Category Archives: Economic Research

Economic Research

Building Plans – November 2022

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191 building plans were approved by the City of Windhoek in November, representing a 27.1% m/m decline from the 262 building plans approved in October. In value terms, the approvals were valued at N$134.6 million, down 38% m/m from the N$157.3 million worth of plans approved in October. Year-to-date, 2,357 building plans worth N$1.71 billion have been approved, up 0.2% y/y in number terms but falling by 7.6% y/y in value terms compared to the same period last year. On a twelve-month cumulative basis, the number of approvals fell by 0.5% y/y to 2,455 and in value terms declined by 5.2% y/y to N$1.82 billion. 84 building plans worth N$42.7 million were completed in November.

148 additions to properties were approved in November valued at N$80.9 million, 34 fewer than the 182 units worth N$84.6 million approved last month. Year-to-date, 1,592 additions to properties worth N$865.8 million were approved, representing a 5.4% y/y increase in number terms and a 20.8% y/y jump in value terms. On a 12-month cumulative basis, 1,655 additions to the value of N$902.2 million were approved in November, 60 more than over the same period last year, and a 21.9% y/y increase in value terms. A total of 36 additions worth N$16.4 million were completed in November, up from the 36 additions worth N$9.94 million completed in October.

38 New residential units were approved in November, notably down from the 67 approved in October and the monthly average of 65 for the year. In value terms, N$48.5 million worth of residential units were approved during the month, representing a 23.2% m/m drop from the N$63.18 million approved in October and 54.0% less than a year ago. Year to date, 711 residential units valued at N$680.4 million were approved, representing a 12.0% y/y decline in number terms and a 29.8% y/y contraction in value terms. November saw 743 residential units approved over the last twelve months, an 11.3% y/y decline from the 838 units approved over the same period a year ago. In value terms, N$749.4 million worth of residential units were approved over the past 12 months, representing a 24.6% y/y decrease. 42 New residential units worth N$18.63 million were completed during November, down from the 52 residential units worth N$62.92 million completed in October.

5 New commercial and industrial units valued at N$5.18 million were approved in November, down from the 13 commercial units worth N$9.55 million approved last month. Year-to-date, 54 commercial and industrial buildings valued at N$158.9 million were approved, compared to the 34 commercial buildings worth N$160.3 million over the same period last year. This represents a 58.8% y/y increase in number but a 0.9% y/y contraction in value. On a rolling 12-month perspective, 57 commercial and industrial buildings valued at N$169.9 million were approved in November, compared to the 35 buildings approved worth N$186.5 million over the corresponding period a year ago. This represents an increase of 62.9% y/y in the number of units approved but an 8.9% y/y contraction in value. 6 Commercial and industrial units worth N$7.65 million were completed in November, the highest number of commercial and industrial units since May 2019 after only 2 units worth N$2.98 million were completed last month.

November saw the 12-month cumulative value of building plans approved continue to fall in both nominal and inflation-adjusted terms, as shown in the figure above. The 12-month cumulative value of both commercial and residential units approved dropped in November with the latter contracting for the 8th consecutive month on an annual basis.

The 12-month cumulative value of completed plans also dipped in both nominal and real terms, as displayed below. The cumulative number of building plans completed declined for the 19th consecutive month (year-on-year) to 1,004 in November.

The demand for the construction of new buildings hit a new low in November with the year-to-date value of building plans approved as the lowest value reported over the past decade. As observed last month, 2022 is on course to close out with the lowest annual building plan approval value over the past 10 years. We do not see support for a turnaround in construction demand in the short term. Instead, lacklustre construction activity is likely due to high inflation and ever-rising borrowing costs, conditions which are unfavourable to ignite demand for construction.

NCPI November 2022

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Namibia’s annual inflation rate slowed marginally to 7.0% y/y in November. Prices in the overall NCPI basket rose by 0.5% m/m, the quickest since July. Year-on-year, overall prices in seven of the twelve categories rose at a quicker rate in November than in October, three categories experienced slower rates of inflation and two categories posted inflation rates consistent with those in October. Goods inflation came in at 9.6% y/y, slowing for a third consecutive month. Services inflation, while fairly lower than goods inflation, rose for a fifth consecutive month to 3.4% y/y in November.

Contributions to the 7.0% y/y inflation print were relatively stable across the majority of the basket item categories. The largest movement was from the contribution of the alcohol and tobacco category dropping from 0.91ppt in October to 0.67ppt in November.

Transport inflation ticked up to 2.0% m/m and 18.3% y/y, following the 198c per litter increase in the price of Diesel that came into effect at the beginning of November. The basket item contributed 2.7ppt to the annual inflation rate. All three sub-categories recorded quicker inflation on an annual basis than in October. The purchase of vehicles sub-category recorded price increases of 0.8% m/m and 3.8% y/y. Prices in the operation of personal transport equipment sub-category rose by 2.8% m/m and 27.3% y/y. After recording an over-recovery of 125 cents per litre on diesel in November, the Ministry of Mines and Energy lowered diesel prices in-kind at the beginning of December while leaving petrol prices unchanged, which should ease inflation in this sub-category in December. The last two months have seen the brent crude price retrace to February levels in ZAR terms, which should lead to softer transport inflation in the coming months, should it remain at current levels. Prices in the public transportation services sub-category climbed by 0.2% m/m and 7.1% y/y.

Food & non-alcoholic beverages were the second largest contributor the annual inflation rate, contributing 1.8ppt to November’s print. Prices in this basket item rose by 0.6% m/m and 9.4% y/y. All thirteen sub-categories in this basket item recorded price increases on an annual basis for the 11th consecutive month. Fruit saw the largest prices increase on an annual basis, rising by 19.6% y/y, followed by the prices for oils and fats which rose by 18.3% y/y. Inflation for both sub-categories were however slower than the 21.6% and 24.6% respective annual rates recorded in October.

