Economy grows 5% in 2012
As reported last week, Preliminary National Accounts released Wednesday by the Namibia Statistics Agency estimates that the local economy grew by 5% in 2012.
Last week The Economist quoted president of the Economic Association of Namibia, Rowland Brown saying that contrary to previous consensus, GDP growth in 2012 is likely to be above 5% due to strong growth in the primary industries. And this week, the NSA said it estimates that the local economy grew marginally from 4.9% in 2011 to 5% in the last year. The statistics agency described the growth as broad-based as all three sectors of the economy posted positive growth.
The primary sector grew by 6.5% while the secondary and tertiary sectors gained 5.9% and 6.9% respectively. Growth in the primary sector was largely driven by the mining and extraction, estimated to have expanded by 11.2% following a decline of 7.9% the previous year. The 2012 performance is mainly due to the positive performance in the Other Mining sub-sector that rebounded from a contraction of 22.1% in the previous year to a growth rate of 18.8%.
The growth recorded in the secondary sector was due to the performance of the construction sector which posted a 12.1% growth rate mainly as a result of government’s infrastructure development drive.
Growth in the tertiary sector was attributed to stronger growth in the wholesale and retail trade, and repairs. The sector grew by 12.1% last year compared to 3.3% in 2011, with financial inter-mediation also registering a strong growth of 7% attributed to a 10.4% expansion in the insurance sub-sector.
While most of the sub-sectors in the three overall sectors performed very well, the hotels and restaurant sector as well as the fishing and fish processing sector are the only sectors that contracted during 2012. The hotels and restaurant sub-sector contracted 0.6% in 2012 compared to a growth rate of 3% in 2011. The contraction was mainly due to a decline in the number of bed nights and room nights sold while the poor performance in the fishing and fish processing sub-sector was underpinned by the lower landings recorded for Demersal and Midwater fisheries.
In his analysis of the GDP figures, Namene Kalili, the Manager of Research and Competitor Intelligence at FNB Namibia attributed the 5% growth to the favourable business climate in which government is spending “a whole lot of money in the economy, interest rates are low, inflation is manageable, businesses are investing and consumer appetite is on the increase.”
Kalili said the fishing sector suffered as it battles falling fish prices, rising operational costs and volatile exchange rates. He said: “Not only is the fishing sector spending more money to catch their quota, the fish is getting harder to find. Let’s not forget that most of the Namibian fish goes to Spain, an economy that remains in economic turmoil.”