Namibia: tourism is the least expected performer in 2014

Although Namibia witnessed an influx of international delegates streaming into the country for several international conferences in 2013, the tourism sector did not perform as expected.
As a result, the growth is expected to be negative this year, with Bank of Namibia (BoN)’s economic outlook stating, “The sector is expected to grow at a moderate pace in line with global economic forecast.”
BoN’s December quarterly report states rooms and beds sold continued to slow on a yearly basis, partly ascribable to enduring frail economic activities in the Euro-zone, while it improved on a quarterly basis due to seasonal factors.
The number of rooms and beds sold declined by 15.1% and 7.9%, respectively, on a yearly basis as opposed to the increase on a quarterly basis. The purchase for rooms rose by 3.0% and 11.2% up for beds due to seasonal factors, as the third quarter is usually tourism’s peak season, the quarterly report asserts.
Furthermore, visitors’ arrivals continued to decline on a yearly basis by 13% to 108 398 but improved on a quarterly basis by 13.3%, due to the high tourism season.
On the other side, the mining sector’s performance improved year-on-year during the third quarter of 2013, due to increased production of minerals such as diamonds, uranium, gold and zinc concentrate, which was attributable to better grade mined ores, coupled with improved operations and expansion at various mines.
Although the diamond production was revised upward for 2013, it is expected to decline slightly this year due to capacity constraints. Diamond production increased both on an annual and quarterly bases during the third quarter, owing to better grades mined, as noted in quarterly report under review.
The uranium sector’s growth is, on the other hand, projected to grow this year, despite some temporary operational challenges at the mine coupled with weaker international commodity prices.
Challenges facing the industry, BoN says, range from insufficient water supply and low international commodity prices that held back production during the year. “Growth is expected to pick up in 2014 to about 5.4%, as output is expected to improve.”
But not all is gloom, as output is expected from various local sectors this year, with the retail and wholesale trade projected to increase at a higher rate than initially projected.
And the growth of electricity generation and water is expected to improve this year due to rain prospects. But the construction sector remains the most expected performer this year, due to mega mineral projects scheduled over the medium term.
The IJG Business Climate, which is based on the expectation of improvement in the European and US economies over the next six-month average period, predicts an improvement going forward.