Country Report Namibia December 2008

Outlook for 2009-10

• The president, Hifikepunye Pohamba, may not now stand for re-election for a second term of office, but whoever stands as the candidate of the South West Africa People's Organisation (SWAPO) in November 2009 is certain to win.
• Real GDP growth will fall to 1.9% in 2009, owing to the downturn in world economic growth and reduced production due to lower commodity prices.
• In 2010 the forecast upturn in global growth, higher diamond output and a further increase in uranium output will result in GDP growth of 3.7%.
• With the fall in world food and oil prices, average inflation is forecast to decline from an estimated 10.4% in 2008 to 7.4% in 2009 and 5.6% in 2010.
• The current-account surplus will widen slightly to 4.4% of GDP in 2009, compared with an estimated 3.1% of GDP in 2008, driven by a smaller trade deficit owing to the decline in imports due to lower oil prices.
• In 2010 the trade deficit will widen as imports will grow faster than exports because of demand due to the development of new uranium mines; as a result the current-account surplus will narrow to 2.2% of GDP.

Monthly review

• Hidipo Hamutenya, now the elected leader of his party, the Rally for Democracy and Progress, has claimed that the party has won wide support, but its members live under the constant threat of harassment by SWAPO supporters.
• Namibia's third national development plan (NDP3) has been launched. Investment of N$76bn-95bn (US$7.2bn-9bn) is projected over the next five years, but how all the money is to be raised is not made clear.
• Revised national accounts give real GDP growth rates significantly different from previously published data; for example, real GDP growth is put at 7.1% in 2006 and 4.1 in 2007, compared with 3.9% and 3.6% previously.
• Year-on-year inflation in October was little changed at 12%, further confirmation that inflation has peaked.
• A downturn on the global diamond market is likely to lead to a reduction in production by the partly state-owned mining company, Namdeb.
• Because of low international copper prices, Weatherly International is to close two of its smaller copper mines in Namibia and mothball its two main mines. However, Rossing Uranium is holding to its plans for expansion.
• A Belgian-based conglomerate, Forrest Group International, is taking over Canada's Forsys Metals, which owns the Valencia uranium project.
• Namibia's terms of trade strengthened by an average of 9% in 2005-07.

This report covers the following industry codes:
SIC Code: 49;70;60;10
NAICS Code: 22;72;52;212