Jo-MarÉ Duddy
19 December 2011
Namibia’s economy is expected to grow between 1,7 per cent and five per cent next year, depending on how hard the eurozone debt crisis will hit exports, the Bank of Namibia (BoN) said on Friday.
Paul Hartmann, outgoing Deputy Governor of the BoN, said the growing uncertainties about global economic recovery convinced the central bank to work with three growth scenarios for 2012. The pessimistic case forecasts growth of 1,7 per cent, whereas the optimistic scenario estimates growth of 5,0 per cent.
Hartmann said the baseline scenario forecasts real gross domestic product (GDP) growth of 4,2 per cent next year – up from an estimated 3,8 per cent this year, but down from the 6,6 per cent recorded in 2010.
Despite having to overcome the global turmoil, “the Namibian economy is still overwrought by the challenges of high unemployment, unequal distribution of income and poverty”, Hartmann said.
Under the baseline scenario, the 4,2 per cent growth in 2012 will be driven by increased uranium mining, more cement production at Ohorongo and the re-opening of the Otjihase and Matchless copper mines, Hartmann said. In addition, the money flowing from the Targeted Intervention Programme for Employment and Economic Growth (Tipeeg) into infrastructure development will also stimulate economic growth.
Non-diamond mining is expected to grow by 7,3 per cent next year, following an expected decline of 20,2 per cent in 2011.
The outlook for diamond mining remains gloomy. Growth in the sector is expected to contract further by 19,8 per cent in 2012 after an estimated decline of 16,4 per cent this year, mainly due to the month-long strike at Namdeb.
“Furthermore, onshore diamond deposits are diminishing and the land operations mine lifespan is only up to 2015 and the company need to invest over N$7 billion to extend the mine’s lifespan to 2050,” the BoN outlook stated.
“The current labour tension, which may scare away skilled employees, and uncertainty on global economic recovery continue to be downside risks,” the BoN said.
Secondary industry in Namibia is expected to grow by five per cent in 2012, up from an estimated 4,2 per cent this year. The BoN said growth should be broad-based and included all industries from manufacturing to utility services and increased investment in construction.
The central also expects the robust growth experienced in tertiary industries over the past two years to continue in 2012. Growth next year is projected at 5,7 per cent from an estimation of 5,9 per cent this year and 4,9 per cent in 2010.
“The optimism for 2011 and 2012 is based mainly on improvements in the wholesale and retail trade, transport and communication and the public administration category, even though a decline is expected in the hotels and restaurant category within the same period,” the BoN said.
AllAfrica – All the Time