Recession erodes Namibian mineral export earnings

NAMIBIAN MINERAL EXPORT EARNINGS CONTRACTED BY

A RECORD 15.1 PER CENT IN 2009 WHILE THE TOURISM

AND FISHING SECTORS ALSO RECORDED A DECLINE

SPECIAL REPORT BY XINHUA CORRESPONDENT CHRISPIN INAMBao

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WINDHOEK (Xinhua) -- Namibian mineral export earnings contracted by a record 15.1 percent in 2009 while the tourism and fishing sectors also recorded a decline, said the Finance Minister Saara Kuugongelwa-Amadhila.

On Tuesday the finance minister tabled before the National Assembly the national expenditure budget of Namibian dollars 28.8 billion billion U.S. dollars) for 2010-2011 period.

The national budget for 2010-2011 has 7.1 percent deficit for the 2010-2011 financial years.

Total expenditure for the year stands at 28 billion Namibian dollars, against estimated revenues of 23 billion Namibian dollars.

With the development budget for the 2010 to 2013 financial years estimated at 16 billion Namibian dollars.

"The global economy has experienced significant downturn in the past two years as a result of the global financial crisis.

"Most advanced economies went into a recession, causing a reduction in the global demand and a decrease in commodity prices," Kuugongelwa- Amadhila told the National Assembly when she tabled the 2010 budget.

"As a result, global output is estimated to have contracted by 0.8 percent in 2009.

"The outlook for 2010 is, however, positive with output growth projected to recover to 3.9 percent.

"Such recovery is, however fragile as it is subject to many risk factors and a sustainable recovery may only be attainable over the medium term,"noted the minister.

She also said although the impact of the global financial crisis on African economies was initially estimated to be limited, Sub-Saharan Africa’s economy slowed down significantly to 1.5 percent in 2009 from a robust growth of 5.7 percent in 2008," she said.

Economic growth in 2010 is expected to recover to 4.3 percent lead by oil-rich Angola whose economic growth is projected to grow by 9.3 percent in 2010, she stated.

Within SADC, the Namibian finance minister pointed out, South Africa’s economy contracted by 2.2 percent in 2009 largely due to that country’s high level of integration with global financial markets and subdued external demand for its exports.

She said because of the global economic downturn Namibian mining and manufacturing sectors were the hardest-hit and this impacted on its balance of trade.

Inflation in Namibia averaged 8.8 percent in 2009 and due to easing inflation pressure since 2008 the Bank of Namibia relaxed its monetary policy stance.

"Inflation pressures are expected to ease during 2010, but rising international energy prices may cause inflationary pressures (in Namibia) during the second half of the year (2010)," she told the National Assembly comprising of Cabinet ministers and opposition.

She was however optimistic that with the rebound of the global economy and government interventions, the medium term prospects look positive and that growth is projected at 3.8 percent for 2010 and at an average of 4.2 percent per annum for the 2011-2013 period to be driven by private and government investments and exports.

The primary and secondary industries are projected to grow on an average of 4.4 and 5.0 percent respectively, while the tertiary industries on the other hand will grow 4.2 percent.

She announced that in its quest to promote rural development the government has appropriated increased the monthly grants it pays to orphans and other vulnerable children from Namibian dollars 200 per child each month to 230 Namibian dollars in addition to the state-funded school feeding program.

While the beneficiary number of 160 000 Namibian orphans currently receiving state grants will be increased to 200 000 orphans by the year 2013.

While health and the education sectors received the lion’s share of the budgetary allocation the amount set aside for rural development to accelerate the provision of proper sanitation infrastructures in rural areas and in small towns, villages and in informal urban areas is an amount of an extra 257 million Namibian dollars.

While the National Housing Enterprise a low-income housing scheme was allocated a sum of Namibian dollars 50 million to provide low-income houses.

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