Namibia's investment risk increases - report

17 September 2020 | Economics

ELLANIE SMIT

WINDHOEK



The risk of investing in Namibia has been increasing, while rewards have been declining, according to a new investment report.

The coronavirus pandemic has eroded the overall improvement in risk-reward scores seen across the African continent in recent years.

This is according to the fifth edition of the Africa Risk-Reward Index that was developed by special risk consultancy group Control Risks and independent global advisory NKC African Economics. The index offers a comparative snapshot of market opportunities and risks across the continent. The index shows that Namibia's risk and reward scores have both dropped since last year. Its risk score now stands at 4.21 out of 10, while last year it was 4.44. The country's reward score is now 1.30, while it was 3.73 last year.

Long recovery

According to the report, Africa's recovery after the pandemic may be prolonged and uneven, but it could also be transformative, adding that countries which respond in innovative ways and make structural changes to their economies will recover faster. The report says the coronavirus pandemic could bring positive changes to Africa's economies even if output shrinks as much as 10% in 2020. wThere are already signs that the continent will be disproportionately hit by the outbreak that has raised risk and worsened the investment climate after years of progress, says the report.

“The GDP on the continent is likely to contract 6% to 10% in 2020 with higher debts leading to more frequent financial crises. Dwindling revenues will mean many African countries have less firepower to respond to the pandemic and stoke a quick recovery.”



Don't run

The report says despite these difficulties and expectations of a long and uneven recovery, foreign investors that are fleeing the continent could be making a mistake.

That is because in some markets the coronavirus has given new impetus to positive reforms, according to the report.

“Substantial changes will both serve the continent's people well and justify a renewed excitement in Africa as an investment destination.”

It said efforts to diversify commodity-dependent economies, deepen domestic financial markets and formalise the labour force could gain momentum in the wake of the pandemic, which forced countries to close borders and lock down cities.

“This recovery will be an opportunity for governments across the continent to address structural constraints and promote new solutions. We are already seeing signs that they are doing so, and for investors this opens up some interesting opportunities,” says Barnaby Fletcher, associate director at Control Risks.

Similar News

 

Education employees value their labour services more

2 days ago - 22 January 2021 | Economics

PHILLEPUS UUSIKUDuring the third quarter of 2020, the Government Wage Index (GWI) stood at 130.4 basis points, posting a marginal increase of 0.9 percentage points...

Price monster in South Africa under control

2 days ago - 22 January 2021 | Economics

AMBAR WARRICKSouth Africa's rand led gains across emerging market currencies on Wednesday as domestic inflation remained steady, while stocks hit a record high on hopes...

Kenya's remittance inflows jump by nearly 11%

2 days ago - 22 January 2021 | Economics

Remittance inflows into Kenya jumped by nearly 11% in 2020 to US$3.09 billion as technological innovations helped people overcome the economic struggles brought on by...

Zambia expects to find new Mopani Copper investor

2 days ago - 22 January 2021 | Economics

CHRIS MFULAZambia's mining investment arm ZCCM-IH said it expects to find a new investor for Mopani Copper Mines by the end of the year, as...

China restructuring Kenya's debt

2 days ago - 22 January 2021 | Economics

Kenya has secured a debt repayment moratorium from China which will save it 27 billion shillings (US$245.23 million) in the period to June, its finance...

Namibia in desperate need of Foreign Direct Investment

3 days ago - 21 January 2021 | Economics

PHILLEPUS UUSIKUNamibia is in desperate need of Foreign Direct Investment (FDI) and policy certainty is of critical importance to boost investor confidence. Following a depressing...

Algeria's crude output tumbled in 2020

3 days ago - 21 January 2021 | Economics

Algeria's oil revenues collapsed in 2020, according to energy ministry figures released Monday, exacerbating an economic crisis in the North African country which is heavily...

Namibia more of a consumer than a producer

4 days ago - 20 January 2021 | Economics

PHILLEPUS UUSIKUNamibia recorded a trade deficit to the tune of N$1.4 billion in November 2020. The recent figure shows that the deficit improved by...

Ivory Coast rains support abundant cocoa mid-crop

4 days ago - 20 January 2021 | Economics

Above average light rains mixed with spells of sunshine last week in most of Ivory Coast's cocoa regions provided the right growing conditions for the...

South Africa's mining industry to support vaccine rollout

5 days ago - 19 January 2021 | Economics

South Africa's mining companies will support government in the rollout of Covid-19 vaccines as the nation battles a surge in infections, the industry body said...

Latest News

Heineken South Africa to cut...

2 days ago - 22 January 2021 | Business

The South African arm of Heineken will cut 70 jobs and put new investments on hold in the country due to the significant impact of...

The true test of leadership:...

2 days ago - 22 January 2021 | Columns

Anthony Mitchell Leadership is challenging at the best of times, but how you lead during an environment of complexity and ambiguity is the real test...

Capturing moments through the lens

2 days ago - 22 January 2021 | People

Monique AdamsBorn in Oshakati, David Shipinge Josef grew up in many different parts of Namibia. With both his parents having worked for Namibia Wildlife Resorts...

President parks Namdia report

2 days ago - 22 January 2021 | Business

OGONE TLHAGE AND MATHIAS HAUFIKUState House this week floundered on questions why President Hage Geingob has not acted on a damning report dragging two former...

Namibia presses ahead with sale...

2 days ago - 22 January 2021 | Environment

ELLANIE SMITWINDHOEKWith only a week left until the bidding process closes for the sale of 170 of Namibia’s elephants, opposition is mounting, with thousands that...

African consumers could face rice...

2 days ago - 22 January 2021 | Business

NAVEEN THUKRAL, RAJENDRA JADHAV AND AYENAT MERSIETightening global supplies of basic foodstuffs and disruptions to shipping caused by the coronavirus pandemic are driving up the...

Determined and eager to learn...

2 days ago - 22 January 2021 | People

Monique AdamsBesides spending time with her son and family, she loves dancing, travelling, appreciates being home and trying out new recipes.Born in a village called...

The need to provide clients...

2 days ago - 22 January 2021 | Business

Monique AdamsEstablished in April 2020 and operating in Windhoek, the cleaning company specialises in commercial and residential cleaning. They use cleaning products that are environmentally...

Curtail overarching powers of public...

2 days ago - 22 January 2021 | Opinion

Namibia must, as a matter of principle, discard all laws that give overarching powers to public officials to do as they wish with our strategic...

Load More