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Namibia forex reserves edge higher thanks to SACU inflows

Namibia forex reserves edge higher thanks to SACU inflows

By: Gerrit van Rooyen

Analyst at Oxford Economics.

The stock of foreign exchange (forex) reserves increased in October 2019, according to the Bank of Namibia’s (BoN, the central bank) latest Money and Banking Statistics report. The level of international reserves rose to N$32.5 billion at the end of October from N$32.3 billion recorded in the previous month, mainly due to an inflow of Southern African Customs Union (SACU) receipts as well as lower government payments during the month under review.

Broad money supply (M2) growth, meanwhile, slowed to 6.7% y-o-y in October 2019 from 8.3% y-o-y in the previous month. According to the central bank, the lower M” growth rate was reflected in the weaker claims on the private sector and the short-term deposit holdings of the household sector and local government.

Looking more closely at the determinants of money supply, growth in claims on the private sector was marginally lower at 6.6% y-o-y in October compared 6.7 y-o-y in the previous month. Growth in claims on businesses ticked lower to 6.4% y-o-y in October from 6.7% y-o-y recorded in September. Meanwhile, the growth in claims on households rose to 6.8%y-o-y in October from 6.6% y-o-y in September.

The growth rates of monetary and credit aggregates remain lacklustre compared to the economy’s boom period during 2010-2015, suggesting that the economy remains firmly in recession. We forecast that the economy will contract by 1.8% in 2019, down from -0.6% in 2018. Looking at forex reserves, we expect that reserves in US dollar terms will increase marginally on an annual basis to N$2.153 million at the end of 2019.

The level of forex reserves declined in Q3 following robust growth in H2. This followed a slump in the prices of Namibia’s key export commodities, and the increased need for food and electricity imports due to severe drought. Although SACU revenue has increased slightly in local currency terms in 2019, it has actually declined in US dollar terms due to weakness in the Namibian dollar.

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


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.