Barclays given permission to buy into Bank Windhoek

17 May – 15 June 2012

Namibia has a strong track record of attracting foreign investment and many well-known international companies play an active role in a wide variety of sectors, including agriculture, fishing, mining, manufacturing, construction, tourism, telecoms and financial services. The Namibian Constitution promotes foreign investment and protects private property. Every month Flamingo brings you a round-up of the most important business and economics news from Namibia put together by Robin Sherbourne of local economic consulting company Namibian Economics. To receive regular updates on the Namibian economy, email robin@namibianeconomics.com

Barclays given permission to buy into Bank Windhoek

Namibia’s mining sector generated US$1.6bn in mining export earnings during 2011, contributing about 11% to Namibia’s GDP, with the country’s uranium mining sector forecast to be the single largest mining sector in the country’s mining industry by 2015, according to a report by business research and consulting firm Frost & Sullivan.

The market value of the Government Institutions Pension Fund has grown in size more than four times over the past 10 years, reaching the N$50bn mark by the end of 31 March this year.

Namdeb has partnered up with SA Metal Namibia to embark on a scrap-metal removal programme from its mining areas to ensure the minimal impact of the waste on the environment.

The recent installation of three air-quality monitoring stations at the Dundee Precious Metals-owned Tsumeb Smelter is set to tackle its ‘unacceptably high’ sulphur dioxide (SO₂) emission levels as part of the facility’s N$560m environmental upgrade.

MTC rolled out the 4G LTE cellular telephony in Windhoek, a broadband network that is reportedly 10 times faster than the previous connection.

Local pelagic fish producer United Fishing Enterprises (UFE) received the first advanced purse seiner fishing vessel to be purchased in Namibia in decades. The MV Liafjell was welcomed at the port of Walvis Bay and is expected to improve efficiency in UFE’s operation and processes. The fishing vessel worth N$45m was obtained from Norway and is considered the most advanced fishing vessel found in Namibian waters.

Namibia had to make way for Niger as the world’s fourth biggest uranium producer in 2011, as local production dropped by nearly 38% compared to 2010. Namibia now holds the spot as the fifth biggest uranium producer globally, with total production in 2011 coming in at 3 258t or about 6% of the world’s total production.

Angola remains a key export market for Namibia Breweries, despite challenges such as lengthy cross-border processes, import duties and price competitiveness. According to NBL’s manager for Angola and Mozambique, Antonio Simoes, Angola is currently the third-largest clear-beer market in Africa.

The CEO of the Electricity Control Board Siseho Simasiku is concerned that the expiration of the contract between the Zimbabwe Electricity Supply Authority and NamPower will leave Namibia with a capacity shortage of 150MW. The contract is due to expire in 2014.

Brazilian oil start-up HRT Participacoes em Petroleo SA has hired a semi- submersible drill rig to drill oil and gas prospects off the coast of Namibia, but higher rental rates will push exploration costs in the region higher. HRT had originally expected to spend about US$70m to drill its first wells off the shore of Namibia, but those costs are about 25% higher now because oil exploration around the world has increased.

The optimism of Namibian companies about the outlook for business fell in April as vehicle sales declined. The IJG Business Climate Index fell 2.8 points to 118.2 in April from 121 in March, according to the Institute for Public Policy Research and IJG Securities.

Multibillion-dollar investments by the US Government through the Millennium Challenge Account (MCA) Namibia should be able to translate into greater trade between Namibia and the USA, with the full participation of the private sector, according to Cassandra Butts, senior advisor to the US governments’ Millennium Challenge Corporation.

Telecom launched its Speedlink, a spin-off of the West Africa Cable System (WACS). Speedlink will be a ‘game changer’ on the Internet service scene, according to Telecom Namibia MD Frans Ndoroma.

A N$20m shopping centre to be known as the Arandis Convenient Centre will be built in Arandis. The first phase of the centre, which will accommodate Shoprite, Penny Pinchers, Pep Stores and FNB, is expected to be completed within the next eight months.

The 2012 Namibian Business and Investment Climate Survey (namBiC) once again singled out the shortages of skilled labour as the biggest stumbling block for formal business, especially smaller companies, to advance.

Britain’s Barclays plans to buy a 49.9% stake in Namibia’s second-largest lender by assets, Bank Windhoek. According to Ebson Uanguta, the Bank of Namibia’s deputy governor, the value of the potential deal had not yet been determined, as Barclays was yet to start talks with the bank that holds more than US$2bn in assets.

Financial troubles eating deeper into the pockets of European and American consumers have hit local up-market tourist operators hard. The first Tourism Index, compiled by FNB Namibia and the Federation of Namibian Tourism Associations (Fenata), showed that growth in the local industry is dramatically lagging behind that of Europe. Whereas Europe’s tourism index grew 5% during the first quarter of 2012, the FNB Fenata Tourism Index was up only 0.2%.

Trachurus Fishing announced its new ‘strategic business direction’ as well as its new corporate identify, which will be visible on its vessels. Trachurus is a joint venture between various fishing companies owned by previously disadvantaged quota holders, as well as the more established Namsov Fishing.

Namibia will take its fight against a trade pact with the EU, which is perceived as unfair, to Germany. This is part of a campaign to lobby support against losing access to the lucrative EU market. Trade and Industry Minister Hage Geingob will meet with his counterpart in the German government to discuss, among other things, the EPA and the EU’s threat to cut Namibia’s market access by January 2014 if the country refuses to sign the controversial trade pact.

Namibia’s May inflation rate declined to 6.0% year on year and 0.2% month on month, the lowest level in six months, according to the Namibian Statistics Agency.

 This article appeared in the July ’12 Edition of FLAMINGO Magazine.