Transfers from SACU will be under pressure in the short to medium term- expert
Due to the weak performance of the South African economy, transfers from the Southern African Customs Union (SACU) will be under pressure in the short to medium term, Head of Research at PSG Konsult, Eloise du Plessis said.
This comes after expectations for South Africa’s domestic growth have softened further with the South African Reserve Bank anticipating growth of 1% y-o-y in 2019 and with Namibian Sacu revenue projections based on better economic growth rates in South African, a continuous economic weakness will derail the country’s SACU revenue projects.
While the outlook ahead looks bleak, the level of international reserves increased to N$34.2 billion at the end of April from N$32.6 billion recorded in the previous month, mainly due to an increase in Sacu receipts.
Meanwhile, Du Plessis noted that export growth is expected to moderate this year due to the global economic slowdown and lower diamond production.
“On the bright side, inflows from multilateral loans will continue to buttress foreign exchange stocks this year,” Du Plessis said.