Namibia experienced a capital outflow of N$14.2 billion from January to August 2024, marking an increase of N$3.6 billion compared to last year, latest data reveals.
Bank of Namibia Governor Johannes !Gawaxab said the increase in outflows has been largely attributed to payments for imported merchandise, rather than investors seeking higher yields in South Africa.
Speaking during a recent discussion on the country’s financial trends, !Gawaxab noted that last year during the same period, the outflow was N$10.6 billion, marking an increase of N$3.6 billion in net outflows this year.
“Upon further analysis of the N$3.6 billion increase, we questioned whether it was driven by investors seeking better yields in South Africa. However, we concluded that N$3 billion of that amount was primarily related to payments for merchandise,” he said.
The Governor noted that Namibia continues to import more than export, including items such as drilling pipes and equipment used by drilling companies.
“The remaining N$600 million still requires further analysis, but N$3 billion of the N$3.6 billion increase is directly linked to trade,” he said.
This comes as Namibia’s merchandise trade deficit widened to N$19.9 billion during the first half of 2024 compared to N$12.3 billion in the same period in 2023.
“The wider trade deficit was primarily underpinned by higher import payments in the categories of machinery, equipment and base metals largely due to increased exploration activities,” the Governor said.
He also noted the higher deficit was further exacerbated by a decline in export receipts, attributable to lower diamond exports, largely reflecting the depressed diamond prices.
Meanwhile, the stock of international reserves on 31 July 2024 stood at N$60.8 billion, higher than the N$55.6 billion recorded on 31 May 2024, mainly due to higher SACU receipts.
“This most recent level translates to an estimated import cover of 4.1 months, remaining adequate to sustain the currency peg between the Namibia Dollar and the South African Rand and meet the country’s international financial obligations,” he said.
