Economic slump could finally end in 2022
Namibia’s prospects look more positive as growth is expected to recover on the back of new mining activities as well as the expansion of domestic port handling, railroad, mobile network, and power generation capacities.
This is according to economic analysts who are of the opinion that the industrial sector is set to benefit from planned expansions of existing diamond, gold, and tin mining operations; the possible resuscitation of mothballed zinc, copper, and uranium mines; and the development of new ‘battery mineral’ mines.
“The government is also aiming to leverage the country’s excellent solar power and green hydrogen potential,” PSG Namibia’s research analyst, Shelly Louw said.
The agricultural sector, however, Louw notes, will continue to be burdened by depleted livestock numbers that will take years to rebuild following successive years of drought.
“Moreover, the livestock industry suffered further blows last year with the detection of a new strain of the foot-and-mouth disease and devastating veld fires. While rainfall has generally improved over the past two years, crop and livestock production remains vulnerable to irregular downpours,” she added.
Louw further said the services sector will continue to be hamstrung by frugal fiscal expenditure, deteriorating real disposable incomes, higher unemployment, and high consumer indebtedness.
She added that the tourism sector already lagged ahead of the pandemic due to poor regional growth and has suffered immensely due to coronavirus-related travel restrictions.
However, there is the expectation that tourism will recover gradually to pre-pandemic levels by 2024.
“Increased vaccinations in 2022 should lead to reduced travel restrictions and a gradual recovery to pre-pandemic levels of travel and tourism,” Louw added.
PSG expects GDP growth of 4.2% in 2022, after an expected contraction of 0.6% in 2021.
