The Governor of the Bank of Namibia (BoN), Johannes !Gawaxab says despite public belief, the country’s economy is doing well compared to other South African Development Community (SADC) states.
!Gawaxab, while speaking during the announcement of the Monetary Policy Statement in Windhoek on Wednesday, said if one takes into account the prices of fuel and the inflation rates, Namibia ranks as one of the best performing economies in the region.
“Angola and Botswana have the lowest fuel prices, with Namibia and Rwanda having similar fuel prices, while South Africa has the highest amongst the seven countries in the region,” he explained.
He said in Angola, a litre of petrol is about N.dollars 5 while diesel is slightly above N.dollars 5.
On average, institutions are projecting the Brent crude price to average US.dollars 105 per barrel in 2022 and US.dollars 94 per barrel in 2023.
“This gives you an indication of what is happening in fuel prices because many people feel that our fuel prices are the only high prices. We need to understand that the Angolan government subsidises its fuel to a tune of US Dollars 3.5 billion annually,” he said.
He also explained that Namibia and South Africa have a lot of fuel levies which then affect consumer prices, with petrol and diesel averaging N.dollars 19.58 and N.dollars 20.12, respectively, in the last four months.
As a net importer of fuel, Namibia’s domestic pump prices, he continued saying, are highly dependent on external factors such as international prices for crude oil.
With regards to inflation, !Gawaxab said inflation in the SADC region remains high in 2022, with average annual inflation rising to about 8.6 per cent from 2021 up from about 6.3 per cent in 2020 thereby reaching the 7 per cent upper limit for the first time in two years.
“Factors that may change the inflation forecast are housing, utilities, geopolitics and what happens with fuel prices. The risks to the inflation outlook in Namibia are attributed to the increase in Brent Crude Prices due to the protracted war between Russia and Ukraine,” he explained.
Currently, inflation pressures in Namibia remain elevated in 2022. It is however expected to decline in 2023 on the back of oil prices.
Source: The Namibian Press Agency
