IJG Securities, a Namibian financial services company, expects the country to perform relatively well from a macroeconomic point of view as a result of prospects in construction.
“Construction is definitely the big one for 2014 and it was actually a key industry for 2013 as well. We saw significant growth in the construction industry last year as a result of a number of huge projects, both in the private and the public sector. Certainly [in] 2014 we expect to see more of the same,” IJG Securities research analyst, Rowland Brown, told CNBC Africa.
According to research specialists, Market Research, real construction industry value growth in 2013 and 2014 in Namibia has been forecasted at 17.1 per cent and 16.3 per cent respectively.
However, Brown added that construction is not the only industry where growth is expected in 2014, following a ‘below trend’ growth year in 2013 as a result of drought conditions across Namibia.
“We expect to see a strong rebound in agriculture after fairly weak growth last year on account of the drought conditions that we had across the country and generally a big decline in livestock inventories, and some slight decline in horticultural, particularly agronomic production of certain grains,” he indicated.
“For this year we also expect to see a rebound in tourism but not huge, strong growth. The other sector is wholesale and retail trade where we’ve seen expansive fiscal and monetary policy over the past few years and we expect that to help support growth in wholesale and retail trade as well.”
Namibia’s expansive monetary and fiscal policy is also expected to remain in place in 2014 however these macroeconomic policies could put pressure on the Bank of Nigeria to increase rates.
“The conservative view is that the monetary policy position will remain unchanged but my personal view, and the view of IJG, is that we may see a rate hike this year in Namibia. Generally, our rates have followed South Africa’s very closely; historically the reasoning behind that has been very similar – economic conditions in the two countries as well as the fixed exchange rate between the two,” Brown said.
“Now, we’re starting to see very different economic conditions across the two countries and, as a result, and certainly as a result of these expansive fiscal and monetary policies, a lot of pressure has been put on our balance of payments, on our reserves and given that the primary mandate of the Bank of Namibia is to maintain the currency peg with the South African currency, there’s a high chance that we may see an interest rate hike in Namibia towards the end of the year.”