Africa > Southern Africa > Namibia > Namibia Outlook for 2013-17

Namibia: Namibia Outlook for 2013-17

2013/10/09

The country (Namibia) is situated in Southern Africa, bordering the South Atlantic Ocean, between Angola and South Africa. Namibia has borders with Angola for 1376km, Botswana for 1360km, South Africa for 967km and Zambia for 233km.Land in Namibia is mostly high plateau; Namib Desert along coast; Kalahari Desert in east. Namibian land covers an area of 825418 Km².

The climate is desert, hot, dry, rainfall sparse and erratic.
Namibian speak English 7% (official), Afrikaans common language of most of the people and about 60% of the white people, German 32%, indigenous languages (Oshivambo, Herero, Nama).

Overview

The South West Africa people's Organisation (SWAPO), which has governed Namibia since the country gained independence in 1990, will dominate the political scene throughout the estimate period. Political stability is likely to be maintained regardless of who becomes SWAPO's candidate for the 2014 presidential election (and thus who succeeds Hifikepunye Pohamba as president), although prospects for policy continuity are less certain. The fiscal deficit is estimate to narrow to an average of 4.3% of GDP in 2012/13-2014/15, as public spending is restrained to prevent fiscal indicators from breaching official targets. A modest surplus is expected in 2017/18. Real GDP increase is estimate to pick up from 4.6% in 2013 to an average of 5.6% in 2014-16 before moderating to 4.9% in 2017, driven by trends in the mining sector.


Political outlook


The current vice-president, Hage Geingob, has not from now on widened his political base enough to be assured of victory in the contest to become SWAPO's next presidential candidate, but remains the front-runner for the post.
Economic policy outlook
The central bank followed the lead of its South African counterpart and cut its repurchase rate by 50 basis points to 5.5% in August as world economic uncertainty, slower increase in China and lower commodity prices continued to weigh on Namibia's economic performance.


Economic forecast

Real GDP increase forecasts have been revised from 5.5% to 5.1% for 2014 and from 6.1% to 6.4% for 2015 following a agreement by Areva, a French company, to put its Trekkopje uranium project on hold, largely owing to low uranium prices. Production at the mine was before expected to begin in 2014. We now expect it to start in 2015 as the uranium market is estimate to tighten over the next three years, leading to some recovery in prices and supporting the viability of the project.
The current-account estimate for 2014 has been revised, with a small deficit now expected instead of a modest surplus, as uranium production at Trekkopje is no longer expected in 2014.

 

Outlook for 2013-17


The South West Africa people's Organisation (SWAPO), which has governed Namibia since the country gained independence in 1990, will dominate the political scene throughout the estimate period.
Political stability is likely to be maintained regardless of who becomes SWAPO's candidate for the 2014 presidential election (and thus who succeeds Hifikepunye Pohamba), but prospects for policy continuity are less certain.
The fiscal deficit is estimate to narrow to an average of 4.3% of GDP in 2012/13-2014/15, and to turn into a modest surplus in 2017/18, as public spending is restrained to prevent fiscal indicators from breaching official targets.
Real GDP increase is estimate to pick up from 4.6% in 2013 to an average of 5.6% in 2014-16, before moderating to 4.9% in 2017, driven by trends in the mining sector.
Inflation is estimate to moderate to an average of 4.8% in 2013-14, before edging up into the 5-5.6% range in 2015-17 driven by commodity prices and inflationary trends in South Africa-the source of most of Namibia's imports.
Modest deficits are expected on the current account in 2013 and 2014 as investment in the new mines boosts imports of capital goods, although rapid export increase is expected to tip the current account into surplus from 2015.


Review

 

  • This is still no clear frontrunner to be named SWAPO's next presidential candidate (and accordingly to succeed Mr Pohamba as Namibia's next president) at the ruling party's congress, due to begin in late November.
  • In early October Mr Pohamba helped broker a compromise wage settlement between unions and the management of the national-owned transport parastatal, TransNamib, which narrowly averted a nationwide transport strike.
  • The central bank followed the lead of its South African counterpart and cut its repurchase rate to 5.5% in August as world economic uncertainty and lower commodity prices continued to weigh on Namibia's economic performance.
  • France's Areva has decided to delay the commissioning of its Trekkopje mine until uranium prices recover, and the new Chinese owners of the Husab uranium project have committed to developing a large mine by 2015.
  • New official figures have put unemployment at 34%, compared with the previous estimate of 51%, which had been largely discredited.
  • Inflationary trends have diverged from those in South Africa over the past month, driven by a sharp rise in world maize and wheat prices, which pushed Namibia's inflation up to 6.7% in September.
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