Jo-MarÉ Duddy
8 December 2011
BANK of Namibia (BoN) Governor Ipumbu Shiimi yesterday once again left the repo rate unchanged at six per cent to support the “weak recovery of the domestic economy”.
The BoN’s bank rate has been stuck at six per cent since last December, freezing the prime interest rate at 9,75 per cent.
Shiimi, re-appointed by President Hifikepunye Pohamba as governor until 2016, described the global economy as “weak and fragmented”. The domestic picture is a “bit more positive”, he said.
However, “Namibia’s economic growth can only be sustained if the global economy recovers”, Shiimi stressed.
The secondary and tertiary sectors were “upbeat” during the third quarter, but the primary sector remained subdued, he said.
Manufacturing and construction drove the secondary sector, while better performance in tourism, wholesale and retail, as well as higher cargo volumes, boosted the tertiary sectors, Shiimi said.
On the other hand, diamond, gold, uranium and zinc mined during the quarter were lower than the third quarter of 2010. Both mining and the agricultural sectors showed negative growth during the past third quarter, he said.
As a result, “most of the key mineral exports displayed bleak performance” during the period under review. This was mainly due to “logistical constraints and limited stock intake”, Shiimi said.
He said a “similarly disappointing picture” was visible in livestock exports. Seasonal factors and an export ban in two regions to contain a foot-and-mouth disease outbreak were named as reasons for the poor performance.
Shiimi said despite the weak exports, Namibia’s foreign reserves increased by 11 per cent compared to a year ago. Foreign reserves stood at N$11,9 billion at the end of October, more than the international benchmark of three months of import cover, and adequate to maintain the Namibia dollar’s peg to the rand.
Government’s domestic debt situation remained stable, Shiimi said.
Domestic debt increased from 15,9 per cent of GDP at the end of October to 16,4 per cent of GDP a month later, Shiimi said. The increase was reflected in both treasury bills and internal registered stock.
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