Every few months, Statistician-General Alex
Shimuafeni and the Namibia Statistics Agency release the newest quarterly GDP
figures, and we find ourselves facing a reckoning of our economic performance. With
barely any quarter of positive economic performance since the first quarter of
2016, the first quarter of 2018 was no different – the Namibian economy
contracted by 0.1%.
Let’s start our reckoning then by examining
the first quarter GDP report. Starting with inflation, in this quarter was only
3.5%, down from the 7.7% recorded during the same time in 2017. The lower
inflation was due to decreases in inflation for housing, food and beverages,
and alcohol and tobacco. Inflation has finally dropped below 5% for the first
time since 2015.
Next, let’s have a look at the different
sectors of the Namibian economy. The Agriculture and Forestry sector showed
only a 1.9% growth this year compared to 16.5% for the same time last year. With
crop farming simply easing to 10.9% growth from 15.8% compared to the prior
year, the reason for this drop becomes clear – the livestock farming subsector.
With a substantial increase in live cattle exports to South Africa (53.2%)
occurring without value addition, the subsector suffered from a huge decline in
inventory and a disinvestment in stock, resulting in growth of only 1.9%
compared to 19.3% last year. As a result, even the 37.7% increase in cattle
exports to abattoirs was offset by this decline in inventories. The Fishing
sector also found itself with a decline of 13.6% compared to growth of 5.9%
last year, mainly as a result of rising fuel costs and the effect of currency
appreciation on exports.
Mining and Quarrying, unfortunately, slowed
down during the start of the year, with growth of only 4.7% compared to 14%
during the same time last year. The highlight here was the uranium subsector,
which despite continuing low market prices, had the advantage of the Husab mine
coming into operation during this quarter, resulting in strong 56.3% growth for
the subsector. Unfortunately, the diamond subsector’s growth slowed to 4.6% due
to a smaller amount of carats produced, while zinc, lead and gold production
contracted by 6.8%, 49.8% and 1.6% respectively. In addition, marble and
granite production also decreased by 21.9% and 77.2% respectively.
The Manufacturing sector also slowed down
during the first quarter of the year, recording a contraction of 2.1% compared
to growth of 3.9% during the same time last year. This is the results of a
26.7% decline in value added in the non-metallic minerals subsector, as well as
a decline of 12.8% in the non-ferrous metals subsector. Other subsectors, such
as leather products, meat processing and beverages recorded growths of 22.5%,
11.2% and 6.9% respectively. The Electricity and Water sector also felt the
effects of muted economic growth, growing by only 1.9%. This is due to the
electricity subsector contracting by 5.9%, compared to growth of 24.8% last
year. The main reason for this is the surge of electricity imports from South
Africa, that increased by 48.8%, while the total units sold only increased by
2.1%.
But for the first time in 8 consecutive
quarters, the Construction sector has recorded positive growth! And quite
strong growth as well – 23.7%! This strong growth is the results of government
expenditure on construction that grew by 36.6%, and the value of buildings
completed increasing by 104.5% compared to last year. This increase in the
value of buildings completed is mainly noted to be in the central region, where
growth was 229.5%, but the western and southern regions also had a strong
showing of 60.4% and 4% respectively.
Wholesale and retail trade, however, continued
to feel the effect of negative economic headwinds, contracting by 1.3% during
the first quarter, though it is up from the 6.3% contraction recorded last
year. It’s in particular the vehicle subsector that bear the heaviest burden
here, with a contractions of 22.4% compared to a contraction of 16.6% last
year. Yet there are signs of recovery, with supermarkets, clothing and wholesalers
performing quite well, recording growth of 9.6%, 2.6% and 3.6% respectively. Hotels
and Restaurants, conversely, found itself with reversing fortunes, as it
recorded a decline of 5.3% this quarter compared to growth of 3.3% last year.
The Transport and Communication sector at
least remained in positive territory, with growth of 2.5% compared to last
year’s 1% growth. The Financial Intermediation sector continued its constant
growth, growing with 1.4% compared to last year’s 1.8%, with the banking
subsector contributing 0.9% growth and the insurance subsector contributing 2.1%.
Finally, the Public Administration, Defence, Education and Health sectors still
shows the effect of government consolidation, with Public Administration and
Defence contracting by 2.9%, with Education contracting by 4% and Health by 6.4%.
They say you cannot disown what is yours.
Flung out, there is always the return, the reckoning, the revenge, and perhaps
the reconciliation. And only your wounds will take you there. Well, this is our
economy. We cannot claim that it is not by our doing that it is the way it is,
and we need to reconcile ourselves with that fact. This is our day of
reckoning, when our unsettled scores demand retribution, and our transgressions
are finally laid bare. Our economic wounds are open for the world to see, and
only by working together can we fix what we’ve clearly broken. We need to stop
licking our wounds, and start dressing it, so that we can heal from our
economic malaise, and finally move forward.
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