The Namibian Monetary Policy committee left the country’s repo rate unchanged at 5.5 per cent in a bid to have an accommodative monetary policy to support the country’s economy.
“I think the rate was kept at a steady pace at this point in time because of certain factors in the economy supporting good growth. The minister, who tabled her budget in parliament yesterday, also spoke about working very closely with the bank of Namibia as well,” Wikus Fourie, Sanlam Namibia business development manager of collective investments, told CNBC Africa.
“So I think it was a unanimous decision at this point in time where you can see they’ve really come out and said we are going to keep the rate steady.”
The Namibian interest rate often tracks that of South Africa, and South Africa has seen a recent rate hike, with suggestion that there could be another rate hike on the cards. The Namibian dollar is also pegged to the South African rand.
“We are expected to follow in South Africa’s shoes but not because we are South Africa’s little brother. I think that’s the message that the Bank of Namibia wants to send, that we are out own economy,” Fourie explained.
“We are seeing signs of Namibia’s economy really finding its own in the world economy. We have a projected growth rate for 2014 for round about five per cent, which is almost double that of South Africa.”
Fourie added that more inputs and factors influencing South Africa’s decision on the Monetary Policy Committee meeting are also become a lot less important in Namibia’s sectors. Namibia however expects to keep it that way as a means of protecting their capital and preventing any capital flight. Its large sectors are also expected to thrive from the country’s independent growth.
“Construction is expected to deliver the bulk of the growth in the economy this year, with two large mines being constructed at this point in time, which will be one of the largest uranium mines in the world. Once finished, the capital investment into that mine would be round about 20 per cent of Namibia’s GDP,” said Fourie.
“We also see some big infrastructure spending from the government as well, and we also expect agriculture to pick up this year as well. After a sluggish year last year, due to a very severe drought we had in the past 12 months, we’ve seen some good rains in some areas. We expect that to also carry through on agriculture, and especially the meat prices in the near future.”