26 Inside BUSINESS Friday, September 1 2017| NEW ERA Fitch’s BMI research on the Namibian economy Rising uranium and copper production coupled with relatively subdued import demand will see Namibia’s current account deficit narrow significantly in the coming years. While financial account surpluses will also decline in the face of increased regulatory uncertainty, we see little threat to the country’s external stability. Namibia’s current account deficit will narrow substantially through to 2020. The trade deficit will shrink significantly as the completion of the Husab uranium mine and several construction projects will simultaneously boost mineral exports and decrease demand for imports linked to construction. At the same time, Southern African Customs Union (SACU) receipts will broadly hold up, ensuring that secondary income surpluses remain steady. We forecast that the current account deficit will narrow from 12.1 percent of GDP in 2016 to 1.3 percent of GDP by 2020. As such, while Namibia’s financial account surpluses will begin to narrow, as major infrastructure projects finish and uncertainty over the impact of proposed black economic empowerment legislation tempers foreign firms’ willingness to invest in the mining sector, we see little risk to external account stability. Indeed, we expect financial account inflows to continue to comfortably fund the current account deficit, allowing the country to slowly build its foreign reserve stockpile. Financial account surplus to fall further Namibia’s financial account surplus will continue its narrowing trend, largely on the back of shrinking foreign direct investment (FDI) inflows. After hitting US.4 billion in 2016, FDI is likely to face increasing headwinds as the Husab mine is now operational and several major construction projects such as the Walvis Bay Port expansion will be completed in the next 12 months. Although other projects are MARKET OVERVIEW planned, we do not expect all to come to fruition and the proposed projects are now as large in scale as the current and soon to be completed developments. Meanwhile, ongoing discussion over the New Equitable Economic Empowerment Framework (NEEEF) legislation may act as a further headwind to FDI over a multi-year timeframe. The bill will potentially include laws enforcing that 25 percent of all new businesses be owned by ‘previously disadvantaged persons’ and could change government procurement contracts, as companies that score poorly Money Market Change Latest Selected NSX Stock 3 months 0.00% 7.05% Symbol Stock Name Spot % Move 6 months 0.00% 7.38% CGP CAPRICORN INVESTMENT GROUP L 1810 0.00% 9 months -0.02% 7.5% NBS NAMIBIA BREWERIES LTD 3450 0.00% 12 months -0.02% 7.67% BVN BIDVEST NAMIBIA LTD 787 0.00% Bonds Change Latest FNB FNB NAMIBIA HOLDINGS LTD 4675 0.00% GC17 (R203 : 4.1%) 0.37% 4.77% ORY ORYX PROPERTIES LTD 2065 0.00% GC18 (R204 : 6.98%) 0.00% 7.89% NAM NAMIBIAN ASSET MANAGEMENT LT 72 0.00% GC21 (R208 : 7.46%) 0.00% 8.28% NHL NICTUS NAMIBIA 200 0.00% GC24 (R186 : 8.58%) 0.00% 9.80% BMN BANNERMAN RESOURCES LTD 33 0.00% GC27 (R186 : 8.58%) 0.00% 10.19% DYL DEEP YELLOW LTD 251 -1.18% GC30 (R2030 : 9.14%) 0.01% 10.81% SILP STIMULUS INVESTMENT LTD-PREF 12129 0.00% GC32 (R213 : 9.25%) 0.00% 10.96% FSY FORSYS METALS CORP 133 -0.75% GC35 (R209 : 9.59%) 0.01% 11.02% TUC TRUSTCO GROUP HOLDINGS LTD 449 0.00% Commodities %Change Latest B2G B2GOLD CORP 3428 -1.72% Gold 0.01% $ 1,308.79 Platinum -0.39% $ 986.66 Copper 0.00% $ 6,769.00 Brent Crude 1.17% $ 50.90 Main Indices %Change Latest NSX (Delayed) 0.02% 1157.53 JSE All Share 0.53% 56,466.14 SP500 0.46% 2,457.59 FTSE 100 0.68% 7,415.11 Hangseng -0.44% 27,970.30 DAX 0.63% 12,078.42 JSE Sectors %Change Latest Financials 0.31% 15,711.82 Resources 1.31% 35,822.88 Industrials 0.41% 76,017.74 Forex %Change Latest N$/US dollar 0.11% 13.0468 N$/Pound -0.06% 16.8028 N$/Euro -0.19% 15.4552 US dollar/ Euro -0.32% 1.1846 Namibia Monthly Data Latest Previous Namibia Inflation (Jul 17) 5.4 6.1 Bank Prime 10.50 10.75 BoN Repo Rate 6.75 7.00 on the NEEEF framework will be given lower priority. As the specific details of the draft bill are not yet confirmed, the combination of uncertainty over both the exact contents and timing of the bill will likely see investment delayed. Current Account Deficit To Narrow Sharply To 2020 Even as investment into Namibia slows, we do not see this as a major threat to the country’s external account stability. This is largely due to our expectation for a simultaneous narrowing of the current account deficit. In the next few years, a major increase 31-Aug-17 in Namibia’s mining exports combined with