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Local economist expects growth to stall again in 2020

Local economist expects growth to stall again in 2020

The Namibian economic situation remains concerning, a young economist told his audience at the recent Stanlib annual Asset Management Roadshow hosted in Windhoek and at the coast.

Rowland Brown of Cirrus Capital said “Over the past two years the economy has not expanded and we have very low growth and real stagnation, especially with regards to unemployment. One in three willing and able-bodied Namibians are unemployed and one in two youngsters do not have work and to me this is a crisis.”

“The Namibian Government is in an extremely difficult situation as the income forecast was far below than what they thought. Government debt has ballooned from N$16 billion in 2010 and is forecast to be N$100 billion in 2020,” he said.

Brown continued, “We are spending more than what we are earning and this is very unhealthy and not sustainable. Further, several considerations have also raised red flags with potential investors – both local and international – and make them think twice about investing in Namibia. These include NEEF, NIPA, tax changes, expropriation, rent control, rising populism and socialism with a Namibian flavour. While we actually forecast a very low growth this year – around 1.2% – we also forecast that growth will drop to half a percent by 2020 again.”

Stanlib Namibia’s Managing Director, Taimi Shejavali confirmed the gloomy outlook, saying that based on discussions with many financial advisors and brokers, it came to the fore that some of the biggest challenges currently faced by advisors and brokers are that of managing the low returns on client investments and the requirement to generate positive real returns while avoiding an erosion of capital.

“As an industry and a business, we have seen a significant shift of new investments as well as existing assets into cash and low risk fixed interest assets and funds. While we know that in the current market cycle it has reflected well in terms of clients’ returns compared to traditional Balanced funds, we all agree that clients have to be invested in growth assets over the long term to meet their long terms savings requirements,” she said.

Another presenter, Melanie Verwoerd, gave guests an update and her views and insights on the political landscape of southern Africa, especially in light of the upcoming May elections in South Africa. She is of the opinion that the ANC will win the elections, although margin predictions are very difficult, and that Cyril Ramaphosa will remain President.

“When Ramaphosa and the ANC remain in power, I believe that he might cut back on the public sector wage bill, sort out Eskom very quickly with unbundling, reduce the cabinet and keep fighting corruption – all great indicators for a better South Africa. I also believe that expropriation of land without compensation will not happen. I am confident about the future with President Ramaphosa at the helm, as he is anti-corruption, has a totally different energy and understands markets, economy and business,” she said.

As last speaker Sylvester Kobo highlighted the key points which could impact the Fixed Interest market and linked these points back to the Stanlib outlook for Fixed Interest this year and specifically the Standard Bank Namibia Income Fund.

“We have consistently positioned our Fixed Interest business and more specifically our SBN Income Fund as a possible solution to consider for inclusion in our clients investment portfolios, as firstly a good alternative to cash as well as a diversifier to reduce the risk within our clients’ portfolios.” The return on the SBN Income Fund is at approximately 9.4% (on par with the MSCI Emerging Equities) at a significantly lower risk level.


Caption: Local presenter at the Stanlib Asset Management Roadshow, Rowland Brown (centre left) and the Stanlib Managing Director, Taimi Shejavali (centre right) with Sylvester Kobo, Portfolio Manager of Fixed Income Funds, Abri Blaauw, the acting Head of Distribution at Stanlib Namibia, Patrick Mamathuba, Executive Stanlib Africa and Melanie Verwoerd, an independent South African analyst.


 

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The Staff Reporter

The staff reporter is the most senior in-house Economist reporter. This designation is frequently used by the editor for articles submitted by third parties, especially businesses, but which had to be rewritten completely. - Ed.

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

Promotion

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.