Windhoek
The Namibian economy is projected to grow by 5 per cent and 5.5 per cent during 2015 and 2016 respectively, which is an improvement from a preliminary 4.5 per cent recorded in 2014.
According to the Bank of Namibia, adverse weather conditions are, however, expected to restrain growth in the agricultural sector, which is only expected to grow positively again in 2016.
“Growth will be driven by construction in the private and public sectors, increased mining output from new mines, supported by the slight recovery in international mineral prices and projected increases in manufacturing activities,” said BoN’s Ndangi Katoma in a statement released this week. Katoma elaborated that downside risks to domestic growth include slow recovery in the country’s trading partner economies, coupled with adverse local weather conditions.
“The projected recovery in uranium mining is partly dependent on the assumption that international prices for uranium will continue to recover. This will ensure continuation of uranium production and export and will entice mines that are on hold to resume with production,” said Katoma. Similarly, he said, recovery in agriculture may be delayed if weather conditions do not improve during the 2015/16 season.
Katoma added that electricity supply constraints that started in South Africa could worsen further and spill over to the Namibian economy and restrain growth. “The negative impact of the decline in oil prices on the Angolan economy is also likely to have a dent on Namibia’s growth, mainly through wholesale and retail trade,” said Katoma.
Meanwhile, commenting on the global economy, Katoma said the world’s economy is expected to improve to 3.5 per cent and 3.8 per cent in 2015 and 2016, respectively, from 3.4 per cent in 2014.
“The projected increase in world growth during 2015 is likely to be driven by stronger growth in advanced economies, supported by low commodity prices, with the United States expected to play a leading role,” explained Katoma.
Furthermore, the gross domestic growth in sub-Saharan Africa is executed to slow to 4.5 per cent in 2015 from 5 per cent in 2014, before picking up to 5.1 per cent in 2016.
Katoma said the projected slower growth in 2015 is attributable to recent declines in commodity prices and the impact of the Ebola epidemic in affected countries. He also noted that growth in South Africa was revised downwards to 2 per cent and 2.1 per cent for 2015 and 2016, respectively. This downward revision was supported by worsening electricity supply constraints and tighter fiscal policy.