Category Archives: Economic Research

Economic Research

Building Plans – March 2021

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The City of Windhoek approved a total of 228 building plans in March, representing an 3.2% m/m increase from the 221 building plans approved in February. In monetary terms, the approvals were valued at N$158.1 million, a 3.6% m/m increase, while buildings with a value of N$94.3 million were completed during March, a 73.4% m/m increase. Although the number of building approvals for 2021 are 15.4% higher than the same period of 2020, the value of these approvals has fallen relatively sharply by 27.1% y/y, from N$556.7 million in 2020 to N$406.0 million in 2021. Year-to-date, the number of completed buildings rose to 296, a decrease of 13.5% y/y. The value of these completions are down 25.4% y/y from N$276.3 million in 2020 to N$206.3 million in 2021. On a twelve-month cumulative basis, 2,358 buildings with the value of N$1.7 billion were approved, an increase of 15.9% in number, yet a decrease of 13.8% in value, similar to the previous 3 months.  

In terms of number of approvals, additions to properties once again made up the largest portion of approvals, with 63 percent. For the month of March, 143 additions to properties were approved with a value of N$64.2 million, 11 fewer than in March 2020. The value of the additions approved in March is 11.0% higher than those observed in March 2020. 138 additions worth N$36.9 million were completed during the month.

New residential units were the second largest contributor to the total number of building plans approved in March, but the largest contributor in value terms. 81 new units worth N$86.9 million were approved in March, representing a 728.4% increase from the N$10.5 million worth of approvals in March 2020. On a 12-month cumulative basis, residential units recorded a 71.1% y/y increase in value. 68 new residential units worth N$52.0 million were completed during the month.

Four new commercial units, valued at N$7.0 million, were approved in March. This compares to 5 units valued at N$89.1 million approved in March 2020. Year-to-date, there have been eight commercial building approvals valued at N$14.5 million, which translates to a 15.4% increase in number terms and a 27.1% decrease in value terms compared to the same period last year. On a rolling 12-month perspective, the number of commercial and industrial approvals have slowed to 25 units worth N$98.7 million as at March, compared to the 63 approved units worth N$730.2 million over the corresponding period a year ago. Three commercial and industrial units worth N$5.5 million were completed in March.

The 12-month cumulative number of building plans approved increased by 15.9% y/y in March. A total of 2,358 building plans to the value of N$1.70 billion were approved over the last 12 months which represents a decline in value of 13.8% y/y. Additions to properties have made up 64.9% of the cumulative number of approvals, and 40.3% of the total value of approvals. Completed building plans, increased by 5.1% y/y in value terms to N$1.47 billion on a 12-month cumulative basis in March. Although 12-month cumulative value of approvals fell in March, residential building plans seem to have started gaining momentum, recording 10 consecutive months of year-on-year increases in the number of residential approvals, in which 7 of the 10 months recorded increases in value terms. In contrast, the commercial sector reflects Namibia’s uncertain business outlook, with only 8 commercial and industrial building approvals year-to-date. Furthermore, when factoring out commercial and industrial building approvals, the 12-month cumulative value of approvals rose by 28.8% y/y in March. On the one hand, this reflects the relatively strong recent growth witnessed in the residential plans approved, on the other hand, it raises concern about the country’s commercial sector, which made up 38.5% of the value of total approvals at the peak of the construction industry, in September 2013, compared to only 4.4% in March 2021.

NCPI – March 2021

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The Namibian annual inflation rate rose to 3.1% y/y in March, with prices in the overall NCPI basket increasing by 0.5% m/m. On a year-on-year basis, overall prices in six of the twelve basket categories rose at a quicker rate in March than in February and five of the basket categories recording slower rates of inflation, while education remained constant. Prices for goods increased by 3.9% y/y while prices for services rose 2.1% y/y.

Food & non-alcoholic beverages, the second largest basket item by weighting, continued to be the largest contributor to annual inflation, accounting for 1.2 percentage points of the total 3.1% inflation rate. Prices in this category increased by 1.2% m/m and 6.6% y/y. Prices in all the thirteen sub-categories recorded price increases on an annual basis. The largest increases were observed in the prices of meat which increased by 13.33% y/y, fruit which rose by 10.73% y/y and oils and fats, which increased 9.37% y/y.

The alcoholic beverages and tobacco basket item was the second largest contributor to the annual inflation rate in March, with prices increasing by 3.8% y/y. On a monthly basis, prices in this basket item fell by 0.2%. The alcoholic beverages sub-category recorded a price decrease of 0.4% m/m, but an increase of 2.5% y/y. Tobacco prices rose 0.5% m/m, and 9.8% y/y.

