Bright business prospects in the mining sector
31 August 2021 | Economics
Simonis Storm: We know of Scorpion Zinc, Rosh Pinah and Debmarine invested heavily in expanding their operations and increasing the life of their mine.
In 2020, it was only the mining and quarrying sector that registered positive growth in terms of investment increasing by 15.9% annually. Between 2017 to 2020, on average, about NS5.9 billion was invested in the sector.
Statistics released by the Namibia Statistics Agency (NSA) indicated that out of the N$21.5 billion that was invested in the economy last year to enhance productivity, about N$6.6 billion was invested in the mining and quarrying sector.
“We know of Scorpion Zinc, Rosh Pinah and Debmarine invested heavily in expanding their operations and increasing the life of their mine,” Simonis Storm noted.
Sectors with the highest disinvestment levels include electricity and water (down 68.2%), fishing (down 62.5%), wholesale and retail (down 51.2%) and construction (down 27.5%). “We continue to see the private sector investing at higher levels in their productive capabilities compared to government,” SS added.
For the period under review, only N$371 million was invested in the electricity and water sector compared to N$1.2 billion in 2019. In addition, N$322 million was invested in the fishing sector when compared to N$955 million in the previous year.
Furthermore, the wholesale and retail sector invested N$321 million in 2020, compared to N$661 million the preceding year.
Lastly, the construction sector in 2019 invested N$832 million and declined to N$558 million last year. Between 2016 to 2020, private investments were relatively more when compared to government investments.
Overall, the N$21.5 billion investment in all the sectors in 2020 is relatively less when compared to N$24.2, N$26.5, N$28.2 and N$32.7 billion invested in 2019,2018, 2017 and 2016, respectively. `
This remains a concerning trend and reflects low business confidence and uncertainty about future business prospects, SS pointed out.
Gross Fixed Capital Formation (GFCF) or investment measures resident producer acquisitions less disposals of fixed assets, while gross savings is the difference between disposable income and final consumption expenditure.
Hence, the more a country spends its national income on consumption, the less resources are available for investment and savings and consequently for future production, NSA pointed out.
During the period under review, gross savings registered an amount higher than the gross fixed capital formation for the first time, since the series being depicted, this is a reflection of capital outflows from the domestic economy to the rest of the world, NSA added.
The increase in savings is attributed to the decline in private final consumption expenditure observed during the period under review, NSA said. Lastly, Namibia remained a net importer during 2020, mainly on the back of lower mining [email protected]