FDI inflows take a dive- down to N$1.62 billion in Q3 2018
According to the Bank of Namibia’s latest data, net foreign direct investment recorded much lower inflows of N$1.62 billion in the third quarter of 2018 compared to N$4.12 billion which was recorded during the same quarter in 2017.
This decrease was mainly due to lower reinvested earnings and reduced borrowing by foreign direct investment enterprises, the Central Bank said. Namibia’s foreign direct investment stock was mainly concentrated in the sectors of mining & quarrying (66%), financial intermediation (26%), wholesale & retail trade (3%) and manufacturing (2%).
The central bank further highlighted that China, South Africa and Mauritius accounted for over 77% of the foreign direct investment stock at the end of the third quarter of 2018.
PSG Wealth Management said that the third quarter of 2018 was also associated with a general decline in commodity prices, reduced emerging market sentiment and a slowdown in global foreign direct investment inflows, while the Namibian government also scored some own goals in this time, in terms of investor-unfriendly policies.
“While commodity prices have started to recover somewhat since 2016 and Windhoek has recently scrapped some unfavourable policies and policy proposals to lure back foreign investment, the ongoing global trade frictions will likely dampen the expected recovery in foreign direct investment in 2019,” PSG added.