Mining still economy’s gem

Investors injected nearly N$60 billion into the Namibian economy last year, most of it into the mining and exploration industries.

Figures released yesterday by the Namibia Statistics Agency (NSA) show that the country's gross fixed capital formation (GFCF) last year was approximately N$25 billion, or 74% more than in 2022. GFCF is the overarching economic term for investment.

Out of the total GFCF of nearly N$59.8 billion, almost N$34.2 billion flowed into mining and exploration.

Statistician-general Alex Shimuafeni attributed the increase in GFCF to accelerated investment spending in exploration industries in the oil and gas sector. Namibia is increasingly seen as one of the prime candidates for new oil and gas sources.

The latest GFCF figures recall 2015 when construction of several new mines, including Husab, also fuelled investment in Namibia. This is the first time since 2015 that GFCF has surpassed the N$40 billion mark.

In real terms, figures adjusted for inflation, GFCF last year amounted to about N$43.4 billion. In 2015, it was almost N$45.5 billion. Mining GFCF last year was approximately N$27.9 billion compared to N$17.4 billion in 2015.

GDP

Namibia's gross domestic product (GDP) last year was nearly N$151.4 billion in real terms – about N$6 billion more than in 2022. This figure was used to determine the economic growth rate of 4.2% for 2023.

At market prices, Namibia's GDP amounted to about N$227.8 billion compared to nearly N$205.6 billion in 2022.

Mining accounted for about N$19.1 billion of Namibia's real GDP last year. Although diamonds, with a contribution of nearly N$10.7 billion, are still the cornerstone of mining, the sector's year-on-year (y/y) growth was not nearly as impressive as that of uranium, metal ores and ‘other mining’.

Diamonds' GDP contribution grew y/y by 10.9%. Uranium and metal ores, on the other hand, saw growth rates of 24.5% and 28.9% respectively. Uranium contributed approximately N$3.1 billion to the real GDP pot, while metal ores' contribution was about N$1.6 billion.

‘Other mining and quarrying’, which includes activities in the oil and gas sector, surged y/y by 37.2% and contributed more than N$3.7 billion to the real GDP.

Consumer, tourism

Nearly N$14.3 billion was spent last year in retail and wholesale.

Although N$776 000 - or 5.8% - higher than in 2022, this expenditure is still significantly lower than the levels of N$16 billion in 2015 and 2016. Namibia fell into a recession after 2016.

The latest figures, however, are significantly better than the N$11 billion and N$12 billion plus from the pandemic in 2020 and 2021 respectively.

Hotels and restaurants, a gauge for tourism, are still recovering from the Covid-19 impact and contributed about N$2.4 billion to the GDP.

However, this growth of 4.8% y/y was the weakest performance since 2020 when growth plummeted to -30.8%.

Construction, manufacturing

Construction spent its eighth year in recession in 2023.

Negative growth of 0.2% was recorded, a significant improvement over the -18.4% of 2022 and the low of -41.1% of 2016.

The sector's GDP contribution last year was a meagre N$1.98 billion, a fraction of the nearly N$8.1 billion in 2015.

With growth of -3.2%, manufacturing is also back in recession after a positive performance of 5.2% in 2022. The sector contributed nearly N$15.7 billion to the economy, significantly less than the N$18.8 billion in 2019.