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Namibia’s economy shows resilience in 2021

By March 31, 2022 3856 0
Namibia’s economy shows resilience in 2021

Namibia’s economy rebounded from a negative growth of 7.9% recorded in 2020 to register a growth of 2.4% in 2021, the country’s Statistics Agency announced on Thursday.

The Namibia Statistics Agency (NSA) said the size of the domestic economy as measured by nominal GDP grew by N$7 billion to N$180.8 billion last year.

“The improved performance of the economy was observed in the Primary industry mainly in the ‘Mining and quarrying’ sector which posted a growth rate of 13.6% in real value added during the period under review,” NSA CEO and Statistician General, Alex Shimuafeni said.

“However, gross value added remains below pre-pandemic levels of N$181.1 billion recorded in 2018 and N$181.2 billion in 2019.”

Growth in tertiary industries, according to the NSA, was driven by an increase in demand for goods and services resulting in improved performances in the ‘Wholesale and retail trade’ sector last year.

“The sector posted a positive performance of 6.1 percent following consistent contractions for the last four years,” said Shimuafeni.

The ‘Transport’ sector jumped from a contraction of 22.7% witnessed in 2020 to a positive growth rate of 2.8% during the period under review.

Demand for hospitality services according to Shimuafeni started to pick up in 2021 resulting in the ‘Hotels and Restaurants’ sector registering a growth of 10.4% during the period under review.

“Overall positive performance in Tertiary industries was observed in almost all sectors except for ‘Financial and insurance’ and ‘Administrative and support’ services activities. However, both sectors are showing signs of improvement.”

Analyst views

“This was expected given the subsequent lifting of restrictions in 2021 relative to the base year (2020). However, the effect due to COVID-19 and preceding years of economic slowdowns are still material on the economy and could become structural. The heavily affected service sectors are still in negative territory. In real terms the economy is still 6% below its pre-pandemic level and relatively comparable to the size back in 2013. This is despite the fact that the population is likely to have increased by relatively 11% or 250 000 individuals over the same period. Going forward, subdued investment levels and associated decline in gross savings which entails low setting for production capacity remains concerning headwinds to full recovery and absorption to lost jobs post-COVID period,” said Milner Siboleka, Assistant Portfolio Manager & Economist at First Capital Namibia.

"Although the preliminary GDP figures for 2021 came in higher than we expected, we caution that these figures could still be revised significantly over the next three years as has been the case with previous national accounts data in Namibia in the past The better than expected outcome also does not materially affect our forecast, except that it necessitates that we lift the level of real GDP over the medium term in the next forecast round We still expect that new mining activities will drive economic growth to above 3 5 this year, although risks are skewed to the downside because of the ongoing pandemic and the Russia Ukraine war," said Shelly Louw , PSG Namibia Research Analyst.

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Last modified on Thursday, 31 March 2022 17:51
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