The housing and utilities, transport and miscellaneous categories each accounted for 0.30 percentage points of the total annual inflation rate in March. Price inflation for housing and utilities remained steady on a monthly basis but rose 1.1% y/y. The regular maintenance and repair of dwellings subcategory recorded an increase in prices of 6.4% y/y, which is a higher rate of increase than the 3.1% y/y registered the previous month. Prices in the electricity, gas and other fuels subcategory fell 0.4% y/y, while the annual inflation for rental payments rose to 1.3% y/y. Transport prices rose 2.0% m/m and 2.4% y/y, which was driven by vehicle purchase prices, which rose 8.0% y/y as well as the operation of personal transport equipment, which rose 3.4% m/m and 0.85% y/y. Prices in the miscellaneous category fell 0.1% m/m but rose 6.4% y/y.

Namibia’s inflation rate crept below the South African Reserve Bank’s lower target band of 3.0% for 16 consecutive months, before reaching 3.1% in March 2021. The 16 months of low inflation reflects Namibia’s depressed economy, which contracted further in 2020 due to Covid-19. During this time business activity declined, while unemployment rose, putting downward pressure on prices. Altogether, these factors created a lower base for prices, making increasing inflation inevitable in the recovery of the Namibian economy. Furthermore, rental prices declined 2.3% y/y between December 2019 and December 2020. Due to its 23.3% weighting in the overall basket its effect on overall inflation is amplified. Rental prices however rose 1.34% between December 2020 and March 2021, which increased overall inflation. IJG’s inflation model forecasts an average inflation rate of 3.5% y/y in 2021 and 3.6% in 2022, indicating a gradual increase in the inflation rate over the next two years and that inflation will likely remain relatively low over this period.

New Vehicle Sales – March 2021

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908 New vehicles were sold in March, an increase of 1.68% m/m from the 893 vehicles sold in February, and a 20.3% y/y increase from the 755 sold in March 2020. For the first three months of 2021 2,494 new vehicles have been sold, of which 1,122 were passenger vehicles, 1,192 light commercial vehicles, and 180 medium and heavy commercial vehicles. By comparison, the first three months of 2020 saw 2,221 new vehicles sold. 2021 is thus off to a slightly better start compared to last year. On a twelve-month cumulative basis, a total of 7,885 new vehicles were sold as at March 2021, representing a contraction of 23.3% from the 10,277 sold over the comparable period a year ago.

A total of 357 new passenger vehicles were sold during March, decreasing by 13.1% from the 411 passenger vehicles sold in February. On a year-on-year basis, March new passenger vehicle sales were 13.7% higher than the 314 vehicles sold a year ago. Year-to-date, passenger vehicle sales rose to 1,122, 18.4% higher than during the same period in 2020. On a rolling 12-month basis, passenger vehicle sales rose to 3,384. This translates into four consecutive months of increases in this measure.

A total of 551 new commercial vehicles were sold in March, representing an increase of 14.3% m/m and 24.9% y/y. 489 Light commercial vehicles, 24 medium commercial vehicles, and 38 heavy and extra heavy commercial vehicles were sold during the month. Light commercial vehicle sales rose 25.7% y/y, medium commercial vehicle sales climbed 4.3% y/y and heavy commercial vehicle sales increased by 31.0% y/y. On a twelve-month cumulative basis, light commercial vehicle sales have declined by 22.2% y/y, medium commercial vehicles fell by 42.7% y/y, and heavy commercial vehicles dropped 25.0% y/y.

Volkswagen continues its strong lead in the passenger vehicle sales segment with 34.9% of the segment sales year-to-date, followed by Toyota with 25.1% of the market share. The two top brands maintained their large gap over the rest of the market with Kia and Mercedes following with 7.0% and 5.1% of the market, respectively, leaving the remaining 27.9% of the market to other brands.

On a year-to-date basis, Toyota remained the leader in the light commercial vehicle space with a 53.5% market share, with Nissan in second place with a 13.8% market share. Ford and Isuzu claimed 12.0% and 6.7%, respectively, of the number of light commercial vehicles sold thus far in 2021. Hino leads the medium commercial vehicle segment with 26.1% of sales year-to-date, while Scania was number one in the heavy and extra-heavy commercial vehicle segment with 27.6% of the market share year-to-date.

The Bottom Line

March wrapped up the first quarter of 2021 with 908 new vehicles sold, the highest monthly sales figure since October 2019, when 976 new vehicle sales were sold. Total sales for the quarter were 2,494, making it the strongest quarter since the fourth quarter of 2019, when 2,567 new vehicles were sold. This is a positive sign, as vehicle sales continue to recover to pre-Covid-19 levels, which could indicate somewhat increased levels of consumer confidence. The rolling 12-month number of new vehicle sales rose for a third consecutive month to 7,885. The growth is however from a very low base and overall, 12-month cumulative sales is still down 65.2% from its peak in April 2015.