Namibia recorded a net foreign direct investment (FDI) inflow of N$5.6 billion in the third quarter of 2024, a decline of 16.9% quarterly and 44.4% annually, latest data shows.
According to the Bank of Namibia (BoN), the reduction is attributed to lower equity inflows into oil and gas exploration and appraisal activities, as operators scaled down appraisal drilling campaigns to analyse the results further.
“Namibia’s net foreign direct investment recorded a lower net quarterly inflow due to lower equity inflows into oil and gas exploration and appraisal activity over the third quarter of 2024,” BoN’s Quarterly Bulletin read.
Meanwhile, on a net basis, Namibia’s portfolio investment switched from a net outflow to a net inflow during the third quarter of 2024, attributable to the sale of foreign equities and debt securities from offshore markets.
“During the quarter under review, portfolio investment registered a net inflow of N$3.6 billion compared to a capital outflow of N$2.7 billion and N$1.6 billion recorded a year earlier and in the preceding quarter, respectively,” BoN said.
The central bank said this was driven by the sale of foreign equities and debt securities in offshore markets.
During the quarter under review, other investments recorded a net capital outflow of N$3.3 billion compared to a net inflow of N$1.0 billion and N$4.5 billion recorded during the corresponding quarter last year and in the previous quarter, respectively.
“The net outflow was on the back of the placement of deposits abroad given the wider interest rate differential between Namibia and South Africa. This was further supported by foreign loan repayments, mainly from the mining sector and the central government,” said BoN.
Furthermore, the net outflow was complemented by trade credit extended to non-residents, mainly in the mining sector and for the re-export of mineral fuel.
BoN noted that the yearly increase in other investments was chiefly ascribed to deposit placements abroad and repayments in the form of foreign loans.
Moreover, Namibia’s international reserves declined by 0.9% quarter-on-quarter to N$57.1 billion at the end of September 2024, due to exchange rate appreciation and unrealised revaluation losses.
However, reserves rose 6.2% annually, driven by higher SACU receipts.
The Bulletin highlighted that reserves, sufficient to maintain the currency peg and meet financial obligations, provided an estimated 3.9 months of import cover, up from 3.8 months in the previous quarter.
By October 2024, reserves increased to N$60.9 billion, offering 4.1 months of import cover following SACU inflows.
