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Namibia’s second quarter GDP contracts by 11.1%
Namibia’s second quarter GDP contracted by 11.1 per cent, this was in line with market expectations despite a surge in activity in its Agriculture sector. A slew of African countries will also release GDP numbers this week with eyes on Kenya, Botswana and Mauritius. Ridle Markus, Africa Strategist, Absa Corporate and Investment Banking joins CNBC Africa for more.
Mon, 28 Sep 2020 11:10:56 GMT
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- Namibia's second quarter GDP contracts by 11.1%, in line with market expectations despite growth in the agriculture sector.
- Kenya, Mauritius, and Botswana are set to release GDP numbers this week, with expectations of contractions in various degrees.
- Zambia faces financial challenges with a budget deficit of over 11.7% of GDP but is making efforts to attract foreign investment in the mining sector.
The second quarter GDP in Namibia contracted by 11.1%, in line with market expectations despite a surge in the agriculture sector. The coming week is set to be a busy one for African countries as they prepare to release their GDP numbers. All eyes are on Kenya, Botswana, and Mauritius as investors and analysts eagerly anticipate the impact of the global pandemic on these economies.
Ridle Markus, an Africa strategist at Absa Corporate and Investment Banking, shed light on the upcoming GDP figures to be revealed this week. Kenya, after a 0.4% growth in the third quarter, is expected to show a contraction of a few percentage points in the second quarter. On the other hand, Mauritius, which had already contracted by 2% in the previous quarter, is likely to see a double-digit contraction due to the halt in tourism activities. Botswana, known for its diamond industry, is also expected to face a significant contraction of around 10 to 12% in the second quarter.
Zambia, on the other hand, is facing its own set of challenges. With the recent request for the suspension of coupon payments and a budget deficit of over 11.7% of GDP, the country is in a precarious financial position. The impact of reduced revenues due to lockdown measures is clearly visible in the budget numbers presented. However, there are also efforts to attract foreign investment, particularly in the mining sector, by allowing mining royalties to be deducted from company taxes. This move could potentially make Zambia more attractive to investors and provide relief to the struggling mining sector.
The African continent as a whole is reevaluating its tax policies to make the mining sector more appealing for investment while balancing the need to protect government revenues. Many countries are looking at ways to stimulate economic growth in the face of the ongoing pandemic and its impact on various industries. The coming GDP figures from Kenya, Mauritius, and Botswana will provide valuable insights into the economic landscape in these countries and the challenges they are currently facing.
In conclusion, the next week will be crucial for African economies as they reveal their second-quarter GDP figures. The contraction in Namibia, coupled with the challenges in Zambia and the potential opportunities in the mining sector, highlights the varied economic situations across the continent. Investors and analysts will closely monitor these developments to understand the trajectory of African economies in the coming months.
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