Windhoek
Despite the fact that many analysts have predicted a gloomy year for economic growth coupled with rising inflation and interest rates, Namene Kalili, Senior Manager Research and Development, FNB Namibia Holdings, is convinced that the outlook for 2016 is not bleak.
He emphasised that Namibia was doing better than most countries, even when faced with drought, as growth at home slowed down to 4 percent in a global economy that was growing at 3.6 percent.
He added: “Closer to home, South Africa is growing by 0.6 percent and Botswana 3.1 percent. Our figures are lower than previous years, but those are mostly driven by factors beyond our control. High investments into roads, dams, ports and commercial property have supported the relative high growth rate in Namibia. Given the medium-term nature of these investments we expect growth to remain positive, although declining. Hopefully rains will return, water supply normalise and the economy can turn the corner in 2017 or 2018.”
Kalili advised that limited water was contributing to the slight predicament the country faces, as it slowed down many of the water-intensive industries such as mining and manufacturing. Weak global demand and falling commodity prices were weighing on exports, while imports were increasing, thereby detracting from economic growth (increased imports are temporary and should translate to additional output in the medium-term).
He added that once infrastructure spending comes to an end, imports should slow down, production should increase and economic growth accelerate. Improved water infrastructure will mitigate against the negative impacts of drought and things will start looking up again.
He said everyone should spend wisely and support local business, thereby ensuring that “as much of our consumption dollars remain in the country”.
“If there is spare cash, save, save, save! Interest rates support savings and cash is king in 2016.”