Retail sector expects robust year
The Namibian wholesale and retail sector is expected to grow between 9.0 and 10.1% this year, up from 8.8% in 2011. The growth will be fuelled by an increase in the demand for goods from this sector, says Jacob Nyambe, an economist and lecturer at the University of Namibia.
“Consumers will likely continue to demand more goods emanating from this sector. Some difficulties lay in the exogenous component. This entails volatility of the global oil price. However, the sector and the economy at large will remain buoyant given the conducive domestic environment,” Nyambe told the Economist recently.
He added that continued increase in the fuel price could negatively impact the sector as it imports most of its supplies. However, once the fuel price decreases, it will have a sobering effect on vehicle retail which can benefit from the derived demand, Nyambe said.
“As pressure to roll-out the Targeted Intervention Programme for Employment and Economic Growth (TIPEEG) mounts, more wholesalers and retailers will benefit from this expansionary budgetary expenditure due to sector linkages that relates to material acquisition. Domestically, increasing consumer income stemming from civil servants’ salary increments will fuel growth of this sector in 2012.
“Again on the domestic factor environment, low interest will help in pushing consumer spending which has an added effect on the wholesale and retail sector. The silent consumer demand from neighbouring countries, especially Angola, should not be underestimated given the presence of consumers from that country coming to buy large stocks of goods. This will also contribute to the aggregate consumer demand that would most likely drive the demand for wholesale and retail goods,” explained Nyambe.
The wholesale and retail sector employed 17 779 people during the first half of 2011. This number could now stand at 18 000 people, as 600 new jobs were created in the second half of 2011. These jobs were shared between the wholesale and retail sector, as well as manufacturing industries.
The wholesale and retail sector is the second largest sector in the Namibian economy and contributed 11.9% to GDP in 2010.
“The sector’s real value added rose by 7.9% in 2010, slightly up from 3.1% the previous year. Preliminary quarterly data from the Central Bureau of Statistics suggests this sector has grown robustly during all three quarters in 2011,” says JD van Wyk, head of research at Investment House Namibia (IHN).
He says the retail sector has been impacted by the global recession during 2008/2009 – recording the lowest growth rates during these two years over the past 10 years. This slowdown in retail and wholesale growth was also reflected by the slowdown in instalment credit and vehicle sales, says van Wyk.
However, since January 2010, instalment credit growth and vehicle sales both accelerated.
“With interest rates at all-time lows, double digit instalment credit growth and food inflation rising, we expect real retail and wholesale sales growth to continue its momentum during 2012. Overall, we expect growth in this sector to support real GDP growth in 2012/13. The sector is projected to expand by 10.1% and 10.9% in 2012 and 2013,” van Wyk concluded.