Category Archives: Economic Research

Economic Research

Building Plans – February 2022

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The City of Windhoek approved 219 building plans in February, representing a 24.4% m/m increase from the 176 building plans approved in January. In monetary terms, the approvals were valued at N$156.3 million, a 21.5% m/m increase. Year-to-date 395 building plans worth N$285.0 million have got the nod, an increase in number of 15.2% y/y and 14.9% y/y in value terms. On a twelve-month cumulative basis, 2,503 buildings with the value of N$2.00 billion were approved, an increase of 8.9% in number and 18.6% in value terms over the prior 12-month period. 144 building plans worth N$53.1 million were completed during the month.

In terms of both number and value of approvals, additions to properties once again made up the largest portion of approvals. For the month of February 132 additions to properties were approved with a value of N$76.8 million, 1 more than in February 2021. The value of the additions approved is 8.8% higher than during the same month last year. 104 Additions worth N$20.6 million were completed during the month.

New residential units were the second largest contributor to the number and value of building plans approved with 83 approvals registered in February, 9 more than in January. In value terms N$76.2 million worth of residential units were approved in February, a 59.6% m/m increase. On a year-on-year basis the value of approvals is however 17.9% lower than registered in February 2021. On a 12-month cumulative basis the number of residential units approved increased by 17.5% y/y to 860, although this number has been ticking down since May last year when it stood at 933. 40 New residential units worth N$32.6 million were completed in February.

4 New commercial units valued at N$3.6 million were approved in February. This compares to 3 units valued at N$505,000 approved in February 2021. Year-to-date there have been 7 commercial building approvals valued at N$8.8 million, which translates to a 75.0% y/y increase in number and 17.0% y/y increase in value terms compared to the same period last year. These increases are from an evidently low base low base. On a rolling 12-month perspective, the number of commercial and industrial approvals increased to 40 units worth N$172.7 million, compared to the 26 approved units worth N$180.8 million over the corresponding period a year ago. No commercial and industrial units were completed in February.

The 12-month cumulative number of building plans increased by 8.9% y/y in February to 2,503. While this in an increase from the prior 12-month period, it has been hovering around the current level since April last year, showing nearly no meaningful improvement since then. Residential approvals have recorded a decent recovery in 2021 following the slowdown in 2020, but has too stagnated at current levels on a 12-month cumulative basis in both number and value terms since April last year. As pointed out last month, the number of commercial and industrial approvals continues to trend in the low single digit territory and in value terms, commercial approvals have remained below the N$200 million mark on a cumulative 12-month basis for the last 13 months.

NCPI February 2022

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Namibian’s annual inflation rate slowed marginally to 4.5% y/y in February, following the 4.6% y/y increase in prices recorded in January. Prices in the overall NCPI basket increased by 0.2% m/m. On a year-on-year basis, overall prices in two of the twelve basket categories rose at a quicker rate in February than in January, eight recorded slower rates of inflation and two remained steady. Prices for goods increased by 5.5% y/y and prices for services increased by 3.0% y/y.

Transport was the largest contributor to the annual inflation rate in February, with prices in this category increasing by 1.0% m/m and 13.2% y/y. This basket item contributed 1.8 percentage points to the annual inflation rate in February. Prices in all three sub-categories recorded price increases on a year-on-year basis. The operation of personal transport equipment recorded the largest increase in prices of 1.7% m/m and 18.5% y/y. This was largely due to fuel prices being up 33.3% y/y in February.  The purchase of vehicles sub-category recorded slower inflation at 3.7% y/y while the prices of public transportation services rose by 9.6% y/y.

Food & non-alcoholic beverages, the second largest basket item by weighting, contributed 1.0 percentage point to the annual inflation rate in February. Prices in this basket item rose by 1.0% m/m and 5.4% y/y. All thirteen sub-categories recorded price increases on an annual basis. The biggest increases were recorded in the prices of oils and fats which rose by 13.5% y/y, followed by the prices of fruits, which increased by 12.6% y/y, and meat which increased by 7.2% y/y.

