Tougher trade year expected

The diamond industry faces a burgeoning challenge with the rise of synthetic diamonds, a concern amplified by the fact that Namibia’s diamond exports accounted for 22% and 24% of its export bill in 2022 and 2023 respectively.Commenting the latest trade data by the Namibia Statistics Agency (NSA), IJG Securities pointed out that diamonds were the country’s top exported product last year, generating about N$25.1 billion in foreign earnings.Compared to 2022, Namibia’s diamond export bill last year grew by 15.6%.IJG listed the emergence of synthetic diamonds as a growing challenge, but added: “In the long term, we project a more diversified export portfolio amongst our other locally-mined commodities allowing for a less detrimental effect on our export bill.”Top exportsOther top export products last year include uranium and fish, which earned Namibia N$14.5 billion and N$13.7 billion, respectively.About N$11.6 billion worth of gold and N$5.4 billion worth of petroleum oil were exported. Copper to the tune of N$4.6 billion left the country’s borders, as did live animals valued at N$2 billion. These figures include re-exports.Diamonds, uranium, fish, gold, petroleum oil, copper and live animals accounted for 73.2% of Namibia’s total export bill last year, IJG said.Namibia earned N$105 billion in exports last year, N$2.6 billion or nearly 2.7% more than in 2022.The country imported N$136.9 billion in total last year, an increase of N$7.9 billion compared to 2022.CurrencyThe cost of imports in 2023 rose as the rand and the Namibian dollar depreciated by 7.8% against the US dollar over the course of the year, IJG said.Last year was a “particularly volatile year for the rand”, with the currency hitting a high of 19.80 and low of 16.75. The rand has depreciated by a further 1.8% in January, the analysts said. The average rand exchange rate against the US dollar was 18.62 in December and 18.81 last month.“The rand depreciation benefits Namibia’s export bill, but emits inflationary pressures through the import bill.“The rand remains is an upside risk for imports to Namibia and inflation rates. Namibia is a net importer of goods, which exposes consumers to import inflation,” IJG explained.OutlookA weakened global demand for commodities is expected to dampen the pace of global trade in the first half of this year, while increasing concerns over climate change and escalating geopolitical tensions raise risks for supply chains and inflation, IJG said.“A drought in late 2023 has steadily restricted daily Panama canal traffic, with an expected peak reduction of over 40% by February 2024, according to CNBC. “Additionally, numerous vessel operators traversing the Red Sea en route to the Suez Canal, facilitating cargo transport between Asia, the US and Europe, are opting to avoid the shortcut. Instead, they are navigating the longer Southern route around Africa.”According to IJG, the Baltic Dry Index (BDI), which tracks dry bulk shipping costs, retraced to a relatively normal level last month. However, the Freightos Balitic Index, which tracks container freight rates, remained elevated at US$3 392.2 per 40-foot container during the last week of January, compared to US$1 346.2 per container in the last week of December. “This could further dampen the already weak global demand for commodities, in turn, decreasing Namibian exports of mined materials,” IJG said.

Tougher trade year expected

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Republikein 2025-06-18

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Tougher trade year expected

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