The average Namibian household has already spent next year’s income, economist and co-founder of Cirrus Capital, Rowland Brown, says.
During a presentation on the Namibian economic outlook at the Eljota Investment Summit on Tuesday, Brown said the amount of debt in Namibian households doubled in the past seven years.
Brown said although household income grew over the past seven years due to a booming economy, the ratio of household debt relative to household disposable income went down during much of the period.
From mid-2015, household debt levels increased faster than household income levels.
Brown further indicated that currently, household debt levels relative to household income stood at 100%. This means households can no longer buy as much as they could a year ago.
“We are extremely concerned about households in Namibia at the current point in time for a number of reasons. In 2016/17, we started to see a rapid deceleration in the growth of household income and if you look at 2017, it appears as if the growth of disposable household income was quite a bit below inflation,” he stated.
Brown went on to say that whilst households are sitting with declining incomes and very high levels of debt, fewer households have people who are employed currently compared to two years ago. - Nampa