Category Archives: Economic Research

Economic Research

Building Plans – April 2019

By | | ,
Comments Off on Building Plans – April 2019

A total of 170 building plans were approved by the City of Windhoek in April, 12 more than in March. In values terms, approvals rose by N$40.4 million to N$169.04 million in April from N$128.6 million worth of approvals in March. A total of 62 building plans were completed  at a value of N$55.2 million in April. Year-to-date, N$743.5 million worth of building plans have been approved, 41.3% higher than the corresponding period in 2018. On a twelve-month cumulative basis, 2,200 building plans were approved worth approximately N$2.06 billion, 7.0% lower in value terms than cumulative approvals in April 2018.

The largest number of building plan approvals in April were made up of additions to properties. 132 additions to properties were approved with a value of N$59.3 million, 24.3% more in value terms than in April 2018. Year-to-date 527 additions to properties have been approved with a value of N$300.0 million, a 19.3% y/y decline in value terms.

New residential units accounted for 32 of the total 170 approvals registered in April, an increase of 14.3% m/m compared to the 28 residential units approved in March. In value terms, N$33.8 million worth of residential units were approved in April, 5.3% more than the N$32.1 million worth of residential approvals in March. Year-to-date 121 residential units have been approved, 25 more than the corresponding period in 2018. In monetary terms, N$275.1 million worth of new residential plans have been approved year-to-date, an increase of 126.0% when compared to the corresponding period last year.

6 New commercial units valued at N$76.0 million were approved in April, bringing the year-to-date number of approvals to 14, worth a total of N$168.4 million. On al rolling 12-month perspective the number of commercial and industrial approvals have slowed to 43 units worth N$N$515.9 million as at April, compared to the 51 approved units worth N$680.0 million over the corresponding period a year ago.

In the last 12 months 2,200 building plans have been approved, increasing by 13.6% y/y in terms of number of approvals, but contracting by 7.0% y/y in terms of value. The growth in the cumulative number of plans approved has been driven mainly by approvals in additions to properties and new residential units which are of lower relative value. Growth in commercial and industrial construction activity remains extremely subdued as the decrease (on a 12-month cumulative basis) in credit extended to corporates also reflects.

Commercial banks currently carry a healthy monthly average liquidity position of N$3.79 billion, providing sufficient levels of loanable funds. Consumers and corporates alike therefore seem curtailed by waning appetite for credit, or are simply not meeting affordability requirements for loans with which to pursue construction projects. A lack of confidence in the economy is acting on both willingness to invest form individuals and corporates as well as appetite for risk from banks.

PSCE – April 2019

By | | ,
Comments Off on PSCE – April 2019

Overall

Total credit extended to the private sector (PSCE) increased by N$1.11 billion or 1.14% m/m in April, bringing the cumulative credit outstanding to N$99.1 billion. On a year-on-year basis, private sector credit extension grew by 6.71% in April, compared to 5.79% recorded in March. On a rolling 12-month basis, N$6.22 billion worth of credit was extended. N$2.86 billion worth of credit has been extended to corporates and N$3.80 billion to individuals on a 12-month cumulative basis, while the non-resident private sector has decreased their borrowings by N$199.1 million.

Credit Extension to Individuals

Credit extended to individuals increased by 7.0% y/y in April, an acceleration from the 6.3% y/y growth recorded in March. Most of the growth stems from an increase in shorter-dated debt, with overdraft facilities to individuals increasing by 0.9% m/m and 6.3% y/y. Other loans and advances recorded growth of 2.0% m/m and 21.2% y/y, while installment credit remained depressed, contracting by 1.2% m/m and 5.7% y/y. Mortgage loans to individuals grew by 0.4% m/m and 7.1% y/y.

Credit Extension to Corporates

Credit extension to corporates grew by 2.1% m/m and 7.7% y/y in April. On a rolling 12-month basis, N$2.86 billion was extended to corporates as at the end of April compared to N$2.05 billion as at the end of March. The month-on-month increase was mostly driven by corporates making use of short-term credit facilities, in particular overdrafts, which increased by 4.7% m/m and 9.0% y/y. Other loans and advances, which consists of credit card debt, personal and term loans, extended to businesses increased by 4.7% m/m and 26.2% y/y. Mortgage loans extended to corporates contracted by 0.8% m/m, but increased by a low 0.1% y/y.

