real economy,” said Uanguta. The monetary policy committee of the Bank of Namibia has also cut the Repo Rate by 25 basis points to 6.75%.
The bank took this decision to support domestic economic growth while maintaining the one on one link between the Namibian dollar and the South African Rand.
The move follows the South Africa Reserve Bank which cut its repo rate last month, and local analysts who spoke to The Villager had predicted the BoN to do likewise. On the global stage, although the world economy is projected to grow by 3.5% which is a slight increase from last year’s 3.2%, the current nuclear crisis between the U.S and North Korea continue to be closely watched back home.
“Downside risks to the 2017 global growth outlook remain and include the inward-oriented shift in policies, which may reduce trade and cross-border investment ﬂows and the increasing geopolitical tension around North Korea,” said Uanguta.