Fuel imports burn away current account surplus
After a single quarter of being in surplus, Namibia recorded a substantial current account deficit to N$3.1 billion during the second quarter of 2019, the widest deficit since 2016, the Bank of Namibia reported.
The central bank attributes this to higher payments towards transportation as well as maintenance and repair services. The goods trade deficit widened to N$6.2 billion in the quarter under review from N$4 billion in the same quarter of 2018 largely due to a very sharp jump in fuel imports (+120%) and a significant increase in consumer goods imports (+16%) over this period.
According to Eloise du Plessis, PSG Namibia’s Head of Research, the value of fuel imports increased in part due to a rise in fuel consumption that stemmed from higher electricity production at the Anixas diesel run power plant.
“This emergency diesel power station had to be used owing to poor rainfall adversely affecting the Ruacana hydropower station’s electricity generation. Furthermore, the cost of fuel imports also increased due to currency weakness,” Du Plessis said.