21 Oktober 2021 | Wirtschaft

!Gawaxab concerned about weak credit uptake

Growth in private sector credit extension moderated to an average of 2.5% for the first eight months of 2021, lower than the average of 4.1% recorded during the same period in 2020.

Given the expectation of persistent weak credit demand, current low interest rates remain favourable, with no need to hike from a PSCE perspective. Simonis Storm


It is expected that when interest rates are low, individuals and businesses will approach commercial banks to seek for credit in order to invest in business activities and eventually boost economic growth.

However, the prevailing uncertainties caused by the Covid-19 pandemic are making the low interest rate environment less effective in stimulating growth due to low consumer and business confidence.

On a positive note, low interest rates provide relief to indebted households and businesses due to cheap servicing costs.

The Bank of Namibia (BoN) decided to leave the repo rate unchanged at its historic low of 3.75%. That means the prime lending rates for local commercial bank will also remain at 7.50%.

Speaking at the monetary announcement yesterday, Johannes !Gawaxab, Governor of the central bank pointed out that Namibia's real gross domestic product (GDP) improved in the second quarter of 2021, while economic activity remained subdued year-to-date. The rate of inflation continued to increase, while growth in Private Sector Credit Extension (PSCE) declined. The stock of international reserves remained sufficient to support the currency peg and meet the country's international financial obligations.

Growth in private sector credit extension (PSCE) moderated to an average of 2.5% for the first eight months of 2021, lower than the average of 4.1% recorded during the same period in 2020. The slowdown in PSCE was due to lower demand for credit by both businesses and households, as a result of slow domestic economic activity during the review period, he added.

According to Simonis Storm (SS), absence of excessive borrowing placing upward pressure on asset price inflation and consumption spending in Namibia, the low interest rate environment does not pose any risk to financial sector stability or inflation.

Given the expectation of persistent weak credit demand, current low interest rates remain favourable, with no need to hike from a PSCE perspective. “We do not expect an interest rate hike by Bank of Namibia before the end of this year, SS said.


!Gawaxab notes that the 1.6% growth during the second quarter of 2021 was attributed to better growth in sectors such as hotels and restaurants, wholesale and retail trade, fishing, administrative and support services as well as information and communication during the second quarter of 2021.

Economic indicators showed that the domestic economy slowed year-to-date relative to the corresponding period of 2020. The slowdown in economic activity was observed in major sectors such as mining, agriculture, manufacturing, construction, tourism as well as transport and storage.

On the contrary, activities in the wholesale and retail trade sector as well as the telecommunication subsector increased during the review period. Going forward, the domestic economy is expected to grow by 1.4% in 2021 and 3.4% in 2022. Risks to the domestic economic outlook in the near-term remain and include sudden surges in Covid-19 cases with concomitant disruptions to economic activity caused by potential Covid-19 restrictions, he warned.

Supply Constraints

Annual average inflation increased to 3.5% during the first nine months of 2021, compared to 2.2% for the corresponding period in the previous year.

The increase in inflation was mainly driven by base-effects, food and transport categories. This was on account of supply constraints for certain food categories and a rise in international oil prices respectively.

On a monthly basis, overall inflation increased slightly to 3.5% in September 2021 from 3.4 percent in August. Namibia's overall inflation is projected to average around 3.7 percent for 2021, slightly lower than the previous forecast of 3.9%, !Gawaxab said.


As at 30th of September 2021, the stock of international reserves stood at N$45.9 billion compared to N$42.7 billion in July 2021.

The increase in reserves was mainly attributed to the international Monetary Fund (IMF) Special Drawing Rights (SDR) allocation and relative depreciation of the exchange rate. The international reserves, at the above level, were estimated to cover 6.7 months of imports.

At this level, Namibia's international reserves remain adequate to protect the peg of the Namibia dollar to the South African Rand, while meeting the country's international financial obligations, the governor said. [email protected]

Gleiche Nachricht


Renewable energy transition requires investors

vor 20 stunden | Wirtschaft

PHILLEPUS UUSIKUNamibia has the world’s second highest solar irradiation regime, high wind power potential and potential for geothermal and bioenergy developments. The potential for green...

Tritt niemals die Katze - ein Gastbeitrag

vor 20 stunden | Wirtschaft

Treten Sie niemals die Katze!Namibia befindet sich als Entwicklungsland in einer wenig beneidenswerten Lage, seine Wirtschaft ist von der Pandemie hart getroffen. Während sich entwickelte...

Investment bill will deter money

vor 1 tag - 29 November 2021 | Wirtschaft

Jo-Maré Duddy – There is no point in having an investment promotion agency like the Namibia Investment Promotion and Development Board (NIPDB) if it has...

Fuel price hike takes merry out of Xmas

vor 4 tagen - 26 November 2021 | Wirtschaft

Jo-Maré Duddy – The price of petrol and diesel in Namibia will increase by 70c per litre on 1 December, bringing the total fuel price...

Investment trends in a decarbonised world

vor 4 tagen - 26 November 2021 | Wirtschaft

PHILLEPUS UUSIKUEnvironmental, social and corporate governance (ESG) issues are material in determining the long run fundamentals of a business and bring about a different approach...

NSFAF in Schulden

vor 4 tagen - 26 November 2021 | Wirtschaft

Studentenfonds will Kreditbuch verkaufenVon Ogone Tlhage und Katharina Moser, WindhoekIn einer weiteren Anstrengung, ihre ehemaligen Begünstigten zur Rückzahlung der Darlehen zu bewegen, erwägt der Studentenfonds...

Mangel an gesunder Ernährung

vor 4 tagen - 26 November 2021 | Landwirtschaft

Von Lea DillmannWindhoek/RomDie Rede ist von einem Anteil von 0,51 Prozent der Bevölkerung in Namibia, der sich keine gesunde Ernährung leisten kann. Das betrifft immerhin...

Neustart der Passagierschifffahrt

vor 4 tagen - 26 November 2021 | Wirtschaft

Swakopmund/Walvis Bay (er) — Erstmals seit Beginn der COVID-19-Pandemie hat in Walvis Bay ein Passagierschiff angelegt. Die „MS Europa“ ist seit gestern zu Besuch und...

The SEZs a key policy instrument for Nam

vor 5 tagen - 25 November 2021 | Wirtschaft

ELIJAH MUKUBONDAThe Special Economic Zones (SEZs) are a key policy instrument that is deployed to ensure the attainment of economic goals as set out through...

CoW consistent with building plan approvals

vor 6 tagen - 24 November 2021 | Wirtschaft

PHILLEPUS UUSIKUIn October 2021, the City of Windhoek (CoW) approved 271 building plans valued at N$221.7 million of which 200 were additions, commercial and industrial...