Observer Money

The Bank of Namibia’s stock of international reserves declined marginally by 0,7% month-month to N$55,4 billion at the end of February. The fall was on the back of higher net commercial bank outflows coupled with government payments. The foreign reserves translated into 3,9 months of import cover, continuing to remain above the international benchmark of three months and adequate to support the Namibia dollar and the South African rand currency peg. Notably, the import cover excluding imports of oil exploration and appraisal activities stood at 4,4 months at the end of February, relative to the 4,5 months recorded at the…

Namibia Breweries Limited plans to join the Heineken global platform in the next 12 months to enable the company to leverage scale for cost benefits in packaging and raw material as legacy contracts conclude. Heineken International, acquired majority control of Namibia Breweries in 2021 in a deal estimated at around N$6.56 billion. The move to join the Heineken global platform, comes at a time when revenue from beer sales in Namibia decreased, compounded by a steep decline in revenue contribution from South Africa, driven by aggressive pricing tactics from competitors, according to NBL’s consolidated results for the six months ended…

CHAMWE KAIRA The Bank of Namibia is conducting research on the potential implications for the macro economy and the potential implications for exchange rate and monetary policy by the production of oil and gas. Governor Johannes ǃGawaxab said this week that the central bank is also studying the impact of oil and gas on the management of the Welwitschia Sovereign Wealth Fund. The Fund now stands at N$425 million. Namibia is yet to start oil and gas production but exploration activities has so far contributed positively to economic growth. ǃGawaxab said the contribution expected to keep rising as explorations intensify…

Fitch Ratings recently affirmed Development Bank of Namibia Limited's (DBN) Long-Term Issuer Default Ratings (IDR) at 'BB-' and its National Long-Term Rating at 'AA+(zaf)'. Fitch said the outlooks are stable. Fitch said DBN's National Long-Term Rating of 'AA+(zaf)' is equalised with that of Namibia and reflects the bank's creditworthiness relative to that of issuers in South Africa and Namibia. The government has a high propensity to support DBN, given the bank's important policy role, 100% state ownership and significant share of government-guaranteed funding. The DBN is Namibia's flagship and largest policy bank and contributes to the country's economic growth and…

The Bank of Namibia has received one application from a local company partnering with other investors seeking authorisation to establish a banking institution, Deputy Governor, Leonie Dunn disclosed this week. Dunn said the application is being assessed to determine whether the applicants meet the requirements for authorisation to conduct a banking business. Observer Money established that the applicants include an investor from Ghana in West Africa. The current authorised banking institutions are Bank Windhoek, First National Bank Namibia, Standard Bank Namibia, Nedbank Namibia, Bank BIC Namibia, Letshego Bank Namibia and Banco Atlántico. The new Banking Institutions Act took effect on…

Martin Endjala Economist Josef Sheehama says that the recently announced hike in fuel prices by the Ministry of Mines and Energy will negatively impact the already struggling consumers. According to Sheehama, this will trigger inflation and the hike in oil prices will further stifle the growth of the economy through the supply and demand for goods. He added that the increase in oil prices will depress the supply of other goods due to the increase in the cost of production. “Oil price increases are generally thought to increase inflation and reduce economic growth. A rise in prices impacts the current…

Martin Endjala The Bank of Namibia (BoN) has announced a dividend of N$ 511.5 million to the State Revenue Fund for the 2023 financial year, an improvement compared to the N$413.7 million recorded in the 2022 financial year. The Bank’s Governor Johannes !Gawaxab, stated that despite a challenging global economic environment, the financial sector’s performance remained sound during 2023. With the stock of international reserves rising by 11.9 percent to N$53.2 billion. He made this announcement yesterday during the launch of its 2023 annual report in Windhoek. Stating that from N$ 47.6 billion recorded at the end of 2022 to…

CHAMWE KAIRA The country will have 990 MW of electricity added to the national grid if various renewable energy projects proposed before the Electricity Control Board for licensing come to fruition. Southern Africa Renewable Energy (Pty) Ltd has applied for four solar licences with a total of 600 MW at Aus, Mariental, Keetmanshoop and Naruchas. PMP Energy (Pty) Ltd has also applied for a solar generation at Ondangwa with a capacity of 12 MW while Omukwa Renewable Energy (Pty) Ltd has applied for a solar generation plant with a capacity 12 MW at Katima Mulilo. More projects include Sino Energy…

CHAMWE KAIRA Namibia will see the introduction of the first hydrogen powered train next year, a first for Africa. The National Planning Commission announced this week that after extensive negotiations, the contract has been finalized on the HyRail project. The project is spearheaded by TransNamib, Hyphen Technical and CMB Tech. and includes the University of Namibia (UNAM) as an academic partner. The project is expected to demonstrate the ‘use case’ of hydrogen in the rail transportation sector, in the form of dual fuel converted train. “The locomotive conversion is anticipated to commence in the latter part of the year, and…