WINDHOEK - Third quarter trade statistics, released by the Namibia Statistics Agency (NSA) last week, show that the value of exports increased by 2.1 percent from N$23.8 billion in the second quarter of 2018 to N$24.3 billion in the third quarter. However, local economist, Klaus Schade, has warned that the trade figures, which refer to trade in goods only and exclude the trade in services, indicates that almost half of Namibia’s exports are re-exports, implying that no or very little value has been added to these goods.
“Moreover, the four main export items account for 70 percent of total exports, which makes Namibia very vulnerable to a drop in demand for one of these goods. The expected decline in demand for diamonds in 2019 underlines this vulnerability. Hence, more efforts are required to attract investment into greenfield industries. The recent examples of car manufacturing and asparagus farming illustrates that it is possible. However, in order to succeed, serious efforts are needed to improve the competitiveness and the business climate in the country,” said Schade in his commentary on the latest figures.
He added that concerted efforts by both the private and public sectors to identify goods that can be produced and sourced locally are needed to not only reduce the import bill, but also diversify the domestic economy.
“The current drop in oil prices could bring some relief for the import bill, but promoting and applying new technologies to substitute energy imports with energy sources available in the country will reduce the energy import bill permanently and support domestic economic activities,” said Schade.
The NSA’s latest figures show that the value of Namibia’s re-exports dropped by 9.4 percent from N$12.8 billion to N$11.6 billion over the same period. Excluding the value of re-exports from total exports, the value of goods produced in Namibia and exported rose by 15.4 percent from N$11 billion to N$12.7 billion.
The value of imports rose by 10.8 percent from N$24.9 billion to N$27.6 billion between the second and third quarter of 2018, which is one of the highest import values over the past five years. The trade deficit tripled from N$1.1 billion to N$3.3 billion in the third quarter 2018. However, compared to the trade deficit of N$8.4 billion in the third quarter 2017, the deficit dropped by 60.4 percent. The third quarter 2018 recorded one of the lowest quarterly trade deficits over the past five years. Only the first quarter 2016 (N$448 million) and the second quarter 2018 (N$1.1 billion) recorded lower deficits.
Taking the top export spot for the third quarter were copper cathodes with a value of N$5.9 billion, up by 38.1 percent from N$4.3 billion. However, Schade pointed out that only five percent of exported copper cathodes are produced locally, while 95 percent (N$5.7 billion) are re-exports that were imported mainly from Zambia.
Re-exports grew by 43.5 percent from N$3.9 billion in the second quarter and copper cathodes account for 24.5 percent of total exports.
Also, diamond exports rose by 9.3 percent from N$5.2 billion to N$5.7 billion and account for 23.6 percent of total exports. Re-exports contribute 28 percent total diamond exports and the value of re-exports increased by 7.5 percent from N$1.5 billion to N$1.6 billion.
Meanwhile, the exports of ores and concentrates rose strongly by 42.3 percent from N$2 billion to N$2.8 billion to one of the highest export values over the past five years. Ores and concentrates account for 11.6 percent of total exports
The value of fish exports however declined by 2.6 percent from N$2.6 billion to N$2.5 billion. According to Schade, despite the slight drop in value, the value of fish exports was the third strongest over the past five years only exceeded in the second quarter 2018 (N$2.59 billion) and the second quarter 2016 (N$2.57 billion). Fish exports contribute 10.4 percent to total exports.
2018-12-18 09:51:37 3 months ago