NAMIBIA’S economy displayed resilience in the third quarter of 2023, largely due to the strength of its primary industries – particularly mining and agriculture.
This is according to an overview by Simonis Storm Securities, which says the economy continues to demonstrate growth rates not seen in a decade, as indicated by the latest data for the third quarter of 2023 showing robust economic expansion of 7,2% – an increase of N$2,6 billion from N$36,1 billion in the third quarter of 2022.
“This marks an improvement from the 5,5% growth rate recorded in the second quarter of 2023 and the 5,4% recorded in the third quarter of 2022.
“Notably, this quarter represents the 10th consecutive period of growth since the onset of the pandemic. In nominal terms, the economy also expanded to N$59,7 billion in the third quarter – from N$52,9 billion in the third quarter of 2022 – reflecting a year-on-year increase of 12,9%,” Simonis says.
In the third quarter of 2023, the economy exhibited strong resilience, largely due to significant contributions of the mining and quarrying sector, as well as agriculture and forestry, although others such as health, public administration, defence, construction, and manufacturing faced contractions.
The mining and quarrying sector was particularly impactful, contributing 6,6 percentage points to the overall gross domestic product (GDP) growth.
Agriculture and forestry, along with wholesale and retail trade, each added 0,5 percentage points.
This cumulative effect resulted in a total GDP growth of 7,2% for the third quarter of 2023. In contrast, the manufacturing sector detracted from the overall economic performance, contributing a negative one percentage point to GDP.
According to Simonis, primary industries like mining and quarrying demonstrated substantial growth in the third quarter of 2023, registering a 51,7% increase from the 30,6% growth observed in the third quarter of 2022.
This robust growth was primarily fuelled by expansions in metal ore mining, enhanced uranium extraction, and consistent investments in mineral exploration.
Despite this overall uptrend, the diamond mining subsector experienced a slight setback, recording a 0,2% decline – its first in nine quarters, which can be attributed to a dip in production volumes.
In contrast, the uranium subsector witnessed a substantial growth of 29,9%.
Furthermore, the category labelled ‘other mining and quarrying’ saw an impressive surge of 167%, while mining exploration experienced a remarkable increase of 315,8%, according to the Namibia Statistics Agency.
The metal ores segment also reported 33,4% growth, largely driven by increased gold production. These varying trends within the sector highlight its vulnerability to shifts in production scales and the impact of external investment flows.
The agriculture and forestry sector witnessed a notable recovery, with real value added growing by 19,9% – a notable rebound from the 10,6% decline seen in the third quarter of 2022.
This growth was largely driven by a robust 25,6% increase in livestock farming, while crop farming showed no growth, remaining stagnant at 0,0%.
The livestock subsector’s enhanced performance is attributable to heightened slaughtering activities and a significant rise in live cattle exports.
In the fishing sector, a modest growth of 1% was observed, primarily due to a 15,3% increase in hake landings, notwithstanding a slight 0,6% decrease in horse mackerel landings.
According to Simonis, the performance of secondary industries raises concerns, especially in manufacturing and construction.
The notable declines in subsectors such as basic metal and diamond processing may be tied to global market dynamics, commodity price fluctuations, or internal production challenges.
The construction sector, despite its potential as a catalyst for employment and growth, registered a decline, indicating a potential slowdown in infrastructure development, possibly due to fiscal constraints or project delays.
The manufacturing sector experienced a contraction of 8,7% in real GDP growth in the third quarter of 2023, a stark contrast to the 11,2% increase seen in the third quarter of 2022.
However, subsectors such as meat processing, fish processing, textiles, and other food products displayed growth.
In the third quarter of 2023, tertiary industries showcased a growth of 2,2%, with significant contributions stemming from sectors such as wholesale and retail, transport, hotels and restaurants, as well as financial services.
The wholesale and retail trade sector experienced a growth of 6,1% in the third quarter of 2023. This represents a deceleration from the 11,3% growth observed in the same quarter of the previous year.
Notably, wholesale and retail trade sales are projected to have risen at the outset of the fourth quarter of 2023, bolstered by Black Friday sales and increased spending in anticipation of the festive season.
However, it’s important to note that consumer spending remains significantly hampered by the prevailing high inflationary environment.
Growth in the hotels and restaurants sector was recorded at 6,4%, a trend largely attributed to an uptick in travel and competitive sport events.
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