Category Archives: Economic Research

Economic Research

Building Plans – March 2020

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A total of 169 building plans were approved by the City of Windhoek in March, representing a 17.6% m/m decrease from the 205 building plans approved in February. In monetary terms, the approvals were valued at N$142.5 million, a decrease of N$82.4 million compared to last month. The number of completions for the month of March stood at 275, valued at N$218.4 million. The year-to-date value of approved building plans reached N$556.7 million, 3.1% lower than in the first quarter of 2019. On a twelve-month cumulative basis, 2,035 building plans have been approved as at the end of March, a decrease of 7.2% y/y. The 12-month cumulative value of plans approved reached approximately N$1.97 billion, a decrease of 0.5% y/y.

Additions to properties made up 154 of the total 169 approved building plans recorded in March. This is a 6.1% m/m decrease in additions from the 164 additions recorded in February. In the first quarter of the year 416 additions to properties have been approved with a value of N$172.9 million, a 28.2% y/y drop in terms of value. 241 additions worth N$190.0 million were completed during the month.

Only 10 new residential units were approved in March, 18 units fewer than in February and the lowest number of approvals in a single month since December 2015. In value terms, N$10.5 million worth of residential units were approved in March, 90.3% less than the N$108.6 million worth of residential approvals in February. 55 New residential units have been approved in the first quarter of 2020, 38.2% less than during the corresponding period in 2019. The year-to-date value of residential approvals reached N$136.9 million, 43.3% lower than during the first quarter of 2019. 33 new residential units worth N$22.9 million were completed during the month.

Commercial and industrial building plans approved in March amounted to 5 units, worth N$89.1 million. This is 8 units fewer than approved in the prior month, but an increase of 306.2% m/m and 1,355.1% y/y in value terms, although this is from a low base. Year-to-date, 24 plans for commercial and industrial purposes have been approved, valued at N$247.0 million. On a rolling 12-month perspective the number of commercial and industrial approvals have increased to 63 units as at March, compared to the 38 approved over the corresponding period a year ago. One commercial and industrial unit worth N$5.5 million was completed in March.

Building plan approvals for Q1 of 2020 remained more or less in line with Q1 2019 with three more approvals in Q1 2020 compared to 2019, but a decrease of 3.1% y/y in terms of value at N$556.7 million. This data precedes the lockdown restrictions imposed by government.

Building Plans – February 2020

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A total of 205 building plans were approved by the City of Windhoek in February, 84 more than in January. In value terms, approvals rose by N$35.4 million to N$224.8 million in February from N$189.4 million worth of approvals in January. A total of 34 building plans were completed at a value of N$41.5 million in February. Year-to-date, N$414.2 million worth of building plans have been approved. On a twelve-month cumulative basis, 2,024 building plans were approved worth approximately N$1.96 billion, 1.2% higher in value terms than cumulative approvals in February 2019.

The largest number of building plan approvals in February were made up of additions to properties. 164 additions to properties were approved with a value of N$94.3 million, 18.4% less in value terms than in February 2019. Year-to-date 262 additions to properties have been approved with a value of N$129.9 million, a 13.5% y/y decline in value terms. 13 additions worth N$9.1 million were completed during the month.

New residential units accounted for 28 of the total 205 approvals registered in February, 11 more than the 17 residential units approved in January. In value terms, N$108.6 million worth of residential units were approved in February, 511.5% more than the N$17.8 million worth of residential approvals in January. It should however be noted that one of these residential approvals is a N$71.0 million project. Year-to-date 45 residential units have been approved, 16 fewer than during the corresponding period in 2019. In monetary terms, N$126.4 million worth of new residential plans have been approved year-to-date, a decrease of 39.6% when compared to the corresponding period last year. 21 new residential units worth N$32.4 million were completed during the month.

13 New commercial units valued at N$21.9 million were approved in February, bringing the year-to-date number of approvals to 19, worth a total of N$157.9 million. On a rolling 12-month perspective, the number of commercial and industrial approvals have increased to 61 units worth N$647.3 million as at February, compared to the 39 approved units worth N$449.0 million over the corresponding period a year ago. No commercial and industrial units were completed in February.

In the last 12 months, 2,024 building plans have been approved, down 6.5% y/y in terms of number of approvals, but up 1.2% y/y in terms of value. Year-to-date, the total value of building plan approvals was down 7.1% y/y from the corresponding period in 2019.

NCPI – June 2020

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The Namibian annual inflation rate remained at 2.1% in June, unchanged from May. On a month-on-month basis, prices increased by 0.2%, following the 0.4% m/m increase in May. Overall, prices in five of the twelve basket categories rose at a faster annual rate than during the preceding month, four at a slower rate and three grew at a steady pace. Price for goods rose by 2.5% y/y in June, while prices for services grew by 1.6% y/y.

The food & non-alcoholic beverages category displayed prices decreases of 0.3% m/m, but an increase of 4.7% y/y in June, making it the largest contributor to annual inflation, accounting for 0.84 percentage points of the total 2.1% annual inflation rate.  Prices in twelve of the thirteen sub-categories recorded increases on a year-on-year basis. The largest increases were observed in the prices of fruit which increased by 21.2% y/y and vegetables which increased by 11.7% y/y. The price of bread and cereals saw price decreases of 0.9% y/y.

The alcoholic beverages and tobacco basket item was the second largest contributor to the annual inflation rate in June, with prices of the basket item increasing by 1.4% m/m and 3.6% y/y. Prices for tobacco products decreased by 0.3% m/m, but increased 3.9% y/y. The prices of alcoholic beverages meanwhile rose by 1.8% m/m and 3.6% y/y.

The miscellaneous goods & services basket recorded inflation of 0.1% m/m and 6.3% y/y, and contributed 0.32 percentage points to the overall annual inflation figure. Only two subcategories showed price increases on a month-on-month basis, with personal effects increasing by 0.4% m/m and personal care rising by 0.2%. Prices in all the subcategories remained steady during the month.

The NSA’s regional CPI data shows that on a monthly basis prices increased by 0.2% in the northern zone 1, 0.2% in the central zone, and 0.1% in the mixed eastern, southern and western zone. On an annual basis the northern region recorded the highest inflation rate at 2.3% y/y in June, followed by the central zone at 2.1% y/y and the mixed zone 3 at 1.8% y/y.

Namibian annual inflation at 2.1% in June remains benign as economic activity remains weak after the relaxation of the lockdown restrictions, and is on par with South Africa’s May inflation figure of 2.1% y/y. South Africa’s inflation has breached the lower end of the SARB’s 3-6% target range in April, and remained at or below the 4.5% midpoint for 18 consecutive months. If the SARB expects inflation to trend at current levels for some time, it could decide to cut interest rates further. The market currently expects the SARB to cut rates by 25-50 basis points at its July MPC meeting next week, although a 25-basis point cut is more likely in IJG’s view. Regardless of the outcome, we expect the BoN to follow the SARB’s at its August MPC meeting, as Namibian inflation will likely remain muted for at least the rest of the year. IJG’s inflation model forecasts an average inflation rate of 2.2% y/y 2020 and 3.8% in 2021. The biggest risk to this forecast is fuel price increase due to the steady increase in the international oil price.