Category Archives: Economic Research

Economic Research

Building Plans – March 2022

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A total of 198 building plans were approved by the City of Windhoek in March, representing a 9.6% m/m decrease from the 219 building plans approved in February. The total value of approvals fell by 18.1% m/m to N$128.0 million. The year-to-date value of approved building plans reached N$413.0 million, 1.7% higher than in the first quarter of 2021. On a twelve-month cumulative basis, 2,473 building plans with a value of N$1.97 billion have been approved, an increase of 4.9% y/y in number and 15.7% y/y in value terms. The number of completions for the month of March stood at 116, valued at N$74.1 million.

Additions to properties, the largest portion of approvals in both number and value terms, made up 133 of the total 198 approved building plans recorded in March, one more than registered in February. In the first quarter of the year, 364 additions to properties have been approved with a value of N$208.5 million, a 5.5% y/y increase in number and 29.9% y/y value terms. 58 additions worth N$14.5 million were completed in March.

New residential units were the second largest contributor to the total number and value of building plans approved with 63 new units worth N$41.8 million being registered, representing a 51.9% y/y decrease from the N$86.9 million worth of approvals in March 2021. On a 12-month cumulative basis, the number of residential units approved increased by 4.9% y/y to 842. While the number of new residential building plans approved during the first quarter were two more than during the same period last year, the value of these approvals fell by 28.3% y/y. 56 new residential units worth N$51.9 million were completed during the month.

2 New commercial and industrial units, valued at N$30 million were approved in March. This is 2 units fewer than approved in February, but an increase of 823.1% m/m and 328.6% y/y in value terms, although the increases are from a very low base. The increase in value is due to a N$25 million building plan submitted by Vivo Energy Namibia. Year-to-date, there have been 9 commercial and industrial building approvals valued at N$38.8 million. On a rolling 12-month perspective, the number of commercial and industrial building approvals has increased to 38 units worth N$195.7 million as at March, compared to the 25 approved units worth N$98.7 million over the corresponding period a year ago. Two commercial and industrial units worth N$7.6 million were completed in March.

The 12-month cumulative number of building plans approved increased by 4.9% y/y in March. A total of 2,473 building plans to the value of N$1.97 billion were approved over the last 12 months which represents an increase in value terms of 15.7% y/y. Additions to properties continue to make up the majority of the cumulative approvals at 64.4% in number terms. The number of commercial and industrial approvals has continuously remained in the single-digit territory since March 2020, indicating a lack of investment from businesses. The first quarter of the year saw total approvals generally in line with those of Q1 last year, recording an increase of only 3.9% y/y in number and 1.7% y/y in value terms. Completed building plans decreased by 27.7% y/y in value terms to N$1.06 billion on a 12-month cumulative basis.

NCPI March 2022

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Namibian’s annual inflation rate remained steady at 4.5% in March. Prices in the overall NCPI basket increased by 0.6% m/m. On a year-on-year basis, overall prices in four of the twelve basket categories rose at a quicker rate in March than in February, with five categories recording slower rates of inflation and three categories recorded consistent with the prior month. Prices for goods increased by 5.7% y/y while prices for services increased by 2.9% y/y in March.

Transport was rather unsurprisingly the largest contributor to the annual inflation rate in March, contributing 1.9 percentage points to the total 4.5% y/y inflation rate. Overall prices in this basket item increased by 2.6% m/m and 13.8% y/y. All three sub-categories in this basket item recorded higher inflation on a year-on-year basis. The operation of personal transport equipment sub-category recorded the largest increase in prices of 4.1% m/m and 19.2% y/y, following the Ministry of Mines and Energy’s decision to increase petrol and diesel prices by 120- and 130 cents per litre, respectively, in March. Price of public transportation services rose by 9.8% y/y, marginally quicker than the 9.6% recorded in February, while the purchase of vehicles sub-category recorded inflation of 4.0 % y/y . We expect transport inflation to remain high over the medium term, as global oil supply remains tight amid the Ukraine crisis. 

Food & non-alcoholic beverages, the second largest basket item by weighting, contributed 0.9 percentage points to the annual inflation rate in March. Overall, prices in this basket item rose by 0.4% m/m and 4.6% y/y. All thirteen sub-categories recorded price increases on an annual basis. The largest increases were recorded in the prices of oils and fats which rose by 15.6% y/y, followed by the prices of fruits, which increased by 10.0% y/y, and  the ‘food’ sub-category which increased by 4.7% y/y. 

