Namibia records improved economic activity

The Bank of Namibia (BoN) says activity in the domestic economy improved during the second quarter of the year, attributed to improved performance in the tertiary industry.

“Improvements in the tertiary industry were mainly observed in sectors such as wholesale and retail trade, information and communication, and transport. Real turnover in the wholesale and retail trade sector increased due to base effects, following the COVID-19 related lockdown measures instituted during the second quarter of 2020,” the central bank said.

BoN said the mining, agricultural, construction and manufacturing sectors, however, continued to record negative growth.

“Activity in the mining sector slowed on the back of lower production registered in diamonds, uranium and zinc concentrate. Livestock marketing activity in the agricultural sector declined due to restocking by farmers. The construction sector slowed as both Government and private construction works weakened. Similarly, manufacturing sector activity continued to be dragged down by lower throughput of basic metals, following the halt in production of refined zinc since May of 2020,” the apex bank said

BoN said the total Government debt stock stood at N$118.9 billion at the end of June 2021, representing a yearly and quarterly increase of 17.5 percent and 7.7 percent, respectively.

“Central Government’s debt stock rose over the year to the end of June 2021, owing to further issuances of Government securities as well as loans from the International Monetary Fund and the African Development Bank to finance the budget deficit. The increases on a yearly and quarterly basis were driven by a rise in the issuance of both Treasury Bills and Internal Registered Stock, coupled with the disbursement of the IMF loan and supplementary financing from the AfDB to finance the budget deficit. As a percentage of GDP, Government debt rose on a yearly basis by 6.9 percentage points to 63.2 percent compared to a year ago. Central Government loan guarantees declined during the period under review, mainly due to repayments of foreign loans which were guaranteed by government for the energy and transport sectors, as well as the appreciation of the Namibia Dollar against the US Dollar.”

The stock of international reserves remained sufficient to support the currency peg, while the Namibia Dollar appreciated against major trading currencies during the period according to BoN.

“The stock of international reserves stood at N$41.8 billion at the end of June 2021, equivalent to an import cover of 6.3 months. The Namibia Dollar strengthened against major trading currencies during the second quarter of 2021, underpinned mainly by the COVID-19 base effects and stronger international commodity prices. Moreover, the real effective exchange rate appreciated during the period under review, signaling a moderate decline in competitiveness of Namibia’s export products in foreign markets,” the central bank said.

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