Double-digit reductions were recorded in some sectors of the domestic economy for the second quarter of 2020. Hotels and Restaurants recorded the highest decline of 64.2% compared to a growth of 12.3% of the same quarter of 2019.
Other services, which include art, entertainment, recreation activities, domestic workers, caretakers, tutors and gardeners, recorded the second-highest decline of 43.7% during the review period.
According to the Namibia Statistics Agency (NSA), the manufacturing, as well as the transport and storage sectors registered declines of more than 30% in real value-added. Meanwhile, administrative and support services declined by 29.2%, whereas wholesale and retail trade also declined by 22.5%.
However, improved performance was observed in agriculture and forestry, information and communication, as well as health sectors, which recorded growth rates of 47.2%, 11%, and 6%, respectively.
The Agency stated that the positive performance in agriculture and forestry is due to a bumper harvest by the farmers resulting from good rainfalls experienced during the period under review. The information and communication sector growth resulted from increased activities in the usage of data as demand surged up for data and calls as workers switch from working from offices to homes.
“This was further exacerbated by demand from higher institutions switching from face-to-face teaching to online learning. Acceleration in the Health sector is owed to the easing of fiscal consolidation policy as a response to the pandemic that saw increased activities resulting in the employment of more health workers to assist in containing the disease,” reads the report.
Although the hotels and restaurants sector recorded the deepest contraction of 64.2%, its contribution to the GDP growth rate of 11.1% represents only a reduction of 1.3 percentage points whereas the highest percentage point contributor is the manufacturing sector that posted 4.4 percentage points to the overall GDP growth rate followed by Wholesale and retail trade (-2.2 percentage points) and Taxes on products (-2.0 percentage points).
CEO of NSA Alex Shimuafeni said the domestic economy contracted by 11% during the second quarter of 2020 compared to a decline of 3.6% recorded in the corresponding quarter of 2019. During the review period – this is the highest contraction recorded.
The contraction in the economic performance during the second quarter of 2020 is observed across the entire sectors of the economy as domestic activities were under pressure due to the impact of the Covid-19 measures that were put in place for the country to mitigate the spread of the virus. The measures entailed among others, closing of the country’s borders and only allowing businesses that provide essential services to operate.
- mndjavera@nepc.com.na
Photo: Sectors