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The number of trips taken by Namibians to local hospitality establishments continued to drop further in August 2022, from 17.9% in July 2022 to 15.7%, amid an increase in foreign arrivals.

The City of Windhoek has entered into a N$135-million loan agreement with the Development Bank of Namibia, to finance the Khomas intake substation project to ensure additional capacity to support the City’s forecasted power demand.

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.

 TransNamib executives and staff who were flagged in a forensic report done by auditing firm Ernst and Young (E&Y) are now off the hook after the Anti-Corruption Commission (ACC) cleared them from any corrupt practices.

TotalEnergies said an oil discovery off Namibia could be a “giant,” boosting speculation that the country is home to a prolific new hydrocarbon basin.

Global consultancy firm McKinsey and Company will pocket N$34.6 million (€2 million) to draft Namibia’s green hydrogen strategy, The Brief can reveal.

The country set aside N$87 million for consultancy work on its multibillion-dollar green hydrogen projects, as well as drafting a plan to promote the country's green hydrogen sector.  

Namibian consultancy and advisory firm, Monasa Advisory & Associates has been subcontracted for some of the work.

The tab is being funded by the Germany’s Federal Ministry of Education and Research, (BMBF).

Besides Mckinsey, the government has enlisted the services of SYSTEMIQ, Cranmore, Hinicio, Clifford Chance, NREL.

“Despite the involvement of all these firms, it is crucial that the Government still puts shoulder to shoulder to execute the vision and plans that are jointly crafted with the Namibian private sector,” Presidential Economic Advisor and Green Hydrogen Commissioner James Mnyupe, told The Brief.

Mnyupe said the Namibian Government was fortunate to have received support from the German Government and the African Development Bank that enabled it to mobilise all of the above experts without incurring any fiscal expenses.

In addition, Namibia also secured almost N$53 million (US$3 million) through the African legal support facility (ALSF) from the African Development Bank. 

However, this budget will be consumed over a two-years period. 

"The other consultants are being funded by the ALSF from the AFDB. The ALSF ran the procurement process given that it’s a grant from the ALSF and other donors. Ministry of Finance and Attorney General’s Office were involved in reviewing the proposed arrangements from the ALSF and these were presented to the GHC for consideration," said the Green Hydrogen Commissioner.

He said in terms of the work distribution all the consultants are contributing to the strategy in one way or another.

"The other consultants (apart from McKinsey and Monasa) are assuring the government negotiating team with negotiations with Hyphen so that we can get to an implementation agreement as soon as possible," he explained.

The consistency tender was awarded by a Strategic Working Committee which is a partnership between Germany and Namibia, according to Mnyupe.

The Commissioner said the strategy is an example of impactful economic diplomacy which has been spearheaded by the Head of State and the Cabinet.

“The only way the Namibian Government envisions the incubation of a successful and thriving synthetic fuels industry in Namibia is through full cooperation between the Namibian Public and Private Sector and all the international counterparts that want to see Namibia succeed. 

“We continue to encourage all Namibians to continue working well with local and international partners as we all push forward towards realising the aspirations of Vision 2030, which were boldly articulated by our founding fathers," Mnyupe said.

 

This comes as the country has ambitions to be one of Africa's first green hydrogen export hubs.

The government is banking on green hydrogen to attract more than N$107 billion (US$6 billion) in foreign direct investment (FDI) which is anticipated to generate annual revenues more than N$1.4 billion (US$800 million), while also contributing to its much-anticipated Sovereign Wealth Fund.

Earlier this month, Hyphen Hydrogen Energy, the preferred bidder to implement the country’s first green hydrogen project, has expressed optimism that the Namibian government will sign off an agreement before the year ends.

 

 

 

On Monday, the pound sank to a record low against the United States dollar as investors rushed to sell the currency and government bonds in a major vote of no confidence in new Prime Minister Liz Truss’s economic plans, which include large tax cuts funded by steep increases in government borrowing.

The pound at one point in Asian trading sank as low as $1.0327, surpassing the previous record low reached in 1985, before making back some of its value.

The rand was last trading at R19.43 against the pound, from around R21.20 at the start of 2022.

The price of 5-year UK bonds — through which investors loan money to the government in return for interest — recorded the sharpest fall since at least 1991.

Under Chancellor of the Exchequer Kwasi Kwarteng’s “mini budget” announced on Friday, the UK is proposing the biggest tax cuts in 50 years, including abolishing the 45 percent tax rate on incomes over 150 000 pounds (R2.9 million).

The tax cuts, along with a plan to support household’s rising energy bills, will require the government to borrow an extra 72 billion pounds (R1.4 trillion) in the next six months alone.

As with other goods and services, the value of most of the world’s major currencies operates on the principle of supply and demand.

When demand for a particular currency is high, the price goes up and vice versa.

