Economy loses billions due to shipping constraints
The value of exports stood at N$4.8 billion in July 2021, compared to N$9.4 billion recorded in June 2021, dropping by nearly 50%.
21 September 2021 | Economics
Theo Klein; Economist Simonis Storm; "Having increased the cargo terminal's capacity at Walvis Bay from 350 000 containers per annum to 750 000 containers per annum, Namport is well positioned to handle an influx of vessel calls."
For the month July 2021, the Namibian economy lost about N$4.6 billion in potential export earnings. Statistics released by the Namibia Statistics Agency (NSA) indicated that the value of exports stood at N$4.8 billion in July 2021, compared to N$9.4 billion recorded in June 2021, dropping by nearly 50%.
In July 2020, the value of exports stood at N$6.6 billion, declining by 27.7%.
According to Simonis Storm economist, Theo Klein, the shortage of cargo ships and containers negatively impacted Namibian exports, most noticeably on copper exports. Walvis Bay warehouses were at full capacity and accumulated a stockpile of export goods waiting for available containers. Some of the copper stockpile stored in warehouses were shipped during July 2021.The share of exports leaving Namibia via sea decreased from 73.5% in June 2021 to 51.0% in July 2021, he said.
Given these developments, Namibia recorded a trade deficit to the tune of N$3.2 billion indicating a growth when compared to the deficit of N$902 million recorded in June 2021 but an improvement when compared to N$3.4 billion recorded in July 2020, NSA pointed out.
Copper was Namibia's largest export commodity during the month under review, accounting for 29.1% of total exports mainly destined to China, Spain, Netherlands and France. This was followed by fish which accounted for 16.4% of total exports destined mostly to Spain, Zambia and South Africa.
Non-monetary gold of which most was destined to South Africa occupied the third position after absorbing 9.2%. Finally, ores and concentrates of base metals accounted for 3.7% of total export and was primarily absorbed by Italy. The aforementioned top five export commodities jointly accounted for 70.3% of total exports up from its June 2021 level of 49.5% and 55.7% recorded in July 2020.
During the month of July 2021, exports amounting to N$2.4 billion, representing 51% of total exports left the country by sea. This translated into a decline of 64.8% when compared to (N$6.9 billion) of goods exported in June 2021.
“Having increased the cargo terminal's capacity at Walvis Bay from 350 000 containers per annum to 750 000 containers per annum, Namport is well positioned to handle an influx of vessel calls,” Klein said.
Imports stood at N$7.9 billion, dropping by 23.1% on monthly basis, while on annual basis a decline of 20.9% was observed from its July 2020 level of N$10 billion, NSA said.
Klein notes that commodities from local mines constitute about 60% of total exports and would be recommendable for Namibia to focus on its comparative advantage and the resources which are in abundant supply.
“In light of this, the Namibia Investment Promotion and Development Board (NIPDB) and the National Planning Commission (NPC) have endeavoured to find growth opportunities within Namibia in order to diversify our export product mix and focus on the manufacturing of alternative products which Namibia is capable of producing.
The NPC has identified certain industries, such as mining, which has run its course and aims to pursue opportunities in alternative industries to create jobs.
One main factor underpinning this strategy is to increase the complexity of Namibia's product offering to local and international markets. This will be done by importing skills and training Namibians in certain complex manufacturing activities,” he said.