Trade deficit narrows month-on-month
The trade deficit in June stood at N$0.2b compared to N$1.2b the previous month, which had translated into an 86% decrease, given the recent Namibia Statistics Agency (NSA) trade statistics.
Expenditure on imports declined by 18.9% compared to the previous month. Compared to the same month of the preceding year, imports declined by 21.7%. Export earnings, on the other hand, showed a slight increase of 1% in June compared to May’s 17.6 % in the corresponding month of the preceding year. Therefore, a decrease in imports contributed to the narrowing deficit in June compared to the previous month.
Director of economic statistics, Ndamona Kali notes although the trade deficit got smaller, the objective is still far to be reached. In her view, Namibia’s dependency to imported goods, especially from South Africa, keeps deepening its deficit as it does not increase its exports to other countries.
Namibia only experienced a surplus in October last year where earnings on export were higher than imports. The main export destinations for Namibia are therefore; Botswana at 25.8%, SA at 15%, Switzerland, Angola, China, the United Arab Emirates (UAE) and the Export Processing Zone (EPZ) at varying percentages.
Namibia’s total exports during the period under review amounted to N$4.1b while imports amounted to N$4.3b, with major exported commodities being precious stones, fish, ores and vehicles. The major imports in June were vehicles, precious stones, boilers and electrical machinery.
Road transportation was one of the major modes of transportation accounting for 77.9% of total imports transported in June this year from 67.0% in May and 57.2% recorded in the corresponding month of the preceding year.
Sea transportation only accounted for 11.8% of total imports transported in the period under review while air transportation accounted for 9.2% of total imports transported in June from 3.9% the previous month and 7.8% in the corresponding period of 2012.
According to NSA’s gross domestic product (GDP) report, the second quarter of this year has seen transport and communication sectors record a decline of 2.5% in real value added during the second quarter of the year compared to an increase of 8.1% registered in the same quarter last year.
Additionally, air transport, port services, travel agency and tour operators’ sub-sector registered declines of 25.1%, 18.0% and 16.8%, respectively. The slow growth in the port services is depicted in cargo handled.
However, telecommunication, freight by road and transport via railway sub-sectors recorded growths during this period in real value added of 5.5%, 9.1% and 6.7%, respectively.
Various sectors, such as hotels and restaurants, construction, mining and quarrying had weak performances under the second quarter. They recorded declines, which caused the snail-pace growth of the GDP to just 2.3%.
The hotels and restaurant sector is, however, expected to pick up in the next few months leading to year-end due the three international conferences yet to be hosted in the country, such as the United Nations Convention to Combat Desertification’s eleventh Conference of the Parties (UNCCD COP 11), the Adventure Travel World Summit (ATWS) and the International Conference on Water Re-use.
The statistician-general, Dr John Steytler is of the opinion such growth will unfortunately never get the country to the targeted 6% growth of the Fourth National Development Plan (NDP 4).
“Such growth is not tangible, as it does not produce jobs or change people’s lives,” he stresses.
Performing sectors included agriculture, which had a robust growth of 42.3% within the period under review compared to a growth of 10% in the corresponding quarter of 2012. The growth was attributed to the livestock sub-sector, which had increased by 138.4% and 17.1%, respectively.
Notably, this increase is due to the ongoing drought, which has forced local farmers to sell off their livestock to avoid losses.