Gloomy outlook for new businesses
The Bank of Namibia’s latest data echoes the trend identified by the IJG Business Climate Monitor.
Jo-Maré Duddy – About 12% less new businesses registered in the country in the second quarter of this year compared to the same three months in 2017, the Bank of Namibia (BoN) says in its latest Quarterly Bulletin.
This followed a year-on-year drop of 25.3% in new business registrations in the first quarter of 2018.
The central bank says the decline is “in line with the current subdued economic activity and implies low business confidence, considering the fact that new business registrations serves as a leading indicator of economic activity”.
The BoN’s latest data echoes the trend of the leading indicator of the IJG Business Climate Monitor (BCM).
In July, the BCM leading indicator spent its 22nd consecutive month below the 50-point mark, which indicates an economic contraction. The leading indicator came in at 40.63, which suggests that the “Namibian economy continues to experience strong headwinds”, the BCM stated.
BoN data shows that the registration of new businesses in the second quarter of 2017 fell by 28.1% on annual basis. In contrast, the figure for the second quarter of 2016 indicated an increase of 8.3%, while year-on-year growth of 16.2% was recorded in the corresponding quarter of 2015.
Fishing quotas
The new requirement that only private companies under the (Pty) Ltd category could renew or apply for fishing rights boosted the registration of businesses in this category, the BoN says.
Overall, 4.6% more companies were registered in the second quarter compared to the first three months of 2018.
On an annual basis, nearly 132% more (Pty) Ltd companies were registered, while quarterly growth of nearly 111% was recorded.
“In contrast, registration of close corporation category declined, both year on year and quarter on quarter by 22.7% and 5.9%, respectively, over the same period,” the BoN says.
This followed a year-on-year drop of 25.3% in new business registrations in the first quarter of 2018.
The central bank says the decline is “in line with the current subdued economic activity and implies low business confidence, considering the fact that new business registrations serves as a leading indicator of economic activity”.
The BoN’s latest data echoes the trend of the leading indicator of the IJG Business Climate Monitor (BCM).
In July, the BCM leading indicator spent its 22nd consecutive month below the 50-point mark, which indicates an economic contraction. The leading indicator came in at 40.63, which suggests that the “Namibian economy continues to experience strong headwinds”, the BCM stated.
BoN data shows that the registration of new businesses in the second quarter of 2017 fell by 28.1% on annual basis. In contrast, the figure for the second quarter of 2016 indicated an increase of 8.3%, while year-on-year growth of 16.2% was recorded in the corresponding quarter of 2015.
Fishing quotas
The new requirement that only private companies under the (Pty) Ltd category could renew or apply for fishing rights boosted the registration of businesses in this category, the BoN says.
Overall, 4.6% more companies were registered in the second quarter compared to the first three months of 2018.
On an annual basis, nearly 132% more (Pty) Ltd companies were registered, while quarterly growth of nearly 111% was recorded.
“In contrast, registration of close corporation category declined, both year on year and quarter on quarter by 22.7% and 5.9%, respectively, over the same period,” the BoN says.
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