Exports nearly doubled in July 2022 from 12-months ago, rising by 99.6% y/y, trade statistics released by the Namibia Statistics Agency this week reveal.
During the same time, imports increased by 60.1% y/y. However, the value of exports is still overshadowed by a rising import bill, where the trade deficit almost doubled on a monthly basis (up 70.9% m/m) and rose 19.6% y/y in July 2022.
“Namibia recorded a trade deficit in each month YTD, averaging a monthly trade deficit of N$3.5 billion. This is already larger than the average monthly trade deficit recorded during the same period (January to July) last year.
“A rising import bill has been driven by elevated global oil and petroleum product prices, together with a weaker Rand exchange rate that has driven the Namibian dollar value of our imports significantly higher. It is therefore inflationary effects keeping the value of total trade in 2022 above levels seen in 2021 and 2020. Oil imports account for about 18.3% of total imports on average,” Theo Klein, an economist with Simonis Storm said.
All key export categories decreased on a monthly basis: manufacturing (down 4.0%), mining (down 24.8%) and agriculture (down 5.5%). Namibia’s main export markets in July 2022 include Botswana (20.5%), South Africa (19.8%), China (10.0%), Zambia (8.8%) and the Netherlands (6.6%).
“Going forward, a deteriorating global outlook will weigh heavily on Namibia’s export potential. The latest manufacturing Purchasing Managers Indices (PMIs) from Namibia’s main trading partners are on a downward trend. One of the main categories driving PMIs lower is a decline in export orders, taking manufacturing PMIs closer to the critical 50 index level which indicates contractions are more likely.
“The declining trend in the Eurozone, UK and US suggest a deceleration in activity in these advanced economies. Similarly, domestic demand is likely to remain subdued with Namibia’s GDP projected to grow by a modest 2.5% in 2022, weighing on import activity. However, inflationary effects are likely to keep the value of imports above exports for the remainder of the year, leading to further trade deficits,” Klein said.