Namibia economy to grow 5.7 pct in 2015, driven by exports

WINDHOEK (Reuters) – Namibia’s economy is expected to grow by 5.7 percent in 2015, driven by exports in the continent and abroad as well as a jump in domestic economic activity, Finance Minister Calle Schlettwein said in a budget speech on Tuesday.

Schlettwein said government revenues increased by 28.6 percent to Namibian $53.91 billion ($4 billion) in 2014/2015, compared with the previous year, and projected the budget deficit would be 5.3 percent of gross domestic product.

“Growth in 2014 was anchored by the strong expansion of output in secondary industries, on the back of a booming construction activity and the recovery in the primary industry sector,” Schlettwein said addressing the Namibian parliament.

Despite brisk growth, a high rate of unemployment, currently at 28.1 percent, coupled with a narrow production base necessitating a large import bill were obstacles requiring bold decisions to overcome, the minister said.

“This state of affairs limits the job creation potential, continually drives our trade balance deeper into deficit, exerts pressure on the stock of international reserves and renders the economy highly vulnerable to external shocks.”

Schlettwein’s ministry said subdued growth in neighbouring South Africa, the continent’s most advanced but underperforming economy, posed a serious challenge to Namibia’s plans to expand exports.

Earlier in the month Moody’s affirmed Namibia’s investment grade Baa3 rating.

The rating agency said Namibia’s strong growth record, sound public finances and low susceptibility to political and financial risk supported favourable near-term growth prospects.

($1 = 12.1433 Namibian dollars)