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Company earnings are negative across the board. Business confidence at an all-time low

According to the latest Money & Banking statistics released on Wednesday 31 May 2017 by the Bank of Namibia, the annual growth in new credit to the private sector has fallen to 8.1% at the end of April. This continues a trend which started in 2014 and has not let up since.

The overall slowdown in credit demand is reflected in both of the two subcategories, commercial and private, although the shrinking in the latter only started the current trend in 2015, about one year after business credit began slowing down.

By the end of April, the demand for credit by businesses, has come down to an annual growth of just 7.2%. This must easily be the slowest growth since 2009. Similarly, private households only took up 8.7% more credit than a year ago. This is the slowest growth since 2014.

Measured by Credit Type, it is significant that Overdraft Credit has jumped steeply in Februrary this year, and has remained at an annual growth rate around 12.5% although this is only at the same level it was around the middle of 2015.

Looking at the broader picture, these rather disappoiting money stats show that only operational credit has improved this year. Investment credit has been on a three-year decline and seems set to continue declining. This is a clear signal of a pervasive lack of business confidence. Effectively, what the figures are telling us is that investment by the private sector has almost come to a standstill.

A feedback session by a private equity investor late in the week offered more reason for concern than for optimism. Across the board, the signals indicated restructuring, realigning, improving efficiencies, and hoping for the best. None of the presenters were prepared to venture an opinion on the economy for this year.

At most, they repeatedly said they are positioning themselves, balance sheet-wise and operationally, to be able to respond rapidly should the economy improve.

Private Sector Credit Extension, or PSCE is a strong leading indicator of expected economic growth. If the general demand for credit is so low, it indicates that the recessionary lag is only now catching up with conditions on the ground. Everywhere I talk to people, the message is the same: “We are going under.”

Under “normal” conditions, or at least those that prevailed for the 25 years prior to 2016, the Namibian economy required credit growth of around 13% to bring us to real GDP growth of around 4%. In a sense, one can say that this is the key ratio of the economy at large. When PSCE goes above it, the economy grows too fast, and when it goes below the historical 13% value, growth slows. When it is below 10% like now, it indicates a continuation of last year’s contraction.

Earlier in the week in another meeting, I was told with very precise calculations to prove the point, that one of the leading companies in agriculture has not had the required throughput to break even for the better part of a year. That is also very disconcerting since it is one of the bigger employers in Windhoek.

Similarly, in construction for instance, latest estimates put the contraction at 48%. I can not vouch for the reliability of this figure but it is corroborated by the statements coming from the Construction Industries Federation, although they do not state figures other than those furnished by their members. But if construction is down by almost half, the fallout on employment must be enormous.

Another trend that signals the dire straits in which many ordinary Namibians find themselves, is the mushrooming in crime statistics. Again, here it is difficult to get hold of reliable, up to date figures, but a number of so-called neighbourhood watches keep statistics of various crimes in their areas, and these have gone off the charts.

This has escalated to such an extent that a special meeting has been arranged by the Khomas Regional Council to talk to representatives of neighbourhood watches in the Khomas East Constituency about an adequate response from law enforcement, to try and stem the wave of crime overflowing Windhoek’s suburbs.

The motivations are simple. If people earn a sufficient income from a lawful enterprise, there is no need to revert to crime to survive. The moment crime explodes like the past few months, it shows a large part of the general population is in distress. This is very similar to events during 2009.

I do not have a clever answer for the many business owner I know personally who are considering to close shop, or have done so already. On the positive side, I believe the turning point was last year May when, for the first time, the government publicly acknowledged that we are heading for serious trouble.

Still, it took another six months to translate this into action which only happened when the 2016 national budget was extensively overhauled. Since then, it has only been hard grinding. How long it will take for the emergency measures to start making a reasonable impact on overall economic output, I do not know. There is nobody that has the answer to this question.

About The Author

Daniel Steinmann

Brief CV of Daniel Steinmann. Born 24 February 1961, Johannesburg. Educated at the University of Pretoria: BA, BA(hons), BD. Postgraduate degrees are in Philosophy and Divinity. Editor of the Namibia Economist since 1991. Daniel Steinmann has steered the Economist as editor for the past 29 years. The Economist started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at It is the first Namibian newspaper to go fully digital. Daniel Steinmann is an authority on macro-economics having established a sound record of budget analysis, strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored hundreds of journalism students as interns and as young professional jourlists. He regularly helps economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. He is frequently consulted by NGOs and international analysts on local economic trends and developments. Send comments to

Following reverse listing, public can now acquire shareholding in Paratus Namibia


20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.