Lockdown slaughters Namibian economy

Jo-Maré Duddy – Namibia’s exports plummeted to only about N$5.15 billion during lockdown in April, nearly N$3.9 billion or 43% less than the previous month.

Compared to April 2019, Namibia’s lost nearly 48% in export earnings.

This fact is but one in a heap of reports released yesterday which show to which extend the economy went into free fall following lockdown. As such, news by the Namibia Statistics Agency (NSA) that the economy grew by -0.3% in the first quarter compared to -3.3% a year ago offered little comfort.

Khomas and Erongo went into lockdown on 27 March. In the middle of April, the entire Namibia was placed under lockdown until 4 May. The first quarter’s gross domestic product (GDP) figures are therefore virtually no reflection of the impact of the lockdown on the economy.

However, the NSA yesterday also released a number of sectoral reports for April, the start of the second quarter.

Namibia produced nearly 66% less beverages in April compared to the previous month, one of the sectoral reports shows. The figures are based on data from Namibia Breweries, Namibia Beverages and ABInBev Namibia (SAB Miller Namibia at Okahandja).

Alcohol was banned during the lockdown and phase 1 of the state of emergency. In total, Namibia produced 103 963 hectolitres of beverages in April – 197 863 hectolitres less than in March. Compared to April 2019, production skydived by 250 765 hectolitres or nearly 71%.

April’s tumbling production will adversely impact on the performance of manufacturing in the second quarter. According to the NSA, manufacturing grew by -8.3% in the first three months of 2020.

Tourism

The index for room occupancy rate in April recorded only 3.9 basis points, dropping by 43.6 basis points from the previous month. Compared to April 2019, the index tumbled by 101.6 basis points.

The NSA’s index for bed occupancy rate stood at 4.8 basis points in April. Compared to March it decreased by 49 basis points. Annually, it was down 106.4 basis points.

“The declines recorded for both room and bed occupancy rates were mainly attributed to the travelling ban of travellers in order to curb the spread of the pandemic of Covid-19,” the NSA said.

The index for regional and international arrivals registered 0.4 basis points in April. Compared to March and April 2019, it fell by 50.9 and 127.1 basis points respectively.

For regional and international departures, the index stood at 2.8 basis points, down 57.3 and 125.7 basis points respectively compared to March and April 2019.

According to the NSA, hotels and restaurants – a proxy for tourism – grew by -4.1% in the first quarter of 2020.

Construction

Construction has been in recession since 2016. Coming off a very low base, the sector grew by 6.2% year-on-year in the first quarter of 2020.

In April, however, the NSA’s composite index of building plans completed in Windhoek, Walvis Bay, Swakopmund and Ongwediva recorded only 1.4 basis points. This is 208.2 basis points lower than March and 71.5 less than April 2019.

The nominal value of building plans completed in April was a mere N$1.7 million. In March, the figure was N$254.3 million and in April 2019 N$88.4 million.

New vehicles

Analysts also released the latest new vehicle sales data yesterday.

Following the less strict lockdown regulations last month, 470 new vehicles in total were sold in Namibia in May. In April a mere 50 new vehicles were sold countrywide. This low base means that sales jumped by 840% on a monthly basis.

However, vehicle sales remained subdued on an annual basis, with negative year-on-year growth of 55.5%, Cirrus Securities said.

“Excluding April, this is the lowest monthly sales figure since June 2004 which saw 529 vehicles sold in that month. The year-to-date (YTD) sales of 2 749 vehicles is a decrease of 36.4% compared to the first five months of 2019. Moreover, YTD sales for 2020 are the lowest observable values since 2004,” Cirrus said.

Transport

Transport and storage grew by -7% during the first three months of 2020.

The NSA’s rail cargo index recorded 75.3 basis points in April compared to 90.7 the previous month and 40 in April 2019.

The road cargo index stood at 60.7 basis points, a decrease of 30.7 and 47.4 basis points compared to March and April 2019 respectively.

The index for air cargo came in at 5 basis points against 55.2 in March and 128.1 in April 2019.