…as Geingob boasts that the Namibian economy is one of the best managed in Africa
While President Hage Geingob was busy telling people in the United States of America that the Namibian economy is one of the best managed economies in Africa on Wednesday, back home Statistician General Alex Shimuafeni announced that the local economy stalled in the second quarter of the year.
On the same day Shimuafeni announced in a statement that the Namibian economy recorded an estimated decline of 1.2 percent in the second quarter of 2016, compared to the 7 percent growth registered in the corresponding quarter in 2015. “The negative growth is mainly attributed to the declines in real value added recorded in the following sectors: Construction, Hotels and Restaurants and Mining and Quarrying,” said Shimuafeni. Shimuafeni added that: “The poor performance in the construction sector is attributed to the value of buildings completed that recorded a decline of 42,7 percent in real value added in the quarter under review compared to the strong growth of 103 percent recorded in the corresponding quarter of 2015.” The agriculture and forestry sectors also recorded a decline of 5.2 during the quarter under review. “This however shows improvement in the sector when compared to the same quarter of 2015 that recorded a decline of 18.6 percent.” Apart from the electricity and water sector, NSA said most sectors recorded slow growth and declines.
The electricity and water sector, on the other hand, recorded a strong growth of 25.7 per cent in real value added, compared to a 13.9 per cent growth recorded in the same quarter of 2015. The strong performance is mainly attributed to the electricity sub-sector that recorded a strong growth of 32.9 per cent compared to the 16.9 per cent recorded in the corresponding quarter of 2015, he said. “This is accredited to the sales of electricity of 22.6 per cent in the period under review and stood at 588 934 Kilowatts per hour (KWH); while imports of electricity recorded a decline of 3.9 per cent during the same quarter,” Shimuafeni said. As for the water sub-sector recorded a decline of 0.8 per cent in real value added during the second quarter of 2016 in comparison to the 4.0 per cent that was recorded during the corresponding quarter of 2015. The decrease is mainly attributed to the decline of 4.3 per cent recorded in water for human consumption during the second quarter of 2016.
“Supported by prudent fiscal and monetary policy, Namibia’s budget deficits have been contained within sustainable levels, translating into Namibia having one of the lowest debt levels in the world as expressed as a ratio of GDP. To put this into perspective, following expansionary monetary policy, to stimulate economic activities Namibia’s debt to GDP is projected to escalate to 39 percent this year,” he said. Geingob promotes Namibia Geingob in a speech delivered at the John F. Kennedy Jr. Forum at the Harvard University, told attendees that the Namibian economy might be small, but it is one of the best-managed economies on the African continent. Geingob went on to say: “As students of this prestigious university, you will know that it is very rare to have a debt to GDP ratio of less than 60 percent these days. Moreover, the bulk of Namibia’s debt is denominated in domestic currency.”
Further supporting Namibia’s macro-economic architecture is a sound financial system and a strong savings culture, he said. Geingob also informed those in attendance that: “The World Economic Forum rates the strength of the Namibian banking system as number 22 in the world. Namibia’s pension savings expressed as a ratio to GDP is among the highest in the world, and exceeds that of many OECD countries.” He is confident that the long-term outlook for Namibia remains good. “Key economic fundamentals, including fiscal sustainability and sustainability of the external current account remains intact. Testament to this is the fact that the Fitch rating agency recently reaffirmed Namibia’s International Default Rate at BBB-, and bond issuance in the South African and Namibian market at AA+, although the longer-term outlook was revised from stable to negative, in line with the global economic outlook,” he said. During his speech, he assured those in attendance that the Government of Namibia remains committed to managing the economy in a prudent and responsible manner, and has already instituted, expenditure, revenue and structural reform measures to address concerns raised by rating agencies about the medium-term outlook of Namibia.