Africa-Press – Namibia. THE Bank of Namibia (BoN) has predicted that the local economy would perform better next year.
Many people would, however, still probably be unemployed, the price of fuel would still be exorbitant, and food prices would continue to rise. This growth, the bank said, would come from expected good rains that would boost agriculture, and an increase in mineral prices. As minerals prices increase, the country’s bottom line would also edge up in value, it said.
In its recently released economic outlook for December 2021, the central bank said for this year, Namibia’s economic activities were worth around N$183 billion at market prices.
Next year, all activities, when pooled together, should at least tally up to N$197 billion, and N$212 billion in 2023. Positive economic outlooks boost investments, which is exactly what the country currently needs.
According to the outlook, the N$183 billion is expected to be the value of all goods and services produced by the country this year, which is 1,5% more than last year.
The economy’s output was last year only N$174 billion, and because of this low base any sudden increase in value would look like growth, although there has been none.
“The Namibian economy is expected to recover moderately during 2021 and to improve further during 2022, supported by better growth for the mining industry and most tertiary industries,” the outlook reads.
The central bank further says the domestic economy is projected to grow by 1,5% and 3,3% in 2021 and 2022, respectively, representing an improvement on an 8,5% contraction in 2020.
The projected improvements are mainly due to base effects and better growth prospects for the mining industry and most of the industries in the tertiary sector, the bank says.
Sectors identified to lead growth include agriculture, forestry, and fishing, which is predicted to grow by 3,5% next year. Mining and quarrying are expected to be at 10,3%, mainly led by diamond mining, which is expected to grow by about 17,2%.
Manufacturing is expected to grow by 2,8%, while construction is finally expected to limp out of the ditch and register a 2,6% growth. The BoN predicts that the retail sector would not sell as much next year, predicting a 2,8% increase, which is far less than the 4,7% projected for this year.
Hotels and restaurants are still expected to be on the rough edge of the economy, posted to register a growth of only 2,8% next year, while transport and storage would edge up to 3,7% next year out of a negative 3,6% it was projected to bear this year.
Information and communication are expected to register a 6,4% growth next year, while financial services will be on the recovery path at 3,1%. Real estate is projected to grow by 4% next year, and private households with employed persons are predicted to grow by 2%, up from a 0,9% contraction anticipated for this year.
Only the public administration and defence, as well as manufacturing sectors are expected to contract next year – all below 2%. Despite these expectations, the central bank says risks to domestic growth remain dominated by the impact of the Covid-19 pandemic.
“Risks to domestic growth are dominated by travel restrictions that are still in place for many countries, exacerbated by new waves of coronavirus infections, vaccine hesitancy, and the pace of vaccinations in Namibia,” the bank says.
The latest Covid-19 variant, known as Omicron, has led to tighter travel restrictions, especially affecting southern African countries. Further waves have been reported in China and Europe, which are some of Namibia’s major trading partners, and which could pose a risk to local recovery.
Other notable risks to the domestic growth outlook include low international prices for some of Namibia’s export commodities, such as uranium, the BoN says. The full economic outlook is available on the bank’s website.
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