Construction sector to drive growth in 2014
Prospects for growth are higher on account of a construction boom, an IPPR overview of expected economic performance, released earlier this week, stated. The construction boom is driven by the development of new mines in particular Husab Uranium Mine, Otjikoto Gold Mine and the Tschudi copper mine, the expansion of the Walvis Bay port, the construction of the Neckertal dam, and building activities such as the Grove Mall, a mass housing project an the construction of new hotels and residential buildings.
According to the Institute for Public Policy Research (IPPR), other sectors like manufacturing, transportation and financial services will also benefit from the growth in the construction sector. A weak Namibia dollar will increase the purchasing power of overseas tourists making Namibia an attractive destination for travellers. The agricultural sector is not expected to fair as well owing to the drought experienced in 2013. Farmers are expected to re-stock and livestock marketing and meat processing are expected to take a dip.
According to the IPPR report, the deadline of 1 October 2014 for the signing of the Economic Partnership Agreement (EPA) between the SADC EPA group and the EU is approaching. Meaningful progress was made in June and November 2013 but issues regarding certain agricultural products have not been resolved. Namibia currently benefits from the duty–free access to the EU market and should there be no substantial progress with the final EPA, this would be placed at risk with the fish, meat, and grape industries bearing the brunt.
The IPPR report says Namibia received 37% of its total revenue from the SACU Common Revenue Pool during the current fiscal year. In addition to the fiscal benefits, Namibian exporters also enjoy duty free access to South African markets, an added SACU benefit. South Africa contributes about 98% of the CRP funds. of which 55% is distributed amongst SACU countries. South Africa has called for changes to the formula and a gathering is on the cards and is seen by analysts as a make or break meeting for the customs union.
2013 was not a good year for commodity exporting countries like Namibia the IPPR stated. Uranium and gold prices recovered slightly during January while other commodities weakened slightly.