The Bank of Namibia (BoN) says activity in the domestic economy improved during the third quarter of 2021 compared to the corresponding quarter of the previous year.
The improved activity according to the central bank was driven by the primary industry, particularly the mining sector where the production of most key minerals such as diamonds, uranium, gold and zinc scaled up.
“In the agricultural sector, livestock marketing activity for cattle and small stock increased during the period under review. In the tertiary industry, real turnover for wholesale and retail trade sector improved due to low base effects, following the COVID-19 related lockdown measures instituted during the third quarter of 2020,” the apex bank said.
“The communication subsector continued to sustain the growth in the information and communication sector, on the back of strong demand for internet data. The tourism sector, although remained weak, regained some ground lost in 2020, due to an increase in the tourist arrivals, triggered in part by the augmented global vaccine rollout and reduced travel restrictions. On the contrary, the construction and manufacturing sectors slowed during the third quarter.”
On the fiscal front, Central Government’s debt stock rose by 6.8% percentage points to 67% at the end of September 2021, the central bank said.
“The increase was driven by a rise in the issuance of both Treasury Bills and Internal Registered Stock, coupled with the disbursement of an IMF loan and supplemental financing from the African Development Bank to finance the budget deficit. Total loan guarantees as a percentage of GDP, however, declined on a yearly basis from 6.3 % to 5.6% during the period under review. The decline was due to repayments of foreign loans which were guaranteed by Government for the energy, transport and the communication sectors, coupled with the repayment of domestic loans for the transport sector,” BoN said.
On the external sector front, BoN said the current account balance deteriorated further by N$6.4 billion compared to a much smaller deficit of N$315 million in the corresponding quarter of last year ,while the stock of international reserves increased during the third quarter of 2021.
“As a percentage of GDP, current account deficit increased to 14.3 % from a mere deficit of 0.7% over the same period. The deterioration in the current account balance was mainly due to a lower surplus on the secondary income account as well as larger deficits in merchandise trade,” the central bank said.
“The stock of international reserves rose to N$45.9 billion, equivalent to an import cover of 5.7 months at the end of the third quarter. The increase in the stock of international reserves was mainly supported by the IMF’s SDR allocation, the IMF Rapid Financing Instrument (RFI) and the AfDB loan acquired by the Namibian Government.”
This comes as Namibia’s economy grew by N$1.1 billion in Q3, recording a 2.3% growth compared to a decline of 12.3% recorded in the corresponding quarter of 2020, latest official figures from the Namibia Statistics Agency.
