The Namibian economy still has four years before it can recover, FNB Namibia Economist, Namene Kalili, said on Thursday.
Speaking during Stimulus Investments results’ presentation in Windhoek, Kalili said Namibia’s economic slowdown which has resulted in many job cuts across different sectors, will last for six years, of which two years have already passed.
“We still have four years to go,” he said.
According to the Preliminary National Accounts numbers, the local economy is estimated to have experienced negative growth of 0.8 percent last year.
A moderate recovery of about 1.2 percent is projected for this year, before picking up to above 2 percent in 2019 and 3 percent a year after.
Kalili said he expects the Bank of Namibia to continue with its accommodative policy, although he does not expect this to have any big impact on the economy.
He said he expects the government’s ballooned structure to remain largely intact with no job cuts due to elections to be held next year.
This comes as Finance Minister, Calle Schlettwein recently said government is going ahead with plans to cut its wage bill, through freezing recruitment and replacing vacant positions with those already within the civil service.
The public sector wage bill takes up almost 50 percent of national revenue, a situation which Schlettwein said ‘clouds out’ the ability of the government to provide services such as health and education.
According to figures provided by Kalili, after the upswing in GDP in 2013 and 2014, where growth was positive and hovered above four percent, GDP growth has been on the downswing, reaching the current negative growth.
Meanwhile, Stimulus CEO, Josephat Mwatotele, said the company was satisfied with the results achieved over the past financial year.
The company recorded revenues of N$36 million in 2017 compared to N$34 million in 2016, although profit declined to N$4,9 million compared to N$11 million in 2016.
“The negative macro-economic environment in Namibia resulted in 2017 being economically challenging for most Namibian businesses.
“GDP growth was negative, consumer confidence was low, and policy uncertainty negatively impacted companies' strategic deployment of capital. Although liquidity has improved somewhat, the Namibian economy remains in a vulnerable position and the outlook in the short to medium term remains challenging.”
The Stimulus portfolio delivered strong dividend payments totalling N$50.83 million for the year under review.
This was achieved by dividend payments by investee companies as well as the sale of the Joe’s Beerhouse property.
In 2017, Stimulus deployed additional capital of N$60 million within its portfolio as part of its approach to help investee companies grow their businesses, diversify, unlock value and support their long-term strategy.