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A global rating firm has said Namibia’s economic growth is expected to gather momentum this financial year as a result of increased uranium and gold output. growth
In its latest report released last week, Fitch Ratings, also said Namibia’s economic prospects looked bright because of the massive development in the construction industry and the retail sectors.
It also affirmed the country’s long term foreign and local currency at BBB- and local currency Issuer Default Ratings (IDR) at BBB.
Namibia’s Country Ceiling was affirmed at A-, while the Short term foreign currency IDR was set at F3.
According to Fitch, these ratings reflect the country’s sound banking system, which is well capitalized and has a low ratio of non-performing loans.
The report further said Namibia economic outlook is stable.
“Namibia continues to post solid GDP growth (averaging 5.2 percent in 2010-14), far exceeding the ‘BBB’ and ‘BB’ medians. Although weaker commodity prices affected the mining and manufacturing sectors in 2014, overall economic performance in 2014 was boosted by strong domestic demand growth, including high public and private investment,” the report said.
It estimated the country’s budget deficit to widen slightly during this financial year to 3,9 percent of GDP, as expenditure picks up in line with higher wages and transfer outlays.
“The 2015/16 budget maintains an expansionary bias, in line with the new government’s development priorities,” said the report. “The deficit is projected at 5,3 percent of GDP, but given ongoing challenges in capex implementation, Fitch expects the deficit to stabilize around 4 percent in FY16.”
Fitch, however, expects the public sector debt to rise to about 30 percent by end of next year in accordance with government projections.
Furthermore, the report said, public guarantees for state-owned companies are projected to rise over the medium term (from 5,1 percent of GDP in 2014).
Fitch said it was unlikely that Namibia would be affected by the proposed revision to the Southern African Customs Union (SACU) revenue-sharing formula. Enditem

-Xinhua

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