The pound’s plummeting value indicates that investors are concerned about the UK’s ability to manage so much extra debt, especially as rising interest rates make borrowing much more costly.

On Monday, Raphael Bostic, a top official at the US Fed, warned that the tax overhaul had “really increased uncertainty” and raised the risk of a global recession.

“Confidence in the UK economy is low right now,” Pao-Lin Tien, an assistant professor of economics at George Washington University, told Al Jazeera.

“The new prime minister’s economic policy of lowering taxes on the wealthy is not too popular, and the consensus is that it will not work in stimulating the economy.”

While the UK’s tax plans were the initial trigger of the pound’s freefall, economists say that investors’ confidence in the British economy has been waning for some time due to developments such as Brexit.

“The British pound has long been suffering for political decisions in the UK,” Alexander Tziamalis, a senior economics lecturer at Sheffield Hallam University, told Al Jazeera.

“It has been hit by Brexit and is also facing the prospect of a second Scottish independence referendum and a potential trade war with the EU over the Northern Ireland protocol.”

What can the UK do to stop the pound’s decline?

The main tool available to prop up the pound, or any other falling currency, is to raise interest rates in order to attract foreign investors with better yields.

On Monday, Andrew Bailey, the governor of the Bank of England, said the central bank would not hesitate to lift rates as necessary.

But despite calls from some economists for emergency action, the UK’s central bank opted against an unscheduled rate hike, sending the pound down to $1.06 after it made some earlier gains.

“Both the Bank of England and Bank of Japan can decide to raise rates to match the rising US interest rates,” said Tien, the professor at George Washington University.

“This will help, but if investors don’t see aggressive enough actions from BoE or BoJ — so not just an increase in rates, but a larger than expected increase in rates — it won’t help much with the currency values. The issue with aggressively large interest rate hikes is that it’s likely to push the economy into a recession, which no one wants to see.”

Governments can also intervene by buying up their own currency to prop up its value, although this is frowned on by many economies and risks invoking trade penalties.

“The pound and yen are officially floating exchange rates, governments should not and do not often intervene in the forex market,” Tien said.

Why is the US dollar so strong?

The strength of the US dollar, which has been on an upward trajectory since mid-2021 and last month hit a 20-year high against six major currencies, has two main drivers.

The first is confidence in the US economy relative to its peers.

Much in the same way a weakening currency reflects declining investor confidence in a country’s economy, a strengthening currency points to a vote of confidence in an economy’s fundamentals.

While the US economy is battling high inflation and flagging growth, the dollar has long been seen by investors as a reliable bet.

“The US dollar has always been seen as a safe haven for investors because the US is such a strong and large economy, so if there is global uncertainty, it’s always a safe bet to hold US dollars because it retains value well,” Tien said.

“So with the war in Ukraine, economic and political problems in Europe, high inflation, etc, it is not surprising investors are turning to the US dollar.”

Marc Chandler, chief market strategist at financial consultancy Bannockburn Global Forex, said that the US seemed like a safe bet to investors in light of global events even if it recorded negative growth during the last two quarters.

“The US biggest rivals have shot themselves in the foot. Here I am thinking of Russia’s invasion of Ukraine and China’s zero-Covid policy that has disrupted growth,” Chandler told Al Jazeera.

“The US allies are also having serious struggles. Japan is the only G10 country not to raise interest rates.  China actually cut rates recently.  Europe is on the verge of a recession and the UK’s new government has stirred crisis talk with its fiscal stimulus adding to its current account deficit.”

The second driver of the dollar’s rise is interest rate hikes by the US Federal Reserve, which has been raising the cost of borrowing in an effort to tame soaring inflation.

With depositors at US banks benefitting from interest rates, investors have been further encouraged to swap other currencies for dollars, pushing up the price of the greenback.

“Of course, central banks in other jurisdictions such as the UK have also been raising interest rates, and the eurozone is planning to do likewise. But they are not acting as aggressively as the US,” said Tziamalis, the economics lecturer at Sheffield Hallam University.

“Meanwhile Japan is not tightening at all, so the net result is still greater overseas demand for greenbacks.”

Who are the winners and losers?

For US consumers, a stronger dollar means cheaper imported goods in the shops and more affordable holidays abroad.

For everyone else, the picture is less rosy.-fin24

Development Bank of Namibia (DBN) and the Namibia Investment Promotion Board (NIPDB) have formalised their cooperation with a memorandum of understanding (MoU). 

The Bankers Association of Namibia (BAN) was established in 1997 and incorporated as a non-profit association under section 21 of the Companies Act 28 of 2004 as the representative trade association for the commercial banking sector in the country.

The Bank of Namibia (BoN) has filed a High Court application seeking to liquidate Trustco Bank Namibia (TBN), which it claims to be commercially insolvent.

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