Prices in the alcohol and tobacco category, the third largest basket item by weighting, increased 4.1% y/y in March. On a monthly basis, prices in the basket item increased by 0.4%, following a 0.8% m/m decrease in February. The prices of alcoholic beverages increased 0.3% m/m and 4.1% y/y while tobacco prices rose by 0.7% m/m and 4.1% y/y.

Namibia’s annual inflation remains above its 12-month average of 4%. While March’s annual inflation rate of 4.5% remained unchanged from last month, the risk of rising inflation is high given the upward pressure expected on fuel and food prices, coupled with the fact that it is unlikely that interest rate hikes by the Bank of Namibia will significantly dampen these inflationary pressures in the near term. Transport and food remain the primary drivers of Namibian’s inflation, contributing 62% to country’s annual inflation rate in March. IJG’s inflation model currently forecasts inflation to average between 4.4% and 5.1% in 2022 with the upper end of the range more likely to materialise.

New Vehicle Sales – March 2022

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1,054 new vehicles were sold in March, which is 175 more than were sold in February and represents a 14.7% y/y increase from the 919 vehicles sold in March 2021. March’s sales figure is the first time since May 2019 that new vehicle sales have surpassed the 1,000 level. 2,645 new vehicles were sold during the first quarter, of which 1,375 were passenger vehicles, 1,099 light commercial vehicles, and 171 medium- and heavy commercial vehicles. By comparison, the first three months of 2021 saw 2,505 new vehicles sold. On a 12-month cumulative basis, a total of 9,568 new vehicles were sold as at March 2022, representing an increase of 21.2% y/y from the 7,896 sold over the comparative period a year ago, although it should be noted that this growth rate has been slowing since December last year.

529 new passenger vehicles were sold during March, an increase of 20.5% m/m from the 439 sold in February, and an increase of 44.5% y/y from the 366 vehicles sold in March 2021. Year-to-date, passenger vehicle sales rose to 1,375 in the first quarter, 21.6% higher than during the same period in 2021 and 45.0% higher than the first quarter of 2020. On a 12-month cumulative basis, new passenger vehicle sales have increased by 39.3% y/y to 4,728.

A total of 525 new commercial vehicles were sold in March, a representing an increase of 18.2% m/m but a decline of 5.1% y/y. The month-on-month increase was driven by a strong increase in light commercial vehicle sales, while both the medium- and heavy commercial vehicle subcategories recorded fewer sales than the preceding month. Light commercial vehicle sales fell 4.9% y/y, medium commercial vehicle sales dropped by 37.5% y/y while heavy commercial vehicle sales rose by 13.2% y/y.  On a twelve-month cumulative basis, light commercial vehicle sales have increased by 3.3% y/y to 4,083, medium commercial vehicles rose by 20.6% y/y to 193, and heavy commercial vehicles climbed by 44.6% y/y to 564.

Toyota continue to enjoy a strong lead in the new passenger vehicle sales segment, claiming 38.9% of the on a year-to-date basis, followed by Volkswagen with a 19.3% share and slightly up from the previous month. They were followed by Kia and Suzuki with 7.3% and 4.9% of the market, respectively, leaving the remaining 29.5% of the market to other brands.

On a year-to-date basis, Toyota remained the leader in the light commercial vehicle space with a 60.9% market share and an increase from the previous month. Nissan came in second place claiming a market share of 10.3%, also slightly higher than in the previous month. Hino remain the leader in the medium commercial vehicle space claiming 36.1% of the market share, followed by Toyota with a market share of 19.4%. Scania remained number one in the heavy and extra-heavy commercial vehicle segment with 30.4% of the market share year-to-date.

The Bottom Line  

As mentioned earlier, March’s sales figure is the first time since May 2019, that monthly new vehicle sales have surpassed the 1,000 level. It is worth noting that March new vehicle sales generally have a seasonal effect of being slightly higher than the surrounding months. Due to this seasonal effect, we expect to see monthly new vehicle sales to return to the levels witnessed in the last 18 months. On a 12-month cumulative basis, new passenger vehicle sales continued to increase, rising for the 16th consecutive month. On a monthly basis, new commercial vehicle sales encouragingly continued to tick up for a third consecutive month, although the March seasonal effect likely played a role here as well. 12-month cumulative new commercial vehicle sales have remained steady at the 4,100 level since April last year.