Business Reporter
THE Namibian economy continued to demonstrate growth during the fourth quarter of 2023, with a real GDP expansion of 4.4%, exceeding the growth rate observed in 4Q2022 (3.3%).
According to analysts from Simonis Storm Securities, Halleluya Ndimulunde, this positive growth expansion suggests that underlying economic momentum remained solid.
“On an annual basis, 2023 closed with a real GDP growth rate of 4.2%. While this represents a moderation from the exceptional 5.3% growth recorded in 2022, it surpasses our earlier projection of 3.8% growth for the year. The growth rates for both 2021 and 2022 have been adjusted upwards. These revisions were widespread across 16 sectors of the economy, except for the ICT, professional, scientific, and technical services industries, as well as the administrative and support services sector. The reason for these exceptions is attributed to updates in data,” Ndimulunde said.
The analyst added that the deceleration in overall growth primarily originates from the primary and secondary industries, whereas the tertiary industry continues to show steady growth. Preliminary National Accounts data shows that the primary industries drove growth, albeit at a slower rate, with a 9.7% increase compared to 13.7% in 2022, now falling below 2018 levels. This slowdown in primary industries is mainly due to reduced demand for diamonds, leading to lower production levels. The growth rate of secondary industries also declined to 2.0% in 2023 from 3.4% in 2022, primarily due to a contraction observed in the manufacturing sector. Meanwhile, tertiary industries saw an improvement in growth, reaching 2.7% in 2023 compared to 2.2% in 2022, marking the highest growth rate since 2015. This growth was observed across most sectors. In terms of contributions to GDP, primary industries saw an increase to 22.2% in 2023 from 20.6% in 2022, while secondary industries increased to 15.6% from 15.2% in 2022. However, tertiary industries experienced a decrease to 53.4% in 2023 from 55.5% in 2022. Moreover, taxes less subsidies in products saw a moderate increase in contribution to GDP, rising to 8.9% from 8.7% in 2022. In 2023, the main drivers of GDP growth were the electricity and water sector, experiencing a notable expansion of 27.9%, a significant increase from 11.9% in 2022.
Additionally, the mining and quarrying sector contributed 18.9%, albeit showing a slowdown from the 24.0% recorded in 2022. The wholesale and retail trade sector also contributed positively with a 5.8% growth rate in 2023, along with the education sector at 3.5%. However, the construction sector emerged as the primary detractor from growth this year; the rate of decline improved to -0.2% in 2023 from -18.4% in 2022. Conversely, the agriculture sector experienced a negative growth rate of 11.3%, while manufacturing recorded -3.2%, and the public administration and defence sector -0.68%, weighing down heavily on overall economic growth.
The analysts further shared that GDP per capita, which represents a nation’s economic output per individual, is obtained by dividing the total GDP of a country by its population. “For Namibia in 2023, with a GDP of N$151,359 million and a population of 3,022,401, the GDP per capita is approximately N$50,042.26. However, it is essential to recognize that this figure alone does not capture the full spectrum of economic conditions within our borders. While it offers insight into the average economic productivity per person, it fails to account for disparities in income and living standards among the population. Therefore, relying solely on GDP per capita may present a somewhat distorted view of Namibia’s economic well-being,” Ndimulunde said.