Select Page

Manufacturing sector third worst performer during 2020 – Economist

Manufacturing sector third worst performer during 2020 – Economist

The manufacturing sector took a nosedive in 2020, with the sector declining by 19.6%, compounded by the decline in the demand for manufacturing products as incomes in the economy became constrained in the face of the Covid-19 pandemic.

As a result, output in this sector declined by 19.6% compared to a growth of 4.3% seen in 2019. This contraction makes manufacturing the third worst performing sector during 2020 after hotels and restaurants which contracted by 33.1% and transport and storage which contracted by 22.4%.

FirstRand Namibia Economist, Ruusa Nandago said given that this sector contributes 11% to GDP, this had a material impact on overall economic performance.

Nandago explained the significant decline in the manufacturing sector spills over from the decline in the mining sector.

“Declines in diamond production because of lockdowns and a slowdown in commodity prices had an impact on the diamond processing sub sector of manufacturing which fell by 14.1%,” she said.

Similarly, metals processing declined by 46.8% while the lingering effects of the 2019 drought also compounded this decline as meat processing declined by 40.8%

“This was mainly a result of farmers rebuilding their livestock herds and thus reducing the supply of meat to be slaughtered. Lastly, alcohol bans and reduced alcohol sales both in Namibia and South Africa resulted in reduced beverage production which declined by 36.5%,” Nandango added.

Looking ahead, output in this sector is expected to recover from the levels seen during 2020 in the absence of severe lockdown measures.

“Total output is, however, expected to remain below pre-pandemic levels owing to reduced demand in the economy, the closure of some smaller manufacturing companies and restrictions on alcohol sales because of curfews,” she said.


About The Author

Donald Matthys

Donald Matthys has been part of the media fraternity since 2015. He has been working at the Namibia Economist for the past three years mainly covering business, tourism and agriculture. Donald occasionally refers to himself as a theatre maker and has staged two theatre plays so far. Follow him on twitter at @zuleitmatthys