Namibia’s external sector remains under pressure:BoN

WINDHOEK: Namibia’s external sector remained under pressure during the first quarter of 2014 due to the rapid increase in import payments, which was not in line with the increase in exports.

The Bank of Namibia (BoN)’s Deputy Governor Edson Uanguta said in a media statement issued on Monday the external sector of the economy refers to international transactions which all residents of the country (private and public sector) conduct with the rest of the world.

Uanguta further said on a yearly and quarterly basis, the overall balance of payments (including valuation adjustments) recorded a deficit, mainly as a result of the widening current account deficit and a decreased surplus of the capital and financial account during the first quarter of 2014, which ended on 30 June.

He noted that the increased current account deficit mirrored a widening merchandise trade balance and increased net payment in services abroad.

Uanguta stressed that the country’s international reserves declined both quarter-on-quarter and year-on-year by 7.1 per cent and 1.7 per cent to N.dollars 14.5 billion, respectively, while import payments increased by 10.1 per cent and 21.6 per cent, respectively over the same period.

“As a result, the import cover reduced to 9.56 weeks during the first quarter of 2014, from 12.07 weeks in the same quarter of 2013,” said the deputy governor.

He indicated that on a yearly basis, the International Investment Position (IIP) recorded a rise in the net surplus position, mainly due to the increased Namibian private sector claims on non-residents.

Regarding the exchange rate, Uanguta said the Namibian dollar continued to depreciate against currencies of its major trading partners during the first quarter of 2014, thus supporting the country’s external competitiveness.