Government deficit expected to increase

The Bank of Namibia (BoN) says the central government’s budget deficit will widen during the 2024/25 financial year.

According to the quarterly report by the BoN, the rise is due to an expected rise in expenditure compared to revenue.

“The widening of the deficit is attributed to the rise in central government expenditure, which is anticipated to slightly outpace the rise in revenue,” the report says.

The county’s current account deficit increased from N$5,4 billion to N$8,6 billion.

This shows Namibia is still spending more on the import of goods and services than it earns from exports.

“During the second quarter of 2024, the current account deficit widened by N$5,4 billion to N$8,6 billion, largely attributed to a merchandise trade deficit and higher net services account outflows,” the report says.

According to the report, the high net outflows were attributed to payments for services related to oil and gas exploration and appraisal activities.

The report also showed a decline in electricity generation, which hindered growth in the secondary industry.

“In the meantime, a moderate year-on-year decline in local electricity generation in the second quarter of 2024 hindered growth in the secondary industry,” it says.

The secondary sector comprises manufacturing, construction and processing.

According to the report, both the global and domestic economy have maintained a positive growth rate

“Growth in the second quarter of 2024 was sustained by the secondary and tertiary sectors, as the primary sector recorded a decline,” the report says.

BoN spokesperson Kazembire Zemburuka says there was an increase in most subsectors of manufacturing, such as cement, blister copper, beer and soft drinks, coupled with a recovery in government and private construction works.

“This contributed to the moderately positive growth in the secondary industry,” he says.

Zemburuka says the tertiary industry experienced growth, particularly in the wholesale and retail trade sector.

“This was supported by activities in sectors such as information and communication, hotels and restaurants, financial services, health as well as transport,” he says.