Alcohol and tobacco inflation slowed to 3.5% y/y in February from the 3.9% y/y increase recorded in January. On a monthly basis, prices in the basket item decreased by 0.8%. The alcoholic beverages sub-category recorded a price decrease of 0.6% m/m and up 3.4% y/y. Tobacco prices were down 2.0% m/m but rose 3.8% y/y.

February’s inflation print of 4.5% is the first month of (marginally) slower price increases following five consecutive months of rising inflation. Transport and food costs continue to be the main drivers of Namibian inflation, with the two categories contributing 62% to February’s annual rate.. IJG’s inflation model currently forecasts inflation to average between 3.4% and 5.0% in 2022, although the upper end of the range seems more likely at this stage as risks remain tilted to the upside.

New Vehicle Sales – February 2022

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A total of 883 new vehicles were sold in February, which is 178 more than were sold in January but represents a 1.1% y/y decrease from the 893 vehicles sold in February 2021. During the first two months 1,588 new vehicles have been sold, of which 843 were passenger vehicles, 632 light commercial vehicles, and 113 medium and heavy commercial vehicles. By comparison, the first two months of 2021 saw 1,586 new vehicles sold. 2022 is thus off to a similar start compared to last year. On a 12-month cumulative basis, new vehicle sales have grown by 22.0% y/y to 9,430.

439 new passenger vehicles were sold during February, an increase of 8.7% m/m from the 404 sold in January, and an increase of 6.8% y/y from the 411 vehicles sold in February 2021. On a 12-month cumulative basis, new passenger vehicle sales have increased by 36.5% y/y to 4,562. Encouragingly, on a year-to-date basis, new passenger vehicle sales for February have exceeded 2020 and 2021 levels, with the 843 sold so far this year, 78 more than in 2021 and 209 higher than over the same period in 2020.

444 commercial vehicles were sold in February, a 47.5% m/m increase but 7.9% y/y decrease. While all three sub-categories recorded better sales than last month, the monthly increase was primarily driven by a strong increase in light commercial vehicle sales of 37.6% m/m following the relatively sharp decline in January. Medium commercial vehicle sales rose by 23.1% y/y while heavy commercial vehicle sales fell by 7.5% y/y.  On a twelve-month cumulative basis, light commercial vehicle sales have increased by 6.6% y/y, medium commercial vehicles rose by 27.0% y/y, and heavy commercial vehicles recorded an increase of 46.7% y/y.

Toyota enjoys a strong lead in the passenger vehicle sales segment with a with a 40.3% of the segment sales year-to-date, followed by Volkswagen with 16.6% of the market share.  Both manufacturers have started the year off on a strong foot that will make it difficult for other manufacturers to catch up. They were followed by Kia and Suzuki with 8.1% and 5.6% of the market, respectively, leaving the remaining 29.4% of the market to other brands.

On a year-to-date basis, Toyota remained the leader in the light commercial vehicle space with a 57.8% market share. Nissan came in second place claiming a market share of 9.9%. Hino claimed 42.9% of the market for medium commercial vehicles, followed by Toyota with a market share of 19.0%. There appears to be relatively stronger competition in the heavy and extra-heavy commercial vehicle space as Scania, Volvo Trucks and MAN achieved market shares of 30%, 17% and 12% respectively.

The Bottom Line  

February’s new vehicle sales figure of 883 was the highest number since March 2021, when 919 new vehicles were sold. On a 12-month cumulative basis, new passenger vehicle sales have encouragingly increased 15 consecutive months, possibly reflecting a minor uptick in consumer confidence. As mentioned last month, the strong increase in commercial vehicle sales is positive news, as it indicates that a few companies and mines are starting to upgrade their fleets. This indicates improving business optimism. While we estimate new vehicle sales to be marginally higher than the previous two years as the economy starts recovering, we do not expect to see a major uptick in sales the short-term. The recently tabled 2022/23 national budget also indicated that the government will not be a major buyer of new vehicles in the coming financial year.