Business Reporter
SIMONIS Storm Securities, a local stockbroker and wealth management firm, has stated that the government set a target of delivering 20,000 housing units by the end of 2025. However, according to Simonis Storm, it appears unlikely that this target will be met, given the current pace of construction by the National Housing Enterprise (NHE). Only 29% of this goal has been achieved, and the deadline is just two years away, as indicated in the Harambee Prosperity Plan.
According to statistics from the Shack Dwellers Association of Namibia in 2018, there are 308 informal settlements in Namibia with a staggering 228,000 shacks accommodating about 995,000 people in urban areas.
Simonis Storm made these remarks in their latest building statistics for August 2023, stating that the construction sector remains a weak contributor to GDP. The number of approvals decreased by 8.0% m/m, translating to a 15.7% y/y decrease in August 2023. “As mentioned in our previous report, we maintain our view that growth in the construction sector for 3Q2023 will be minimal. 2023, on average, records the lowest plans approved since 2020. This signals that the construction sector is contracting in Windhoek and Swakopmund. YTD, 20.6% fewer projects were approved compared to the same period last year and 3.6% fewer than in 2020,” Simonis Storm said.
In addition to this, the wealth management firm said that the total plans approved have been trending well above the 6-month average since May 2023, which could be a signal that a slight expansion is about to take place, albeit at a slow pace.
“The construction sector, represented by the Construction Industry Federation (CIF), has advocated for the establishment of a sector regulator since 2008. The absence of such a regulator has led to several adverse outcomes. Additionally, some real estate agents argue that the absence of a building council hinders effective quality checks on small-scale developments, thereby negatively impacting the overall value of the country’s housing stock,” Simonis Storm said.
The firm concluded that given this, the outlook on the construction sector remains bleak in the short term. However, green hydrogen and the oil and gas boom should boost the construction sector in the medium to long term, especially in areas such as Lüderitz and Oranjemund.
