Billions boost growth hopes

NAMIBIA’S light at the end of the recession tunnel is projects of at least N$51 billion planned until 2013 which, according to estimates, will drive economic growth back into positive, healthy territory.

Ace economist Robin Sherbourne of the Old Mutual Namibia Group predicts that these mostly private-sector projects, in which some N$15 billion has already been invested, will help ensure that Namibia only remains in recession this year and that its average economic growth for the next five years will come close to four per cent a year.
Sherbourne told a business breakfast meeting of the Namibian Chamber of Commerce and Industry (NCCI) last week that growth in the gross domestic product (GDP) is likely to plummet to minus 1,6 per cent this year. However, next year should see growth of 4,2 per cent, followed by forecasts of 7,4 per cent in 2011, 4,7 per cent in 2012 and 4,5 per cent in 2013.
Breaking down the multibillion-dollar boost in investment, Sherbourne said Telecelglobe’s take-over of Cell One cost N$580 million, Ohlthaver & List (O&L) pumped N$80 million into their dairy superfarm and Paladin invested N$400 million in Phase II of the Langer Heinrich uranium mine.
Some N$3,2 billion have been spent the Caprivi Inter-Connector, linking the electricity networks of Namibia, Zambia and Zimbabwean. Ohorongo Cement and the Trekkopje Uranium Mine saw investments of N$2,8 billion and N$4,5 billion respectively, while Areva wrote a cheque for N$1,8 billion for a desalination plant for its Trekkopje mine. Weatherly has set aside N$80 million to upgrade the copper smelter at Tsumeb.
Meanwhile, United Africa has spent N$200 million on the construction of the luxurious Namundjebo Plaza Hotel in Windhoek, and Afrodite Beach, the exclusive resort development near Walvis Bay, will cost N$1,5 billion.
Work on all these projects have already started, while the tender for a fourth turbine at the Ruacana Hydro Power Station is out, Sherbourne said.
In the pipeline are N$300 million for O&L’s new Strand Hotel at Swakopmund, N$250 million for a 20 megawatt diesel peaking plant at Langer Heinrich, N$700 million for Namcor’s fuel storage facility at Walvis Bay, N$220 for Telecom Namibia’s to join an undersea fibre optic-cable network, N$1,2 billion to upgrade Namport, another N$1 billion for Zizabona, the power project between Namibia, Botswana, Zambia and Zimbabwe, N$400 million for the Lüderitz Waterfront, N$900 million for Teal Exploration and Mining’s gold mine at Otjikoto, N$3 billion for Forsys’ Valencia Uranium Mine, N$2,1 billion for the Lower Orange River Hydro Plant, N$3 billion for Bannerman’s Etango Uranium Mine near Rössing, N$4,5 billion for Extract Resources’ Rössing South Uranium Mine, N$8 billion for the gas-to-power plant for Kudu Gas, and N$10 billion for a 500 megawatt hydro plant at the Baines project.
Sherbourne said he also bases his assumptions for better economic growth on an expected modest growth in agriculture and a small rise in quotas of controlled species of fish. He only expects diamond production to recover to 1,5 million carats in 2011, as dampened consumer in especially the United States of America will keep diamond production at the low level of just one million carats in 2009 and 2010.
A steady production rise from 3,7 million pounds to six million pounds of uranium oxide at Langer Heinrich and Rössing Uranium’s expansion to 5,5 tonnes, complemented by output from the Trekkopje and Valencia mines in 2010 and 2011 respectively, will also contribute to increased GDP growth, Sherbourne said.
Ohorongo Cement will come online early in 2011, with production at Otjikoto Gold Mine expected later that year. Weatherly Mining Namibia’s operations should also kick off in 2011.
Sherbourne furthermore predicts growth in the telecoms sector at competition between MTC and Cell One picks up and the new telecoms act is passed. He also expects increased strong spending by Government, state-owned enterprises (SOEs) and the private sector, complemented by growth in the construction sector.
Tourism, although subdued this year, is likely to pick during 2010, the Soccer World Cup year, continuing in 2011 and spurring economic growth, Sherbourne forecast.
jo-mare@namibian.com.na