Namibia recorded investment inflows of N$8.8 billion in the third quarter of 2023, a decline from N$10 billion recorded in the second quarter of 2023, official figures show.
According to the Bank of Namibia’s Quarterly Bulletin, Q3 investment was primarily driven by equity injections for oil and gas exploration and intercompany debt.
“Direct investment liabilities recorded an inflow of N$8.8 billion compared to an inflow of N$6.1 billion registered a year ago and an inflow of N$10 billion recorded in the second quarter of 2023,” the bulletin noted.
The report highlighted that lower FDI inflows were observed on a quarterly basis on account of a reduction in the uptake of intercompany loans extended to domestic subsidiaries operating in the mining sector as well as lower retained earnings by foreign owned entities.
Meanwhile, Namibia’s portfolio investment switched from a small inflow a year earlier to an outflow in the quarter under review, although such capital outflow narrowed on a quarterly basis.
“Namibia’s portfolio investment registered a net capital outflow of N$2.5 billion compared to a capital inflow of N$235 million recorded a year earlier and an N$8.1 billion capital outflow during the second quarter,” the report said.
The Bank of Namibia’s report noted that the net outflow registered during the review period was partly driven by the narrowing of the government borrowing requirements which reduced the issuance of domestic money market and capital market instruments, providing room for resident institutional investors and corporations to allocate funds externally.
Moreover, continued interest rate and yield differentials which offered better returns in South Africa for resident institutional investors and corporations compared to the domestic market contributed to the outflows.
Similarly, on a net basis, other investments continued to record a robust inflow in the third quarter of 2023.
On an annual basis, other investments remained essentially unchanged, registering a net inflow of N$3.6 billion.
“While there was a reduction in foreign-denominated deposits held with non-resident banks by Namibian deposit-taking corporations, there were offsetting changes in other items. Compared to an inflow of N$2.1 billion recorded a quarter ago, other investments rose on a quarterly basis on account of higher uptake of trade credit facilities by Namibian entities,” the report reads.
