Trade deficit increase a concern: Shiimi

WINDHOEK: The rapid growth in imports of vehicles, partly financed by instalment credit, remains a concern in Namibia.

“This has put pressure on the international reserves of the country and requires monitoring,” Bank of Namibia (BoN) Governor Ipumbu Shiimi stressed during the monetary policy announcement in Windhoek on Wednesday.

In light of this development, the Monetary Policy Committee (MPC) decided to increase the repo rate by 0,25 percentage points to 5,75 per cent.

During the first quarter of 2014, the trade deficit increased significantly and a rapid growth in imports of vehicles remains a concern, Shiimi reiterated.

The total number of vehicles sold during the first four months of 2014 increased by more than 50 per cent compared to the same period in 2013.

The value of imported vehicles amounted to N.dollars 2,2 billion, which is a significant amount in relation to the total import bill of goods of N.dollars 15,9 billion.

“Unproductive imports have put pressure on international reserves of the country and require monitoring,” he stressed.

He indicated that targeted interventions have been recommended to the relevant authorities, but this may take time to implement due to legislative changes required once agreed on.