Jo-MarÉ Duddy
2 July 2009
AS the recession starts to bite, Namibians ran up bad debts of more than N$1 billion with banks from January to March, eight per cent more than in the last quarter of 2008.
Releasing its latest quarterly report, Bank of Namibia (BoN) Deputy Governor Paul Hartmann yesterday confirmed the gross domestic product (GDP) figures released by the Central Bureau of Statistics (CBS) Tuesday, which show that economic growth during the first quarter hit minus 5,8 per cent.
According to the CBS, the past quarter is the second worst quarter of economic growth on record. The worst quarter was the fourth quarter of 2004, when the economy contracted by 8,3 per cent.
The BoN report paints a gloomy picture.
Efforts by the BoN to kick-start the economy with a more enticing interest rate regime seem to have had little impact.
Credit extended to individuals during the quarter merely grew by 1,4 per cent, down from four per cent the previous three months. Passenger vehicle sales dropped by 3,6 per cent quarter-on-quarter. Home loans only increased from N$13,53 billion in December to N$13,68 billion in March.
Performance-wise, the first quarter proved to be a bad start to the year.
Earnings from mining exports tumbled by 44 per cent quarter-on-quarter to N$2,2 billion.
The value of diamond exports dropped by 65 per cent, uranium by 35 per cent, gold by 19 per cent, silver by 67 per cent, and zinc concentrate by 46 per cent. Export earnings from manufacturing also fell by 45 per cent quarter-on-quarter.
Overall, Namibia's trade deficit for merchandise ballooned by 135 per cent quarter-on-quarter to N$1,2 billion.
Diamond production plunged by 78 per cent quarter-on-quarter.
Gold production was down 44 per cent, zinc concentrate decreased by 35 per cent, and uranium fell by seven per cent.
There was even a slump in the exploration sector.
Only 44 Exclusive Prospecting Licences (EPLs) were issued by the Ministry of Mines and Energy during the first quarter, compared to 142 the preceding quarter.
"Although issuing EPLs is not an indication that the companies will become operational, it could still show the intended investments in the local economy," the BoN said.
Building plans approved, buildings completed and cement imports declined by 1,7 per cent, 4,5 per cent and 5,3 per cent quarter-on-quarter respectively.
Tourism also suffered a poor quarter, with room occupancy showing the biggest decline. Beds and rooms sold fell by 53 per cent and 55 per cent quarter-on-quarter respectively. Regional arrivals by air declined by 20 per cent, while domestic arrivals decreased by 14 per cent. Domestic and regional departures dropped by 17 per cent and 21 per cent quarter-on-quarter respectively.
Summing up the past quarter's performance, Hartmann said the Namibian economy continued to be exposed to the weakening global economy.
"Although the commodity prices have started abating, it is not clear how long the recent recovery will last in order for the benefit to be transmitted to the real sector of the global economy.
"Therefore, as long as the uncertainty in key fundamentals remains, reversing sluggish economic activities in Namibia will continue to be a challenge going forward," Hartmann said.
Be the first to Write a Comment!
Copyright © 2009 The Namibian. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
