Bank of Namibia(BoN) declared its 2015 dividends to government yesterday, signaling a N$82 million decline compared to 2014, a situation blamed squarely on volatile capital and money markets. The figure was revealed yesterday when BoN declared dividends of N$76.5 million to the State at the launch of the banking institution annual report for the year 2015. In 2014 the bank declared dividends of N$158.1 million to the State. “The Bank recorded weaker financial performance in 2015, compared to the previous financial year. This is mainly due to the uncertain and volatile global capital and money markets where the bank derives its investment returns,” said BoN Deputy Governor Ebson Uanguta. The Bank further announced that due to the weak global economic growth, the local economy also slowed down in 2015. “Growth in the Namibian economy slowed in 2015, driven mostly by the decline in agriculture activities, lower commodity prices, as well as, slower growth in wholesale and retail trade and construction activities,” Uanguta said.
Uanguta also attributed the slow growth to the foot and mouth disease that prevailed for most of last year, adding that the situation exerted pressure on growth in the agricultural sector. Other areas that similarly recorded slow growth were the construction, wholesale and retail and transport sectors. Inflation rates averaged around 3.4 percent in 2015, lower than 5.4 percent in 2014. The decrease was as a result of inflation rates of housing, water, electricity, gas and other fuels, which are the largest contributor as per the rebased National Consumer Price Index.
The report further states that the Namibia Dollar appreciated against the Euro, on average, but depreciated against the US Dollar and Pound during 2015. This was primarily due to commodity prices and recovery of the US economy. As for the local banking institutions, the industry’s total net income increased by N$1.3 billion from N$6.4 billion in 2014 to N$7.7 billion in 2015. After tax profits also saw a huge increase of N$600 million.
The tax profits increased from N$1.9 billion in 2014 to N$2.5 billion last year. Another positive indicator in the banking industry was the increase of permanent personnel. The total number of personnel employed by the banking industry was 5899 at the end of last year, compared to 5422 in 2014. The country at large recorded a positive external balance during 2015, due to significant inflows in the capital and financial account, despite the widened current account deficit. The capital and financial account surplus was mainly due to the Eurobond issuance during the reporting period. The current account deficit on the other hand was attributed to the persistent strong increase in the value of imports relative to export receipts. The lengthy document on the bank’s operation during the year 2015 sums up that the banking sector recorded persistent growth in assets and earnings with adequate capital and liquidity levels. “What we want to see as a bank is strong growth for it is good for investments,” said the deputy governor. Receiving the declared dividends was Deputy Permanent Secretary of the Ministry of Finance Titus Ndove who praised the banking institution for holding up to its mandate. “We are very happy with the bank and the bank remains to be exemplary as one of the state-owned entities,” said Ndove.