THE BRIEF

A monthly wrap-up of News Worth Knowing

BON MAINTAINS REPO RATE UNCHANGED AT 7.75%

The Bank of Namibia’s Monetary Policy Committee (MPC) has decided to maintain the Repo rate unchanged at 7.75%, citing sufficient reserves and stable domestic economic activity throughout 2023 and early 2024.

Bank of Namibia Governor Johannes !Gawaxab said that as of March 2024, Namibia’s international reserves decreased to N$54.3 billion from N$55.8 billion in January 2024, attributed to commercial bank outflows and government payments.

“This remains sufficient to sustain the currency peg between the Namibia Dollar and the South African Rand while meeting the country’s international financial obligations. The import cover, excluding hydrocarbon exploration-related imports, however, stood higher at 4.3 months,” he said.

“March 2024 saw inflation at 4.5%, down from 5.4% in January. Predictions suggest a further decrease to 4.9% in 2024, with geopolitical tensions and rainfall uncertainty influencing this slight adjustment,” !Gawaxab said.

STANDARD BANK PROPOSES ELIZABETH BAY’S DEVELOPMENT INTO NAMIBIA’S ENERGY HUB

Standard Bank has unveiled a proposal to convert Elizabeth Bay into an Energy Park. The move is seen as crucial to stimulate infrastructure development and tap into Namibia’s resource potential.

“The primary objective of the Elizabeth Bay Energy Park (EBEP) is to harness the region’s abundant wind and solar

resources. This will enable efficient production, storage, and exportation of energy products such as LNG and green hydrogen,” said Paul Eardley Taylor, Head of Oil and Gas for Southern Africa at Standard Bank.

The plan also encompasses future activities like the processing of associated gas from deep offshore fields and the development of upstream oil projects.

NAMIBIA RANKED 6TH MOST CONNECTED COUNTRY WITHIN SUB-SAHARAN AFRICA

Namibia is highly ranked in Sub-Saharan African connectivity, ranking sixth out of 43 countries in the DHL 2024 Global Annual Connectedness report, surpassing established economies like Senegal, Angola, Nigeria, and Kenya.

The index is for metrics like internet access and mobile network coverage. “Namibia has made significant progress in global connectedness, moving up 27 spots to rank 102 out of 181 countries globally in 2023. I wish to emphasise that while Namibia is advancing in the Global Connectedness Index, more efforts are needed to thrive in the competitive global landscape,” said Dirk van Doorn, Managing Director of DHL Namibia.

Although the share of global trade in world GDP reached a record high in 2022 before a modest decline in 2023, trade growth is expected to accelerate in 2024. Information flows globalisation has surged over the last two decades, but recent data shows a stall, partly due to US-China tensions and restrictions on international data flows.

ANNUAL INFLATION PEAKS IN NAMIBIA’S ENTERTAINMENT, DINING SECTORS

The Namibia Statistics Agency (NSA) says recreation and culture witnessed a significant 9.6% increase in annual inflation in March 2024. NSA said similarly, hotels, cafés, and restaurants experienced an 8.0% inflation rate, encompassing various aspects of hospitality services and dining experiences.

According to the Consumer Price Index the annual inflation rate for March 2024, stood at 4.5% compared to 7.2% recorded in March 2023, depicting a downward trend since January 2024.

Meanwhile, the alcoholic beverages and tobacco category saw a notable jump in inflation rates, reaching 6.8%, underscoring escalating prices of alcoholic products and tobacco items.

While in March 2024, the inflation rate for food and nonalcoholic beverages stood at 4.9 per cent, compared to the 14.6 per cent observed in March 2023. Housing, water, electricity, gas, and other fuels increased to 3.4 per cent during March 2024 compared to 3.0 per cent observed in March 2023.

Transport experienced a decrease year-on-year (y-o-y) to 4.3% compared to 9.2% while the operation of personal transport equipment increased by 3.9% compared to an increase of 12.5% and public transportation services by 0.6% while last year it had increased by 1.0% in the same month.

NAMIBIA NOW AFRICA’S SECOND-FASTEST-GROWING FDI DESTINATION

Namibia has emerged as Africa’s second-fastest-growing market and fifth in the world in terms of foreign direct investment (FDI), with GDP growth forecasted at 2.7% in 2024, according to FDI Intelligence.

This comes as the Bank of Namibia (BoN) stated that the oil and gas sector yielded N$33.4 billion in foreign direct investment (FDI) inflows between 2021 and 2023.

According to the Bank’s Governor, Johannes !Gawaxab, these investments, with the potential to double the country’s gross domestic product (GDP), resulted from a massive oil discovery in 2022 and will position Namibia among the top 15 oil-rich countries globally.

Similarly, Namibia recorded a surge in foreign direct investment (FDI) during the first two quarters of 2023, reaching a record N$19 billion, attributed mainly to oil and gas investments and the acquisition of Namibia Breweries by Heineken.

The figure accounted for 16.83% of the country’s gross domestic product (GDP), surpassing any annual inflow on record, according to Catalyst Investment Managers.