Namibia's economic growth outlook over the next 10 years will be underpinned by key sectors such as manufacturing; tourism and construction, which will be supported by the government. We note that utility shortages will continue to weigh on business operations, especially in the mining industry.
Fiscal revenues will remain under strain over the next three years owing to subdued trade receipts. This will prompt a modest cutback in government expenditure over the same period, but this will only gradually ease the country's sizable fiscal deficits in the years ahead.
The Bank of Namibia (BoN) will continue hiking the repo rate in the months ahead in a bid to combat elevated food and utilities price growth, and keep its monetary policy trajectory aligned with the South African Reserve Bank. The BoN will hit the top of its hiking cycle by end-2016, and keep the benchmark policy rate on hold at 7.50% through 2017 as inflation begins to cool.
Namibia's current account deficit will widen to 13.0% of GDP in 2016 due to deterioration in the trade balance. From 2017 onwards, external dynamics will improve, driven by foreign direct investment and a recovery in prices of the country's mined commodities.
The Namibian government's inefficient allocation of public funds during a period when the country is struggling against inadequate housing, water, and employment provision will add to the growing tensions between elements of the population and the government. However, with one of the most stable histories in Sub-Saharan Africa, we do not believe this will escalate to the point where social unrest weighs on the economy.
Major Forecast Changes:
We have revised real GDP growth for 2015 from 3.9% to 5.7% after latest data was released. As a result, we have made minor adjustments to real GDP forecasts over the next 10 years.
Namibia's small, open economy is highly exposed to events on the world stage. While we have incorporated the ongoing global malaise into our economic forecasts, if the situation abroad deteriorates (or conversely, improves) more than we anticipate, it would affect Namibia's overall growth.
Much of the economy remains closely tied to agriculture, and weather poses substantial risks, as illustrated by the ongoing drought, which has threatened yields and food security. Changing weather conditions will affect growth, inflation and trade.
Namibia's statistics has been subject to multiple revisions and this weighs on overall data for the country.
|e/f=BMI estimate/forecast. Source: National Sources/BMI|
|Real GDP growth, % y-o-y||6.3||5.7||4.1||4.5|
|Nominal GDP, USDbn||12.8||11.5||10.4||11.1|
|Consumer price inflation, % y-o-y, eop||4.7||3.7||6.7||5.7|
|Exchange rate NAD/USD, eop||11.55||15.48||15.80||16.75|
|Budget balance, % of GDP||-5.6||-6.9||-5.0||-4.1|
|Current account balance, % of GDP||-8.7||-10.7||-13.0||-12.0|
The Namibia Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in The Namibia and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..
An influential new analysis of The Namibia's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).
- Forecast the pace and stability of The Namibia's economic and industry growth through end-2017.
- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
- Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
- Contextualise The Namibia's country risks against regional peers using BMI's country comparative Risk Ratings system.
- Evaluate external threats to doing business inThe Namibia, including currency volatility, the commodity price boom and protectionist policies.
BMI provides our fully independent 5-year forecasts for The Namibia through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.
Economic Outlook Contents
The Namibia Country Risk Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.
Key Areas Covered:
- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
- BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.
- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
- Balance of Payments - trade and investment, current and capital account.
- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
- Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
- Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
- Foreign Direct Investment - approvals, inflows and climate.
- External Debt - debt profile (short and long-term plus public and private sector exposure).
- Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.
- Rely upon BMI's 100% independent forecast scenarios for The Namibia and underlying assumptions - we take no advertising and are privately-owned.
- Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on The Namibia, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
- Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.
What are the political risks to doing business in The Namibia over the next 5-years?
BMI's The Namibia country Risk Ratings evaluate the short- and medium-term threats to political stability.
Political Outlook Contents
- SWOT Analysis for the The Namibian Market - Political Strengths, Weaknesses, Opportunities and Threats facing The Namibia.
- Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for The Namibia's risk are compared with regional and global averages.
- Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
- Benchmark The Namibia's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
- Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
- Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.
Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for The Namibia, benchmarked against ratings for regional neighbours.
Country Competitiveness - Competitiveness of The Namibia's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.
Business Environment Contents
- Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
- Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
- Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.
- Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
- Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.