GDP nosedives as recession bites

Jo-Maré Duddy About 108.6 billion flowed through the Namibian economy last year, the smallest gross domestic product (GDP) in four years.Preliminary figures released by the Namibia Statistics Agency (NSA) on Thursday show the country's GDP, measured at constant 2010 prices, in 2017 was around N$843 million smaller than in 2016. This resulted in 2017 as a recession year, with economic growth coming in at -0.77%.Constant 2010 prices are used to measure economic growth and is adjusted for inflation. At current prices, therefore not tweaked to take inflation into account, Namibia's GDP last year was about N$176.3 billion.Last year was the worst year since 2009 when the economy, in the aftermath of the global financial crisis, grew by 0.3%. Revised figures show economic growth in 2016 was 0.7%.Moneywise, GDP in 2017 was the smallest since 2014, when about N$102.4 billion flowed through the economy. Year-on-year, however, 2014 was a great year as the economy grew by 6.4% compared to 2013.Consolidation aftermathAlthough the completion of the Husab uranium, Tschudi copper and Otjikoto gold mines has dragged construction growth down over the past two years, massive curbing of government's development budget to regain fiscal stability has had a major impact on the sector. The sector grew by -26.3% in 2016 and by -25.6% in 2017. This followed bumper years from 2013 to 2015, when growth varied between 24.3% and 42.6%.At constant 2010 prices, construction contributed barely N$4.1 billion to the economy in 2017, about N$1.4 billion less than in 2016. As such it represented nearly 3.8% of 2017's GDP compared to about 5% the previous year.Construction's dismal performance was the main cause for the contraction in the secondary industry in 2017. Growth of -6.7% was recorded, following -6.6% the previous year.The government cash crisis, which spilled over into billions of late payments to service providers, coupled with fiscal consolidation and the general economic downturn, took its toll on the private sector. The wholesale and retail sector, a major contributor to GDP, was in a full-blown recession in 2017, growing at -7.1%. In 2016, growth of 2.6% was recorded. The previous recession in this sector was in 2008, when growth was -4%.Dollarwise, wholesale and retail pumped about N$13.7 billion into the economy last year, around N$1 billion less than in 2016.Public administration and defence was responsible for about N$12.2 billion, relatively flat compared to 2016. This sector grew by 0.3% last year, after coming in at 3.3% in 2016. Both years are in stark contrast to 2015, when growth was 14%.Retail's recession and waning figures for the public sector pulled the overall tertiary industry into recession. Growth of -1.1% was recorded for 2017, compared to 3.4% the previous year. Saving graceNamibia's primary industries, which includes mining and agriculture, significantly soften the blow of the recession. Both these sectors grew by more than 12% last year.Agriculture recorded an overall figure of 12.7% in 2017, up from a meagre 1.8% in 2016. Together, the sector pumped about N$4.2 billion into the economy.Livestock farming grew by a whopping 13.7% last year, versus 4.2% the previous one. Growth in this sector, however, took its toll on manufacturing, with good rains resulting in farmers building up their herds after the drought in 2015 instead of sending livestock to the market. Growth in meat processing, part of secondary industries, plummeted to -14.4% compared to -2.1% in 2016. Meat processing has been in recession since 2014.Livestock farming contributed nearly N$2.5 billion to the economy last year, up from N$2.15 billion in 2016. Meat processing, on the other hand, contributed N$311 million, down from N$363 million.Crop farming and forestry grew by 11.4% in 2017, recovering from -1.2% the previous year. This boosted the processing at grain mills – part of manufacturing in the secondary industry. Grain mill processing grew by 16.3% in 2017, compared to 3.5% the year before.Crop farming accounted for nearly N$1.8 billion of the GDP last year, while grain mills contributed about N$1.04 billion. In 2016, the figures were N$1.6 billion and N$897 million respectively.MiningMining, lead by diamonds, uranium and metals, escaped recession in 2017. The sector grew by 12.8% after contracting by 5.8% in 2016.Diamonds grew by 12% and uranium by 23.4%. In 2016, growth was -9.6% and 13.6% respectively. Diamonds pumped N$5.8 billion into the GDP last year, compared to N$5.18 billion in 2016. Uranium's share was about N$1.6 billion versus N$1.3 billion.The metal ore sector contributed nearly N$1.8 billion, compared to N$1.3 billion in 2016. This subsector recorded growth of 9.9% last year, a recovery from 0.1% in 2016.Kassie:Performance in sectors 2017 2016Primary industries 10.7% -1.5%Secondary industries -6.7% -6.6%Tertiary industries -1.1% 3.4%SubsectorsFishing 1.3% 9.1%Manufacturing 1.4% 5.2%Diamond processing 14.6% 86%Hotels & restaurants (tourism) -2.0% 3.2%Transport 1.4% 6.9%Financial intermediation 2.8% 2.8%Real estate 2.7% 2.6%Education -1.2% 2.8%Health -1.3% 7.2%

GDP nosedives as recession bites

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GDP nosedives as recession bites

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