Last week, we took the data presented to us
by Statistician-General Alex Shimuafeni and the Namibia Statistics Agency and
examined our neighbours and our trade partners. Now the time has come to hold
ourselves accountable. During the last week, the NSA has also released the
Preliminary National Accounts, and the picture does not look rosy. With the
data from trade and balance of payments collated, and the data from private and
government sources added up, the results were clear. Namibia had experienced an
economic contraction of 0.8% during 2017.
I’m sure this news surprised no-one. It merely
confirmed what we already knew having informally surveyed the economy over the
past year – but the National Accounts serve a different purpose. It allows us,
though the data, to see exactly where we suffered most, and gives us insight
into possible avenues of turning our economy around. So, to start off, let’s
examine inflation first.
Inflation peaked during 2016 at 6.7%, and
remained elevated during most of 2017 until it started tapering down during the
latter part of the year. As a result, inflation for 2017 only averaged 6.1%,
with the main contributors to lower inflation being food and alcohol (5.6%),
tobacco (4.6%), clothing and footwear (-0.4%), furnishing and other household
expenses (4.6%), health costs (5.7%) and recreation and culture (4.1%).
Next, we’ll take a look at the different
economic sectors before taking an overall view. The Agriculture and Forestry
sector is a highlight for 2017, as it managed strong growth of 12.7% compared
to 1.8% in 2016. This is as a result of good rainfall, which saw an increase in
crop farming (and in cereal production specifically) and resulted in the crop
farming subsector posting 11.4% growth. Livestock farming also didn’t
disappoint, with growth of 13.7%, given better export prices for livestock
during the year. The Fishing sector,
however, did not do as well, recording a growth of only 1.3%, down from growth
of 9.1% during 2016. This is attributed to the 10.9% decline in demersal
landing, in stark contrast to its 27.2% growth in 2016.
Mining and Quarrying, fortunately, also showed
strong growth of 12.8% during 2017, compared with its 5.8% contraction in 2016.
In particular, the diamond subsector grew by 12%, due to an increase in carats
produced, while the metal ore subsector grew by 9.9% off the back of zinc
production that spiked to 25.3%. The uranium subsector is still struggling, off
the back of weak demand and low market prices, but 4 the subsector didn’t
contract. Rather, it posted strong growth of 23.4% due to increased production
as a result of new mines that came online during the year. The other subsectors
also registered growth of 4.3% in 2017 compared to a contraction of 19.8% in
2016, due to granite and marble production that increased by 113.4% and 36%
respectively.
The Manufacturing sector, however, only
recorded growth of 1.4% in 2017 compared to 5.2% in 2016. With the meat
processing, food processing and textiles subsectors declining by 14.4%, 4.6%
and 3.2%, and diamond processing recording slower growth of 14.6% compared to
85% as in 2016, it was up to the grain mill, leather, and non-ferrous metal
subsectors to enable positive growth, each growing by 16.3%, 10.3% and 4.8%
respectively. The Electricity and Water
sector also felt the effects of muted economic growth, with electricity growing
only by 4.2% and water down by 7.4%. The sector’s overall growth of 1.8% is due
to an increase in intermediate electricity consumption, resulting in large
power imports.
The Construction sector continues its slide
downwards, having recorded a contraction of 25.6% in 2017, compared to its
similar decline of 26.3% in 2016. This is mostly as a result of government
construction reducing by 29%, and the completion of mining construction
projects, which also reduced by 64.4%. There does appear to be at least some
signs of stabilization, with the value of buildings completed increasing by 35.5%
in 2017 from a 25.5% reduction in 2016.
Wholesale and retail trade continues to
feel the effect of negative economic headwinds, contracting by 7.1% in 2017,
compared to growth of 2.7% in 2016. It’s in particular the vehicle and
furniture subsectors that bear the heaviest burden here, with contractions of
24.5% and 3% respectively. Hotels and Restaurants also found itself with
reversing fortunes, as it recorded a decline of 2% in 2017 compared with 2016’s
growth of 3.2%.
The Transport and Communication sector at
least remained in positive territory, with growth of 0.8% compared to 2016’s 7%
growth. The Financial Intermediation sector continued its constant growth, again
growing with 2.8%, with the banking subsector contributing 2% growth and the
insurance subsector contributing 4.1%. Real Estate and Business services showed
growth of 2.4% compared to 2.7% in 2016, and finally, the Public Administration,
Defence, Education and Health sectors still shows the effect of government
consolidation, with Public Administration and Defence showing growth of 0.3%,
but Education contracting by 1.2% and Health by 1.3%
As Lewis Carrol so aptly put it, “The time has
come," the Walrus said, “To talk of many things.” We can no longer deny
the truth that is the precarious situation we as Namibians find ourselves in.
We can see where the holes in our economy are, and we know we have to patch
them. But unlike the oysters in Carrol’s poem, we should not sit around and
talk of many things, for then we shall be devoured as surely as those oysters.
The time of talking is clearly over for the Namibian Economy. The time of doing
should start now.
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