Agribank laments 'difficult year'
Agribank CEO Sakaria Nghikembua says the continued contraction in government spending, the constant reliance on public funds for economic activities, combined with unfavourable climatic conditions, have exacerbated the recession, making it difficult for the economy to recover.
Namibia must invest more in climate resilience and create water networks across the country to minimise the impacts of droughts.
This is according to Agribank CEO Sakaria Nghikembua, who said the weak growth in the retail and wholesale, construction and manufacturing sectors, coupled with the prolonged drought, created a difficult year for the Namibian economy.
He said the growth momentum in the domestic economy has continued to be negative, overall, and has consistently pitched below levels last seen in 2008, with incoming gross domestic product (GDP) data for 2019 showing the lowest quarterly growth rates of -2.9% and -2.6% in the first and second quarters, respectively.
Looking ahead, Nghikembua said local economic pundits expect GDP to increase by 0.9% and 1.5% in 2020 and 2021, respectively, mainly on the back of better rainfall prospects for the 2019/20 rainy season that could result in improved agricultural sector performance.
“This is a huge conditional leap of faith as it would take years for the sector to recover. Furthermore, the mega road and infrastructure projects expected in 2020 could potentially restore growth in the construction industry.”
Nghikembua said strategically the country should invest more in climate resilience.
According to him, Namibia should invest in tapping into water resources wherever they are located. “We should create countrywide water networks. We should make this water available for year-round irrigation to citizens across the country at affordable levels. This will ensure we minimise the impacts of drought in any one year. It will also ensure that we progressively reduce poverty across society over time.”
Nghikembua said the continued contraction in government spending, the constant reliance on public funds for economic activities, combined with unfavourable climatic conditions, have exacerbated the recession, making it difficult for the economy to recover.
According to him, the extended low growth environment appears unique to Namibia's growth path.
He said economic recovery can only result from collective action by the private and public sectors. Nghikembua said private investment needs to happen to allow public resources to be applied to the creation and sustenance of public necessities such as education and health, social business and transport infrastructure.
“Given the enormous challenges the country is facing - from climate change to the urgency to lift people out of poverty, especially the youth - we now, more than ever, need all hands on deck. We need government, business, labour and all stakeholders to collaborate to improve economic prospects, stimulate growth, create jobs and alleviate poverty.”
According to Nghikembua, each stakeholder must intensely ask themself what they are contributing and doing for youth unemployment and for the empowerment of women.
He said Agribank will certainly continue to ask these questions and implement new action plans to make tangible contributions to this end.
“It is time we all took personal responsibility for the recovery of our economy and well-being of all Namibians.”
Nghikembua said Agribank has continued to advance loans and provide training and mentorship services to farmers, thereby helping create jobs and mitigating against poverty.
“We have also maintained credible financial performance, which helps to ensure we place the bank on a sustainable trajectory. We will intensify these efforts in the new year.”
ELLANIE SMIT
This is according to Agribank CEO Sakaria Nghikembua, who said the weak growth in the retail and wholesale, construction and manufacturing sectors, coupled with the prolonged drought, created a difficult year for the Namibian economy.
He said the growth momentum in the domestic economy has continued to be negative, overall, and has consistently pitched below levels last seen in 2008, with incoming gross domestic product (GDP) data for 2019 showing the lowest quarterly growth rates of -2.9% and -2.6% in the first and second quarters, respectively.
Looking ahead, Nghikembua said local economic pundits expect GDP to increase by 0.9% and 1.5% in 2020 and 2021, respectively, mainly on the back of better rainfall prospects for the 2019/20 rainy season that could result in improved agricultural sector performance.
“This is a huge conditional leap of faith as it would take years for the sector to recover. Furthermore, the mega road and infrastructure projects expected in 2020 could potentially restore growth in the construction industry.”
Nghikembua said strategically the country should invest more in climate resilience.
According to him, Namibia should invest in tapping into water resources wherever they are located. “We should create countrywide water networks. We should make this water available for year-round irrigation to citizens across the country at affordable levels. This will ensure we minimise the impacts of drought in any one year. It will also ensure that we progressively reduce poverty across society over time.”
Nghikembua said the continued contraction in government spending, the constant reliance on public funds for economic activities, combined with unfavourable climatic conditions, have exacerbated the recession, making it difficult for the economy to recover.
According to him, the extended low growth environment appears unique to Namibia's growth path.
He said economic recovery can only result from collective action by the private and public sectors. Nghikembua said private investment needs to happen to allow public resources to be applied to the creation and sustenance of public necessities such as education and health, social business and transport infrastructure.
“Given the enormous challenges the country is facing - from climate change to the urgency to lift people out of poverty, especially the youth - we now, more than ever, need all hands on deck. We need government, business, labour and all stakeholders to collaborate to improve economic prospects, stimulate growth, create jobs and alleviate poverty.”
According to Nghikembua, each stakeholder must intensely ask themself what they are contributing and doing for youth unemployment and for the empowerment of women.
He said Agribank will certainly continue to ask these questions and implement new action plans to make tangible contributions to this end.
“It is time we all took personal responsibility for the recovery of our economy and well-being of all Namibians.”
Nghikembua said Agribank has continued to advance loans and provide training and mentorship services to farmers, thereby helping create jobs and mitigating against poverty.
“We have also maintained credible financial performance, which helps to ensure we place the bank on a sustainable trajectory. We will intensify these efforts in the new year.”
ELLANIE SMIT
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