Banking Sector Liquidity

The overall liquidity position of commercial banks increased by N$31.4 million to an average of N$4.15 billion during April from N$4.11 billion in March. According to the Bank of Namibia (BoN), the increase is attributable to SACU receipts, coupled with increased mineral proceeds during the period under review. The improved liquidity resulted in a further decrease in use of the BoN’s repo facility by commercial banks, with the outstanding balance of repo’s decreasing from N$479.3 million at the start of April to N$385.7 million by month end.

Reserves and Money Supply

Broad money supply rose by N$9.91 billion or 10.2% y/y in April following a 6.9% y/y increase in March, as per the BoN’s latest money statistics release. Foreign reserve balances rose by 4.9% m/m to an all-time-high of N$34.2 billion in April. The BoN stated that the increase is largely due to the increase in the SACU receipts.

Outlook

Private sector credit extension growth remained depressed at the end of April, increasing by 6.7% y/y. From a 12-month rolling perspective, credit issuance is up 13.1% from the N$5.51 billion issuance observed at the end of April 2018, with individuals taking up most (61.0%) of the credit extended over the past 12 months. Most of the growth in PSCE for April stemmed from shorter-dated debt. Our expectation is for private sector credit extension to remain under pressure as both consumer and business confidence remains low.

We expect the BoN to follow the SARB’s MPC decision to leave the Repo rate unchanged at its next MPC meeting later this month. Interest rates, however, remain accommodative and further rate cuts are unlikely to result in a meaningful increase in the uptake of credit.

Building Plans – March 2019

By | | ,
Comments Off on Building Plans – March 2019

A total of 158 building plans were approved by the City of Windhoek in March, 14 fewer than the 172 approvals recorded in February. The value of approvals was N$44.5 million lower at N$128.6 million in March, a 25.7% m/m decrease. The number of completions for the month of March stood at 37, valued at N$75.0 million. The year-to-date value of approved building plans reached N$574.5 million, 33.7% higher than in the first quarter of 2018. On a twelve-month cumulative basis, 2,194 building plans have been approved as at the end of March, an increase of 14.5% y/y. The 12-month cumulative value of plans approved reached approximately N$1.98 billion, a decrease of 11.0% y/y.

Additions to properties made up 127 of the 158 approved building plans recorded in March. This is a 7.3% m/m decrease in additions from the 137 additions recorded in February. Year-to-date 395 additions to properties have been approved with a value of N$240.8 million, a 25.7% y/y drop in terms of value.

New residential units were the second largest contributor to the number of building plans approved with 28 approvals registered in March, a 12.5% m/m decrease compared to the 32 residential units approved in February. In value terms, N$32.1 million worth of residential units were approved in March, 22.5% less than the N$41.4 million worth of residential approvals in February. 89 New residential units have been approved in the first quarter of 2019, 48% more than during the corresponding period in 2018. The year-to-date value of residential approvals reached N$241.3 million, 198.6% higher than during the first quarter of 2018.

Commercial and industrial building plans approved in March amounted to 3 units, worth N$6.1 million. This is the same number of units approved as in the prior month, but a decrease of 62.4% m/m and 15.9% y/y in value terms. Year-to-date, 8 plans for commercial and industrial purposes have been approved, valued at N$92.4 million. On a rolling 12-month perspective the number of commercial and industrial approvals have slowed to 38 units as at March, compared to the 54 approved over the corresponding period a year ago.

The 12-month cumulative number of building plans approved increased by 14.5% as at the end of March when compared to the corresponding period in 2018. A total of 2,194 building plans to the value of N$1.98 billion were approved over the last 12 months which represents a decrease in value of 11.0% y/y. The number of building plans approved, on a cumulative 12-month basis, has been increasing steadily since December 2017, but the value of cumulative plans has been decreasing since May 2018. We expect the economy, and construction activity as a result, to remain under pressure over the short-term, as both consumer and business confidence remains low.