Mining sector expected to improve trade deficit

PHILLEPUS UUSIKUThe value of exports in November 2021 increased by 1.3% to N$8.8 billion from its October 2021 level of N$8.7 billion. Imports stood at N$12.1 billion, reflecting a decrease of 22.3% month-on-month and an increase of 6.7% on a yearly basis, according to the Namibia Statistics Agency (NSA) trade statistics.Despite the increase in the value of exports and a decrease in the value of imports, Namibia still recorded a trade deficit of N$3.3 billion.This is an improvement when compared to a trade deficit N$6.9 billion recorded in October 2021. However, on an annual basis, Namibia’s trade deficit increased when compared to a deficit of N$2.9 billion recorded in November 2020.According to Simoninis Storm (SS) trade statistics report, net exports is likely to contribute negatively to the gross domestic product (GDP) calculation given that Namibia incurred trade deficits for all months of 2021. “With the mining sector expected to show a rebound in production growth, we do expect improved trade balances in 2022,” SS said.SS cited IHS Markit saying that global merchandise good trade is expected to increase by 4.3% in 2022, following 2021’s 12.6% annual increase.Supply chain constraints are likely to persist until mid-2022 with shipping lines focusing on the most profitable routes, not favourable to Namibia given our size in the global trade environment, SS pointed out.“We expect demand for air freight to have increased despite significantly higher prices due to growing frustration with ships amongst certain local businesses. Threats to global trade remain, with potential resurgences in Covid-19 cases and its variants, leading to staff shortages at key logistical and production centres that form part of the global value chain, as well as rising geopolitical tensions,” SS said.Mining The NSA mining sectoral report for November 2021 pointed that the composite index for industrial base metals and mining production consisting of diamonds carats, uranium, gold Bullion and Zinc concentrate and contained posted a monthly growth of 1.1% in November 2021. This is a slowdown when compared to a growth of 1.2% registered in the preceding month. On yearly basis, the index recorded a growth rate of 17.9% for the period under review.The volume of diamonds produced amounted to 148 165 carats. The production for October 2021 stood at 140 565 carats, while 143 391 carats were produced in the corresponding month of 2020, NSA said.The increase registered on a monthly basis in the production of diamond was mainly due to increase in the global demand, NSA added.For the period under review, the production of uranium stood at 622 tons compared to 578 tons and 470 tons produced in October 2021 and the corresponding month of 2020, respectively.The growth recorded in the production of uranium on a monthly basis was mainly attributed to high-grade ore being mined. This was driven by the sufficient water supply mostly required to mine and process uranium minerals efficiently, the agency pointed out.Moreover, 7 595 tons of zinc concentrate and contained were produced compared to the production of 8 489 tons and 7 245 tons for October 2021 and corresponding month of 2020, respectively.The monthly decline recorded in the production of zinc concentrate and contained was mainly attributed to low-grade ore being mined, NSA added.Lastly, the production of gold bullion stood at 854 kg in November 2021 compared to 946 kg and 536 kg registered in October 2021 and in the corresponding month of 2020, respectively.The decline recorded on a monthly basis in the production of gold bullion was attributed to low-grade ore being mined and the expansion of operations in mining activities during the review period, NSA said.-phillep@nmh.com.na

Mining sector expected to improve trade deficit

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