Namibia Business Projection Industry Update Quarter 4 2011

• Publication date: October 2012
• Report size: 37 pages

Core Views Namibian real Gross Domestic Product growth, propelled by investment in mining and an expansionary three-year budget plan, will generally hover between 4% and 5% through to 2016. Declining Southern African Customs Union revenues will lead to current account deficits in 2011 and 2012. Political stability to remain unchanged.. Major Projection Changes We have revised down our projection for real Gross ...

Core Views
Namibian real Gross Domestic Product growth, propelled by investment in mining and an expansionary three-year budget plan, will generally hover between 4% and 5% through to 2016.
Declining Southern African Customs Union revenues will lead to current account deficits in 2011 and 2012. Political stability to remain unchanged..

Major Projection Changes
We have revised down our projection for real Gross Domestic Product growth in 2011 to 4.2% from 4.6% on the back of a weak start to the year. A strong fourth quarter and revisions to past data have led to narrower projections for current account deficits in 2011 and 2012.

Key Risk To Outlook
A rapid slowdown in growth in the eurozone would have adverse effects on growth and exports. I f announced oil discoveries are confirmed to be similar in size to initial estimates, it would substantially push up growth and exports beyond 2016.

Accounting And Corporate Finance Industry in Namibia

Executive Summary. 5

Core Views5

Major Projection Changes..5

Key Risk To Outlook..5
Chapter 1: Political Outlook 7
Industry SWOT Analysis ..7
BMI Political Risk Ratings..7
Domestic Politics 8
Political Challenges: Inclusive Growth and Fiscal Sustainability.8
While the Namibian government's decision not to implement tax increases is an encouraging sign of its willingness to compromise, the
authorities will face significant challenges. The major tasks will be ensuring inclusive growth and fiscal sustainability while not deterring
foreign investment.
TABLE: Namibia Political Overview. 8
Long-Term Political Outlook. 9
Stability Likely To Prevail Over The Coming Decade9
While Namibia’s enormous income inequality poses some risks to political stability, we believe the population is likely to continue
supporting the South West Africa People’s Organization government for the next 10 years, ensuring broad political stability and
continuity.
Chapter 2: Economic Outlook. 13
Industry SWOT Analysis 13
BMI Economic Risk Ratings13
Economic Activity. 14
Weak H111 Growth Temporary.14
Namibia’s disappointing economic performance in H111 has led us to revise down our growth projection for 2011 to 4.2%, but we believe
the longer-term outlook is unchanged. However, risks to Namibia stemming from a growth slowdown in the eurozone are rising. 14
TABLE: ECONOMIC ACTIVITY 14
Balance Of Payments 15
Data Present An Improved Picture.15
A strong fourth quarter and revisions to previous data have brightened the outlook for Namibia balance of payments, with the 2010
current account now estimated to be in surplus and the deficits of 2011 and 2012 projected to be narrower than initially projected. We
expect reserve levels to come under pressure over the next two years but remain adequate to protect the peg of the Namibian dollar to
the rand.
TABLE: CURRENT ACCOUNT . 16
Monetary Policy . 18
Rates On Hold Through To 2012..18
With rising inflation driven by food and fuel prices that are unlikely to respond to interest rate hikes, we believe the Bank of Namibia will
prioritise protecting growth from potential shocks from abroad. We now see the bank holding its rate at 6.00% through 2012 and hiking
only in 2013, and the risks of a further cut are rising.
TABLE: MONETARY POLICY.. 18
Risks To Outlook20
Economic Activity II . 20
Oil Discovery Scenarios20
While we believe any revisions to Namibia’s long-term outlook would be very premature following the announcement of a potential
oil discovery, if the discovery is close to initially stated levels it could have a major impact on the economy from 2015 onwards. If
substantial oil production does begin (not our core scenario) it would significantly boost growth and government revenues. 20
Chapter 3: 10-Year Projection 23
The Namibian Economy To 2020. 23
Robust Growth Expected.23
Thanks to the country’s strong primary segment, we expect growth to prove robust in the long run, averaging around 4.8% annually over
2011 to 2020. With a stable political environment, the main risks are the limited size of the domestic industry, rising income inequality and
global demand for the country’s primary exports.
TABLE: LONG-TER M MACROECONOMIC FORECASTS 23
Chapter 4: Business Environment 25
Industry SWOT Analysis 25
BMI Business Environment Risk Ratings..25

Environment Overview Outlook 26
Institutions. 26
TABLE: BMI BUSINESS AN D OPERATION RISK RATINGS. 26
TABLE: BMI LEGAL FRAMEWORK RATING. 27
TABLE: LABOUR FORCE QUALITY 28
Market Orientation. 29
TABLE: MIDDLE EAST & AFRICA, ANNUAL FDI INFLOWS. 30
TABLE: TRA DE AN D INVESTMENT RATINGS.. 31
Infrastructure 32
Operational Risk. 33
Chapter 5: BMI World Assumptions.. 35
World Outlook. 35
Weakness, But No Recession So Far35
TABLE: GLOBAL ASSUMPTIONS . 35
TABLE: EMERGING MARKETS AGGREGATE GROWTH 36
TABLE: DEVELOPED STATES REAL Gross Domestic Product GROWTH FORECAST 37
TABLE: REAL Gross Domestic Product GROWTH CONSENSUS FORECASTS 37

Accounting and Corporate Finance in Namibia

Namibia Mining Industry Value Per Employee, Us$mn

• $ 250
• Industry data
• February 2013

Yearly, From 2000 To 2017
By Business Monitor International
Source: Chamber Of Mines/BMI Calculation

• Industries : Accounting and Corporate Finance
• Countries : Namibia

Namibia Mining And Quarrying Weekly Wages, Nad Per Worker

• $ 250
• Industry data
• February 2013

Yearly, From January 01, 1992 To January 01, 1992
By Business Monitor International
Source: ILO/Laborsta

• Industries : Accounting and Corporate Finance
• Countries : Namibia

Namibia Mining And Quarrying Weekly Wages, Us$ Per Worker

• $ 250
• Industry data
• February 2013

Yearly, From January 01, 1992 To January 01, 1992
By Business Monitor International
Source: ILO/Laborsta/BMI Calculation

• Industries : Accounting and Corporate Finance
• Countries : Namibia

Namibia Mining Industry Employees, % Of Total Employment

• $ 250
• Industry data
• February 2013

Yearly, From 2000 To 2017
By Business Monitor International
Source: ILO/Laboursta/World Bank/BMI Calculation

• Industries : Accounting and Corporate Finance
• Countries : Namibia