Author Archives: IJGResearch

Building Plans – November 2014

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A total of 231 building plans to the value of N$130.1m were approved by the City of Windhoek in November 2014. On a year‑to‑date basis (January to November), 2,710 plans were approved compared to 3,136 plans over the same period last year. In value terms, plans approved year-to-date are worth N$2.053bn compared to N$2.105bn for the same period in 2013, down 2.5%. This decrease is mostly due to base effects. On a monthly basis, 10 more plans were approved than in October and the value of plans approved is up 50.1% m/m, coming of a notable low value in October.

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The 12 month cumulative number of plans approved continued to lose momentum during November, falling to 2,874 compared to 2,963 in October, with the year-on-year growth rate contracting by 12.7%, posting negative growth for the seventh consecutive month, as shown in the graph below. The 12-month cumulative value of plans approved totaled N$2.167bn, down 1.4% y/y.

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In our view, the construction sector will be one of the leading growth and development sectors in the Namibian economy for 2014, despite a slight decline in the building plans approved recently, as many development and construction plans fall out of the Windhoek municipal area, and as such are not captured in the monthly building plan statistics.

 

 

 

Namibia CPI – October 2014

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CPI

Annual inflation for October slowed by 0.3 percentage points, to 5.0 percent as compared to 5.3 percent recorded a month earlier. On a monthly basis, the inflation rate increased to 0.2 percent. The annual decline in inflation was primarily on account of base effects, with food inflation continuing to slow and transport prices remaining unchanged month-on-month. Housing utilities, the largest weighting in the CPI basket, also saw no growth during October.

Education has surpassed food and non-alcoholic beverages as basket category with the highest inflation, with the cost of tertiary education continuing to grow at a rate of 9.8% per year. The rate of growth of food and non-alcoholic beverage prices has declined for the past 5 months, whereas the cost of alcoholic beverages and tobacco continues to grow at an increasing pace. The Communications category continues to see prices decrease year on year (down 1.1%), and is thus the only category of expenditure seeing actual price declines.

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The decline in communications prices is a direct result of the low interconnection rates between operators within the country. The increased use of internet based communication has added further competition within the sector which has contributed to the decrease in prices.

Decreases in the global oil price are expected to filter through to the consumer in two parts over the next 18 months. First round effects should be felt in the next two months as fuel pump prices decline, while second round effects are expected to have a price-reducing effect on food prices 8-18 months out.

On account of falling oil prices, we have revised our forecast average inflation for 2014 to 5.4% in 2014, down from previous forecasts of 5.7%. We maintain our view that demand-factors are starting to lead inflation in Namibia, as strong growth in the economy with rural urban migration contributing to demand driven increases in prices. Administered and services prices are especially prone to increases caused by these effects. Recent unrest about the cost of housing is not likely to have a long term effect on the rate at which these prices grow but may have a short term influence on the rate of price increases.

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