m o r e t e p i d import growth will narrow the trade deficit – a major driver of the country’s external account shortfalls. The Husab uranium mine, the third largest uranium only mine in the world, began production in December 2016 and will reach peak output in 2017. We expect that this will more than double the country’s uranium production, with annual uranium output forecast to increase from 2.9 thousand tonnes (KT) in 2016 to 6.8KT in 2017. Meanwhile, we expect that global copper prices will recover from a low of US,331 per tonne in January 2016 to average USD5,500 per tonne in 2017, incentivising a boost in copper exports (copper was 11.7 percent of total goods exports in 2016). At the same time, the completion of several construction projects between 2016 and 2018 will lessen the demand for materials and equipment required for construction, cooling import growth. Machinery, steel and vehicles associated with construction collectively made up a considerable (though d e c l i n i n g ) p r o p o r t i o n o f Namibia’s imports since the start of several projects in 2014. In addition, still sluggish economic activity outside of the minerals sector – with loan growth well below average for the year to March 2017 (most recent data) – will see consumer demand for imported goods remain subdued in the coming years. SACU receipts to remain steady On top of the narrowing trade deficit, Namibia’s current account will also benefit from modest increases in the secondary income surplus increase in 2017, remaining stable thereafter, as receipts from SACU will support the narrowing of the deficit. South Africa’s economy will expand slightly in the next two years which will mean an uptick in imports into the SACU region and consequently in secondary income flowing into Namibia, helping to narrow the current account deficit. With the current account deficit narrowing even more sharply than the financial account, this will ensure limited funding risks and see Namibia’s foreign reserves continue their tentative recovery begun in 2016. – This research report was produced by BMI Research, part of the Fitch Group, which owns Fitch Rating agency.
Friday, September 1 2017 | NEW ERA ADVERTORIAL 27 AIRWAVES Weekly www.nbc.na SEPTEMBER IS TV LICENCE RENEWAL MONTH! Hurry and renew your licence BEFORE 30 September 2017. When paying via EFT or direct deposit, do not forget to put your TV Licence account number and/or ID number in the reference field. For more information on banking details call: 061 – 291 3111 or 291 2100 or send an e-mail to email@example.com Find the nbc’s mobile TV Licence teams at the following venues on these dates: House & Home, Wernhil Park, Windhoek Friday, 1 September – Saturday, 9 September 09:00 to 18:00 weekdays 09:00 – 14:00 weekends Ongwediva Annual Trade Fair Friday, 1 September – Saturday, 2 September 14h00 to 20h00 on weekdays 10h00 to 18h00 on weekends NBC RADIO & MY NAMIBIA SONG COMPETITION ROADSHOWS Join in the festivities with the nbc Radio Outside Broadcast (OB) and the My Namibia Song Competition team as they bring you everything you need to know about the competition and receive amazing giveaways! Find the team at the following venues on these dates: 1 September 2017 10H00 - 12H00 Erongo Region Usakos Hakhaseb Community Hall nbc Damara/Nama & Setswana Radio Services Live Broadcast 2 September 2017 10H00 - 13H00 Erongo Region Swakopmund Woermannbrock, Mondesa nbc Damara/Nama, Setswana & Otjiherero Radio Services Live Broadcast 1 September 2017 12H00 – 16H00 Erongo Region Henties Bay, Spar Shopping Centre nbc Afrikaans & Damara/Nama TVL Data Capturer Apolonia Nambuli ready to assist the public with payments at the Ongwediva Annual Trade Fair Radio Services Live Broadcast 2 September 2017 11H00 - 13H00 Erongo Region Walvis Bay, Town Hall nbc Afrikaans & German Radio Services Live Broadcast Follow the My Namibia, My Country, My Pride campaign on Twitter: @NNPCampaign Instagram: @nnpcampaign and like us on Facebook: @NNPCampaign Record Your “My Namibia” Song in nbc’s Studio 6 Are you a proudly Namibian citizen, planning to enter the “My Namibia Song” competition as a lyricist or composer? If YES, the Namibian Broadcasting Corporation has good news for you! Pay only N0 for two hours of recording, mixing and mastering your “My Namibia” song in nbc’s Studio 6! For enquiries and bookings, contact nbc Commercial Coordinator, Justine Siteketa on 061 291 3143 or via email at firstname.lastname@example.org TV CENTER Tel: 061 291 3111 RADIO CENTER Tel: 061 291 9111 SALES Tel: (061) 291 3125/3214 TV LICENSING Tel: 061 291 3393/4/5 DTT CALL CENTER Tel: 061 291 3026/3025