NAMIBIA is well on its way to achieve the economic growth target of 4,6% for 2012-13 set out in the Fourth National Development Plan (NDP4), after the country recorded economic growth of 5,0% last year. Releasing the Preliminary National Accounts 2012 on Wednesday, Statistician General John Steytler described the gross domestic product (GDP) growth of 5% as "respectable" and "sufficient" to achieve Namibia's growth objectives. As NDP4 runs on fiscal years, Namibia's performance for the first quarter of 2013 must still be factored in to establish economic growth during the first year of the development blueprint.
The GDP growth figure of 5% for the 2012 calender year caught economists off guard. Forecasts of local economists, as well as institutions like the International Monetary Fund (IMF) varied between 4% and 4,5%.
Namene Kalili, FNB Namibia's manager for research and competitor intelligence, said economists were "very pessimistic" about the primary sector's performance. However, the primary sector, especially mining, turned out to be the driver of economic growth.
The mining sector expanded by 11,2% in 2012, following a contraction of 7,9% the previous year. Kalili pointed out that the growth was "merely statistical" as Namibia tries to recover from a 42,2% contraction in the mining industry in 2009.
Steytler said the "buoyant" performance in the mining sector last year was fuelled by uranium, copper, zinc and the quarrying of stones, which grew at 18,8% in 2012 after contracting 22,1% in 2011. Diamond mining also bounced back nicely, growing 9% after contracting 2,6% in 2011.
Overall, the primary sector grew by 6,5% in 2012, compared to 0,1% the previous year.
Kalili said this growth, too, was merely a statistical recovery. "In fact, the N$7,1 billion GDP contribution by the primary sector in real terms is in effect equivalent to the sector's GDP contribution back in 2003," he said.
The secondary sector expanded by 5,9% in 2012, up from 3,3% in 2011. This was mainly due to the construction sector, growing 12,1% as a result of Government projects through the Targeted Intervention Programme for Employment and Economic Growth (Tipeeg). Growth in the construction sector, however, was slower than the 19,3% recorded in 2011.
"Although Tipeeg has not met its targets, it has nevertheless had a positive impact on the construction sector over the past two years - just not as significantly as originally planned," Kalili said.
The tertiary sector grew by 6,9% in 2012, improving from 4,5% the previous. Steytler said this was mainly the result of wholesale and retail trade and repairs, which grew by 12,1% compared to 3,3% in 2011.
Kalili said "increased gross national disposable income, low interest and inflation rates have increased consumer appetite to consume and borrow", driving up growth in the wholesale and retail trade. Real gross national income grew by 9,6% in 2012, slightly better than the 9,3% the year before. Kalili said Namibia has rebounded from the financial crisis of 2008.
"Economic growth was underpinned by a favourable business climate where Government is spending a whole lot more money in the economy, interest rates are low, inflation is manageable, businesses are investing and consumer appetite is on the increase.
Not only has Namibia bounced back, but the goals in Vision 2030 don't seem out of reach, he said.
"Although we are behind in terms of Vision 2030, the vision remains attainable if the economy can only pick up the pace of economic growth," Kalili said.