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Foreign reserves fall to lowest level since May 2017

Foreign reserves fall to lowest level since May 2017

By Gerrit van Rooyen
Analyst at Oxford Economics.

The stock of foreign exchange (forex) reserves decreased in November 2019, according to the Bank of Namibia’s (BoN, the central bank) latest Money and Banking Statistics report. The level of international reserves fell to N$29.7 billion at the end of November from N$32.4 billion recorded in the previous month.

The decline was mainly due to the net purchases of rans by commercial banks for import payments coupled with government foreign payments. Broad money supply (M2) growth, meanwhile, accelerated to 9.3% y-o-y in November 2019 from 6.7% y-o-y in the previous month.

According to the central bank, the higher M2 growth rate stemmed mainly from an increase in net foreign assets of the depository corporations. This was partly offset by growth in claims on the private sector coming in marginally lower at 6.4% y-o-y in November compared 6.6% y-o-y in the previous month. Growth in claims on businesses declined to 6.1% y-o-y in November from 6.4% y-o-y recorded in October. Also, the growth in claims on households ticked lower to 6.7% y-o-y in November from 6.8% y-o-y in October.

The growth rates of monetary and credit aggregates remain lacklustre compared to the economy’s boom period during 2010-15, 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. The level of forex reserves decreased sharply in H2 2019 due to a slump in the prices of Namibia’s key export commodities, and the increased need for food and electricity imports owing to serve drought.

Although South African customs Union (SACU) revenue increased slightly in local currency terms in 2019, it actually declined in US dollar terms due to weakness in the Namibian dollar. Nevertheless, the estimated import cover of goods and services stood at 4.3 months at the end of Q3 2019, which is above the benchmark of three months and sufficient to maintain the one-to-one exchange rate with the rand.


 

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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.