Author Archives: IJGResearch

Building Plans – March 2015

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Building Plans Feb 2015

A total of 274 building plans to the value of N$195 million were approved by the City of Windhoek in March 2015. On a year‑to‑date basis, 672 plans were approved compared to 643 plans over the same period last year. In value terms, plans approved year-to-date are worth N$462.3 million compared to N$795.0 million for the same period in 2013, down 41.8%. This year to date decrease in value of plans approved is mostly due base effects as three large commercial projects were approved by the municipality in February 2014. On a monthly basis, 61 more plans were approved in March than in February, and the total value of plans approved was up 13% m/m.

Building Plans Feb 2015 2

The 12 month cumulative number of plans approved reverted from the downtrend experienced for the last year and a half, rising to 2,875 compared to 2,749 in February. The 12-month cumulative value of plans approved totaled N$1.966 billion, down 18.6% y/y, with the base again having a drag effect.

Building Plans Feb 2015 3

In our view the construction sector will remain one of the leading growth and development sectors for 2015 in the Namibian economy, with both private sector and government having aggressive development plans. March plans building plan approvals are showing signs of this development and we expect this to continue. However, many such plans fall out of the Windhoek municipal area, and as such are not captured in the monthly building plan statistics.

Preliminary National Accounts, 2014

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The Namibian Statistics Agency yesterday released Namibia’s Preliminary National Accounts for 2014. The domestic economy is estimated to have registered a slower rate of growth, of 4.5% in real value added in 2014, compared to 5.1% recorded in 2013. The main drivers behind this growth slowdown were the secondary and tertiary industries that recorded growth o f 4.7% and 6.3% compared to 8.4% and 7.2% in 2013, respectively.

NamibiaGDP

These figures are far lower than our estimated growth of 6.9%, and appear somewhat different to the reality that can be seen on the street, in the various high frequency indicators monitored, company results and from the expansive policy position pursued by Government and the Central Bank. However, at the current point in time the accounts merely reflect preliminary data, which data is likely to be updated in the final version of the accounts.

Somewhat peculiarly, nominal GDP growth was excellent, at 16.7%, in line with the level seen in 2013. However, the deflator used to obtain real GDP was aggressive, at 11.7%, more than double the average consumer price inflation seen in 2014 (unfortunately, no producer price index yet exists for Namibia). By reducing this deflator (as we believe will be done in the final version of the National Accounts), real GDP growth would increase dramatically. It is our view that the deflators used over the past three years are inaccurate, resulting in a sizable understating of real growth in the local economy.

NamibiaDeflator

It is thus our belief that the current growth figures are notably understated, both on account of the aggressive deflator used, and incomplete data, and thus that the final accounts will see a sizable upward revision.

We are currently working on a more detailed review of the accounts, which will be released in coming days.

NamibiaGDPSupplyReal