2016 prospects not bleak
Namene Kalili, Senior Manager Research and Development at FNB Namibia Holdings said the 2016 economic outlook is not bleak emphasising that Namibia is doing better than most countries even when faced with a serious drought.
Looking at 2015/16 growth which was earlier projected to have slowed to just over 4%, he said the global economy was growing at only 3.6% adding that closer to home, South Africa is growing by 0.6% and Botswana 3.1%. “Our figures are lower than previous years, but those are mostly driven by factors beyond our control. High investments into roads, dams, ports and commercial property have supported the relative high growth rate in Namibia. Given the medium term nature of these investments we expect growth to remain positive although declining. Hopefully rains will return, water supply normalize and the economy can turn the corner in 2017 or 2018.”
Kalili said limited water was contributing to the economic predicament as it slowed down many of the water intensive industries such as mining and manufacturing. Weak global demand and falling commodity prices were weighing on exports, while imports were increasing, thereby detracting from economic growth. However, increased imports are temporary and should translate to additional output in the medium term.
He added that once the infrastructure spending comes to an end, imports should slow down, production should increase and economic growth accelerate. Improved water infrastructure will mitigate the negative impacts of droughts and things will start looking up again. He guided Namibians by saying that everyone should spend wisely and “support local business thereby ensuring that as much of our consumption dollars remained in the country. If there is spare cash, save, save, save! Interest rates support savings and cash is king in 2016.”