Trade surplus with China contracts

Re-exports comprised about 58.2% of Namibia’s total exports in March, compared to 36.6% a year ago.

06 May 2021 | Economics

The country’s services sector greatly benefits from activities of re-exports. – Namibia Statistics Agency

Jo-Maré Duddy – China remained Namibia’s biggest export destination in March, but unlike a year ago, the destination clinched the top position because of re-exports to the superpower.

Data released yesterday by the Namibia Statistics Agency (NSA) showed products and commodities worth N$1.505 billion were exported to China in March. Of this, nearly 91% or N$1.4 billion were re-exports.

In March 2020, exports to China totalled about N$3.47 billion, around half of which was re-exports. The remaining N$1.75 billion was Namibian commodities, mainly uranium.

Imports from China in March this year amounted to N$532 million, up nearly 93% year-on-year (y/y).

Namibia enjoyed a trade surplus of N$973 million with China during the month under review, but it was nearly 70% smaller than the surplus recorded with China in March 2020.

Namibia’s total exports in March amounted to nearly N$6.6 billion, a drop of about 28.3% or nearly N$2.6 billion y/y. Nearly N$9.2 billion worth of products were imported, an increase of 23.8% or nearly N$1.8 billion y/y.

Namibia recorded an overall trade deficit of about N$2.6 billion in March, compared to a surplus of some N$1.7 billion a year ago.

RE-EXPORTS

Re-exports totalled around N$3.8 billion, up nearly 14% y/y. Re-exports comprised about 58.2% of total exports in March, compared to 36.6% a year ago.

Re-exports are commodities imported by residents who assume short-term ownership thereof. The commodities are subsequently exported without undergoing any significant industrial transformation.

“Even though no substantial transformation is done, re-exports have the potential to benefit the intermediate country by rendering services such as sorting, re-packaging, storage, transport and trade mediation services. This implies that the country’s services sector greatly benefits from activities of re-exports. Additionally, re-exports serve as an indication of favourable corporate tax in the intermediate country,” the NSA said.

Copper, mainly from Zambia and the Democratic Republic of Congo (DRC), comprised 56.5% of total re-exports in March. The copper was re-exported mostly to China, France and the Netherlands.

With a share of 16.3% of total exports, diamonds were the second biggest re-export commodity. The diamonds came mainly from Botswana and were destined to the United Arab Emirates (UAE), Belgium and United States.

COMMODITIES

Copper had the largest share (33.4%) of Namibia’s total exports in March ahead of diamonds (14.9%), fish (12.1%), uranium (5.7%) and non-monetary gold (5.4%).

In terms of imports, copper was also the most imported commodity with a relative share of 24.3% of total imports, followed by petroleum oils with a share of 7.9% and copper ores with a share of 4.4%.

South Africa, Botswana, the UAE and Canada formed part of Namibia’s top five export markets.

The demand side saw South Africa maintaining the first position as the country’s largest source of imports, accounting for 39.3% of total imports into Namibia. Zambia held firm on its second position with 16.6% of the market share. DRC, China and Bulgaria also formed part of Namibia’s top five sources of imports.

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