Namibia’s economic is expected to slow despite a significant improvement in global growth, analysts have predicted.
The country’s economy is expected to grow 1.3% in 2022 according to the International Monetary Fund (IMF), 1.8% (World Bank), 3.3% (AfDB), 3.2% Bank of Namibia of Namibia and a 2.8% growth projection by the Ministry of Finance.
However, Cirrus Capital’s Head of Research Robert McGregor said the quarterly GDP prints for 2021 have been disappointing, with Namibia’s recovery much slower than was anticipated.
“This was reflected by the downward revisions to growth forecasts during the course of the year, not just by ourselves but a host of institutions as well,” he told The Brief.
“To make matters worse, this comes off an incredibly weak base, particularly with the 2020 contraction revised to -8.5% from the initial -8.0% in the Preliminary National Accounts. Growth for the first three quarters of 2021 averaged -0.5%, owing to a large contraction in Q1. This means an incredibly strong finish in Q4 will be needed to meet the relatively low growth expectations for 2021, barring any further revisions to the published quarters.”
“Even with such a low base (the 2020 contraction and weak 2021 growth), Namibia’s growth outlook remains disappointingly lacklustre and highly dependent on substantial improvements in mining output. Namibia’s full growth potential remains hampered by declining investment, and this will not change without rapid and broad-based improvements to her investment attractiveness which do not appear forthcoming,” added McGregor.
This comes at a time when global growth is expected to increase by 4.1% in 2022 and 3.2% in 2023 as more nations start unwinding unprecedented levels of fiscal and monetary policy support to tackle the fallout from the coronavirus pandemic according to the World Bank.
According to the Bretton Woods Institution, emerging and developing economies, most of which are in Africa, grew by 6.3% at the end of 2021.
PSG Namibia’s Research Analyst, Shelly Louw, forecast a 0.3% growth rate for the domestic economy in 2021.
“The Bank of Namibia’s December 2021 Economic Outlook Update includes a GDP growth forecast for 2021 of 1.5% with risks to the downside. We do not expect that the BoN’s GDP growth forecast for 2021 will be met, as we forecast growth of 0.3% for 2021,” she said.
Simonis Storm Economist Theo Klein is predicting a growth projection of 2.5% for 2022, driven by mining among other sectors.
“Local outlook – 2.5% average GDP growth forecasted for the Namibian economy in 2022 (compared to 1.9% in 2021). Mining, agriculture, ICT and tourism are some of the sectors that will support growth in the short run. Numerous policy uncertainties are likely to remain unresolved in the New Year, weighing on business confidence and investor sentiment,” he said.
