Weak Rand making Namibian imports expensive
Depreciating currency good for export earnings
Namibia's trade deficit widened to N$4.9 billion in August.
The depreciating South African Rand, to which the Namibia dollar is pegged, is increasing Namibia’s import bill. However, the depreciating currency is good for Namibian export earnings.
According to Simonis Storm, during August, the Rand experienced a significant depreciation of 5.8% against the US dollar, reaching a peak exchange rate of R19.17/$. This depreciation has translated into higher costs for both Namibian consumers and businesses when it comes to importing goods.
On the other hand, the depreciating Rand is anticipated to have a positive impact on Namibia's export earnings, Simonis Storm pointed out.
Data provided by the Namibia Statistics Agency (NSA) indicated that Namibia’s import bill increased to N$12.3 billion in August, compared to N$11.9 billion recorded in the preceding month.
The value of exports decreased to N$7.4 billion in August from N$8.2 billion recorded in July. As a result, Namibia’s trade deficit widened to N$4.9 billion in August from N$3.7 billion recorded in the previous month.
Petroleum oils
Namibia’s import bill was mainly driven by petroleum oils in August, accounting for a share of 22.1% of total import value. The commodity was mostly sourced from Saudi Arabia, Oman and United Arab Emirates.
On the other hand, total export earnings were mainly driven by diamonds, accounting for 31.2% of total exports.
The ministry of mines and energy recently announced a hike in fuel prices. Petrol prices for ULP95 increased by N$1.90, while diesel prices for 50ppm and 10ppm jumped by N$2.40.
In Walvis Bay, the price of petrol is now N$22.88 per litre, while diesel 50ppm costs N$23.15. Diesel 10ppm costs N$23.35 per litre.
South Africa
South Africa emerged as Namibia’s top import market, accounting for 36.1% of total imports in August. Motor vehicles for the transport of goods, which were mainly sourced from South Africa and Finland, were the second highest driver of Namibia’s import bill in the period under review.
Similarly, fuel prices in South Africa increased significantly in October. Fin24 reported that unleaded petrol price (95) increased by R1.14 a litre, while 93 increased by R1.08. Diesel (0.05% sulphur) jumped by R1.96 a litre, while 0.005% sulphur rose by R1.96.
Looking at inflation, South Africa recorded a rate of 4.8% in August, according to Stats SA. Inflation in Namibia stood at 4.7% in August. The Bank of Namibia (BoN) projects inflation to average 5.6% in 2023.
Real gross domestic product (GDP) growth is projected to moderate downwards to 3.3% in 2023, from 4.6% registered in 2022.
Risks to domestic growth are predominantly in the form of ongoing monetary policy tightening globally and costs of key import items that are likely to remain high for the entire forecast period, BoN [email protected]
According to Simonis Storm, during August, the Rand experienced a significant depreciation of 5.8% against the US dollar, reaching a peak exchange rate of R19.17/$. This depreciation has translated into higher costs for both Namibian consumers and businesses when it comes to importing goods.
On the other hand, the depreciating Rand is anticipated to have a positive impact on Namibia's export earnings, Simonis Storm pointed out.
Data provided by the Namibia Statistics Agency (NSA) indicated that Namibia’s import bill increased to N$12.3 billion in August, compared to N$11.9 billion recorded in the preceding month.
The value of exports decreased to N$7.4 billion in August from N$8.2 billion recorded in July. As a result, Namibia’s trade deficit widened to N$4.9 billion in August from N$3.7 billion recorded in the previous month.
Petroleum oils
Namibia’s import bill was mainly driven by petroleum oils in August, accounting for a share of 22.1% of total import value. The commodity was mostly sourced from Saudi Arabia, Oman and United Arab Emirates.
On the other hand, total export earnings were mainly driven by diamonds, accounting for 31.2% of total exports.
The ministry of mines and energy recently announced a hike in fuel prices. Petrol prices for ULP95 increased by N$1.90, while diesel prices for 50ppm and 10ppm jumped by N$2.40.
In Walvis Bay, the price of petrol is now N$22.88 per litre, while diesel 50ppm costs N$23.15. Diesel 10ppm costs N$23.35 per litre.
South Africa
South Africa emerged as Namibia’s top import market, accounting for 36.1% of total imports in August. Motor vehicles for the transport of goods, which were mainly sourced from South Africa and Finland, were the second highest driver of Namibia’s import bill in the period under review.
Similarly, fuel prices in South Africa increased significantly in October. Fin24 reported that unleaded petrol price (95) increased by R1.14 a litre, while 93 increased by R1.08. Diesel (0.05% sulphur) jumped by R1.96 a litre, while 0.005% sulphur rose by R1.96.
Looking at inflation, South Africa recorded a rate of 4.8% in August, according to Stats SA. Inflation in Namibia stood at 4.7% in August. The Bank of Namibia (BoN) projects inflation to average 5.6% in 2023.
Real gross domestic product (GDP) growth is projected to moderate downwards to 3.3% in 2023, from 4.6% registered in 2022.
Risks to domestic growth are predominantly in the form of ongoing monetary policy tightening globally and costs of key import items that are likely to remain high for the entire forecast period, BoN [email protected]
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