SA downturn puts Namibia at risk

Namibia faces the prospect of weaker economic growth due to a combination of factors, with a downturn in South Africa being the major risk, according to the International Monetary Fund (IMF). This will have a direct effect on the volumes of exports and imports moving into and through the country. “Namibia’s growth prospects are increasingly clouded with downside risks,” says Jiro Honda, who led an IMF Article IV consultation with Namibia. “The main near-term risk is associated with the highly volatile Southern African Customs Union (Sacu) revenues. “In the coming years, the Sacu revenues are expected to decline, reflecting the slowdown in the South African economy,” said Honda. There are also a number of other risks in addition to the decline in Sacu revenues, including weak global demand for Namibian commodity exports and persistent high unemployment.