Alcohol & tobacco inflation eased from 6.7% y/y in October to 4.8% y/y in November. Prices of the basket item rose by 0.2% m/m. Alcoholic beverages posted inflation of 0.2% m/m and 5.0% y/y, driven primarily by price increases of 21.2% y/y on white spirits. Tobacco prices, meanwhile, rose by 0.3% m/m and 4.1% y/y, attributable of cigarette inflation of 5.7% y/y, compared to pipe tobacco prices which are down 0.4% y/y.

While easing somewhat, the Namibian annual inflation rate continues to trend above the SARB’s target ceiling of 6.0%. The Bank of Namibia’s MPC decision in November to not hike rates by as much as the SARB did (50bps compared to the SARB’s 75bps) came as somewhat of a surprise, but will be welcomed by indebted consumers and businesses as it softens the blow to some extent. After the rate announcement, the governor of the BoN explained that when the MPC were analysing the incoming monetary, financial and economic data at the last monetary policy review, the members had the benefit of seeing the forecasts for the forthcoming SACU receipts for 2023, which indicated that the total amount that Namibia will be receiving will be significantly higher in 2023.

He further added that the inflation rate seems to be levelling off and that forecasts are showing oil prices remaining relatively muted for at least the next six months. The governor specifically mentioned that they do not expect much changes from the 25bps differential between Namibia and South Africa’s repo rate in terms of capital outflows. We however do not foresee the BoN deviating from the SARB much going forward.

IJG’s inflation model currently forecasts Namibia’s annual inflation rate to further ease to around 6.8% next month, and for the rate to continue steadily slowing during the course of 2023, before reaching around 4.0% at the end of 2023.

New Vehicle Sales – November 2022

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1,045 new vehicles were sold in November, up 4.9% m/m from the 996 vehicles sold in October, and an increase of 38.4% y/y from the 755 vehicles sold in November 2021. Year-to-date, 9,973 new vehicles have been sold, of which 5,072 were passenger vehicles, 4,265 light commercial vehicles, and 636 medium and heavy commercial vehicles. On a twelve-month cumulative basis, a total of 10,707 new vehicles were sold at the end of November, representing a 13.9% y/y increase from the 9,397 sold over the comparable period a year ago.

A total of 531 new passenger vehicles were sold during November, 65 more than the 466 sold in October, and an increase of 29.4% y/y from the 379 vehicles sold in November last year. Toyota once again took the spoils in this segment after amassing 35.8% of the new passenger vehicle sales in November, followed by Volkswagen which accounted for 14.9% of the sales. Year-to-date, new passenger vehicle sales rose to 5,072, a 23.0% y/y jump from the 4,122 vehicles sold during the same period last year. On a 12-month cumulative basis, new passenger vehicle sales grew by 21.9% y/y to 5,434, a level last observed in 2018.

514 new commercial vehicles were sold in November, 16 fewer than in October but up by 36.7% y/y from the 376 commercial vehicles sold in November last year. Light commercial vehicle sales fell by 2.8% m/m to 447 but increased by 41.5% y/y when compared to the 317 sold a year ago. Medium commercial vehicle sales rose by 8.3% m/m to 26 and up by 44.4% y/y when compared to the 18 sold in November last year. Heavy commercial vehicle sales however declined by 10.9% m/m to 41 and down by 2.4% y/y from the 42 sold in November 2021. On a twelve-month cumulative basis, light commercial vehicle sales increased by 9.6% y/y to 4,580, while medium commercial vehicle sales fell by 2.0% y/y to 194 and heavy commercial vehicles decreased by 11.7% y/y to 499. November saw a new entrant in the heavy commercial vehicles category with JAC recording its first sale in this segment.

Toyota continues its dominance in the new passenger vehicle sector with 33.2% of the segment’s sales year-to-date, followed by Volkswagen with 21.4% of the market share. Kia and Suzuki are the best of the rest with 9.2%, and 7.7% of the market share while the other brands account for the remaining 28.5%.

On a year-to-date basis, Toyota also maintained its reign in the light commercial vehicle space with 47.4% of the segment’s sales year-to-date, followed by Ford with 12.2% of the market share and Nissan with 11.8%. Hino continued its dominance in the medium commercial vehicle segment with 30.7% of sales year-to-date while its closest competitor, Mercedes, accumulated 21.6% of the sales in this segment year-to-date.  In the heavy and extra-heavy commercial vehicle market, Scania retained the top spot with 25.2% of the market share, followed by Volvo Trucks with a 22.4% market share.

The Bottom Line  

New vehicle sales grew from last month and breached the 1,000 new vehicle sales mark for the fourth time this year. The 1,045 new vehicles sold in November was the highest number recorded for November since 2018. The year-to-date chart at the top of this report shows that new vehicle sales have surpassed the total number of new vehicles sold for the whole of last year and are well on track to beat the 10,000 annual total new vehicle sales mark which was last observed in 2019. Unless a very dismal sales figure is recorded in December, total sales for 2022 are expected to come in above the 10,415 total new vehicles sold in 2019.

November’s strong vehicle sales came on the back of solid passenger vehicle sales. The 531 new passenger vehicles sold in November was the highest monthly sales number recorded so far this year and brought the average monthly figures for the year to date to 461 and on par with the numbers last seen in 2018. New commercial vehicle sales, in contrast, saw a slight contraction in November but remained relatively strong, nonetheless. Despite the drop, the 514 new commercial vehicles sold in November came in above the 446 sold on average each month for the year to date. On a 12-month cumulative basis, 5,273 new vehicles were sold but continue to lag the pre-pandemic 2019 average of 6,300 with little support for a recovery soon.