The Bank of Namibia says Namibia’s current account deficit widened to 14% of GDP from 7.7% registered in the corresponding quarter of 2021, attributed to the country’s widened merchandise trade deficit.
“Namibia’s current account deficit deteriorated, whereas the International Investment Position recorded a net liability position during the second quarter of 2022. The current account deficit widened to 14.0 percent of GDP from 7.7 percent registered in the corresponding quarter of 2021. This was attributed to the widened merchandise trade deficit, reflecting a significant rise in import payments relative to the growth in export earnings,” BoN Director Strategic Communications and International Relations Kazembire Zemburuka said.
“The higher outflows of primary income resulting from higher dividend and retained earnings outflows also contributed to the widening current account deficit. At the end of the second quarter of 2022, Namibia’s international investment position recorded a net liability position, switching from a net asset position recorded a year earlier on the back of an increase in other investment and direct investment liabilities.”
This comes as the country’s import for goods and services increased to N$25.5 billion, in contrast to N$19.5 billion registered in the corresponding quarter of 2021, representing an increase of N$6 billion in the value of goods and services during the period according to the Namibia Statistics Agency.
He said the country’s stock of international reserves rose to a level of N$46 billion at the end of the second quarter of 2022, equivalent to 5.1 months of import cover.
“The stock of international reserves rose to a level of N$46.0 billion at the end of the second quarter of 2022, equivalent to 5.1 months of import cover, mainly due to inflows over the past year in the form of an IMF SDR allocation, asset swaps, and revaluation gains. The level of foreign reserves further increased to N$47.0 billion at the end of August 2022, partly due to SACU revenue and revaluation gains,” he said.
During the period under review, Government’s total debt as a percentage of GDP stood at 68.2%, increasing by 0.4 percentage point at the end of June 2022.
“On the fiscal front, the Central Government’s debt stock rose over the year to the end of June 2022. Government’s total debt as a percentage of GDP stood at 68.2 percent at the end of June 2022, accounting for a yearly increase of 0.4 percentage point. The yearly increase was driven by a rise in the issuance of both Treasury Bills (TBs) and Internal Registered Stock (IRS),” he said.
Zemburuka said the country’s external debt had declined year-on-year owing to the redemption of one of the Eurobonds in November 2021.
“Total loan guarantees as a ratio of GDP declined to 5.3% on a yearly basis, from 6.8% during the corresponding quarter in 2021. This was mainly a result of the repayments of foreign loans, which were guaranteed by the Government in sectors such as transport and energy, coupled with the repayment of domestic loans to the transport sector,” he said.
This comes as economic activity in the domestic economy increased, supported by the primary and tertiary industries during the period under review according to BoN.
