Country Report Namibia March 2009

Outlook for 2009-10

• Hifikepunye Pohamba, will stand as SWAPO's candidate at the elections in November 2009. He is certain to win re-election as president, although in the parliamentary election SWAPO's majority may be reduced.
• Real GDP growth will decline to 0.8% in 2009, as a result of the world economic downturn. In 2010, with the upturn in global demand, higher diamond and 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 10.3% in 2008 to 7% in 2009 and 5.6% in 2010.
• The trade deficit will narrow in 2009 as imports fall faster than exports owing to sharply lower prices for oil imports, and the services surplus will widen because of lower import volumes in the economic downturn.
• The current-account surplus in 2009 will widen only to 1.1% of GDP in 2009, as a fall in transfers from the Southern African Customs Union will offset the gains on the trade and services accounts.

Monthly review

• It now seems clear that Mr Pohamba will stand as SWAPO's presidential candidate in November, after two leading party members, who had been spoken of as his possible rivals for the nomination, endorsed his candidacy.
• The results of a public opinion poll suggest that, at the general election, opposition parties may increase their representation in the National Assembly.
• The Bank of Namibia has indicated that the budget for fiscal year 2009/10 (April-March) will be expansionary, providing a fiscal stimulus for Namibia's slowing economy through a substantial increase in government spending.
• Old Mutual forecasts that real GDP will contract by 1.6% in 2009 because of a sharp cutback in diamond production. However, the Economist Intelligence Unit believes that the cutback will be smaller and forecasts 0.8% GDP growth.
• Year-on-year inflation rose to 11.6% in January, from 10.6% in December, but according to the Bank of Namibia this was just a temporary exception to the continuing trend of falling inflation.
• The overall index of the Namibian Stock Exchange fell by 55% in the year to end-February; the index of local companies fell by 15%.
• The Canadian courts have approved the takeover of Forsys Metals, the holder of the licence for the Valencia uranium project; but speculation continues over who is backing the purchaser, George Forrest International.
• A Namibian is to be chairman of Australia's Extract Resources, the holder of the licence for the Rossing South uranium project; another is to join the board.

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