High shipping costs could worsen trade deficit

PHILLEPUS UUSIKUOver the period the December 2020 to December 2021, Namibia did not record any trade surplus and registered a trade deficit averaging N$2.6 billion.The value of exports in December 2021 decreased by 3.8% to N$9.3 billion from its November 2021 level of N$9.7 billion. On an annual basis, exports increased by 14.1%.In addition, Namibia spent about N$11.7 billion on imports, reflecting a decrease of 9.0% month-on-month and an increase of 36.2% on a yearly basis, according to the Namibia Statistics Agency (NSA) trade statistics.As a result, Namibia recorded a trade deficit to the tune of N$2.4 billion, reflecting an improved deficit when compared to the N$3.2 billion recorded in November 2021 but exacerbated when compared to a deficit of N$425 million recorded in December 2020, the agency said.According to Simonis Storm (SS) quarterly report, “stripping out mining production, we forecast a monthly average trade deficit of N$3.5 billion in 2022.”Including mining production, the trade balance forecast changes to an average monthly deficit of N$2.8 billion. “Higher deficit forecasts in 2022 are mainly driven by higher inflation of foreign merchandise goods and shipping costs,” SS pointed out.MarketsDuring the month of December 2021, Namibia’s top five export partners were China, South Africa, Botswana, USA and France. These top five markets accounted for 72.2% of Namibia’s total exports, up from 69.8% witnessed in November 2021 and 65.6% recorded in December 2020, NSA said.In addition, South Africa, Zambia, DRC, China and India were the major source of imports for Namibia. The top five import markets supplied Namibia with 75.1% of all imports required by the country, down from its November 2021 level of 76.9% and 75.7% recorded in December 2020, NSA added.South Africa remained Namibia’s largest source of imports with a share of 31.1% of the value of all goods received into the country during the month under review. Following in the second place was Zambia with a contribution of 21.4% of total imports. Furthermore, DRC came in the third-place accounting for 10.9% of Namibia’s total imports followed by China and India contributing 6.5% and 5.3%, respectively, the agency pointed out.CommoditiesCopper blisters remains Namibia’s largest export commodity during the month under review, accounting for 34.4% of total exports mainly destined to China.This was followed by diamonds which accounted for 13.1% of total exports destined mostly to Botswana, UAE, Belgium and Hong Kong. Uranium was ranked third on the list with a market share of 11.1% that was destined to China, France and Canada.Non-monetary gold accounted for 8.1% of total exports of which most was destined to South Africa and Angola. Finally, fish that accounted for 6.9% of total export mostly destined to Spain, Zambia and South Africa. The aforementioned top five export commodities jointly accounted for 73.5% of total exports during the period under review, NSA said.Moreover, the top five commodities imported into Namibia jointly accounted for 48.0% of total imports with copper blisters taking the lead with the largest share of 29.2%. Following in the second position is petroleum oils with a share of 6.0% of all commodities imported, NSA added.TransportSimonis Storm notes that, due to shipping constraints, some local businesses have switched to air cargo as a result of delays in shipping containers.According to the NSA, for the period under review, exports amounting to N$4.2 billion, representing 44.7% of total exports left the country by sea. This represents a decline of 17.8% when compared to its November 2021 level of N$5.1 billion. Similarly, a decrease of 16.3% was detected when compared to its level of N$5.0 billion recorded in December 2020. Road and air transportation accounted for 33.4% and 21.9% of total exports, respectively, the agency said.“In terms of direction of trade, Africa had the highest share of trade with Namibia, followed by Asia, the EU and North America during the first two months of the fourth quarter of 2021. We expect intra African to grow faster than trade with overseas regions such as the EU, Asia and the US as African states continue negotiations on various issues such as intellectual property rights, investment and competition policy under the African Continental Free Trade Area (AfCFTA),” SS said. -phillep@nmh.com.na

High shipping costs could worsen trade deficit

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High shipping costs could worsen trade deficit

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