The secondary industries are projected to contract further in 2021 before recovering in 2022, the Bank of Namibia (BoN) economic outlook report for August 2021 indicates.
Secondary industries are projected to contract by 3.0 per cent during 2021, largely due to expected declines in electricity and water production as well as the construction sector.
Growth in secondary industries is expected to recover to 3.1 per cent in 2022, BoN said.
“Despite a recovery in water production, losses in electricity generation are expected to weigh heavily on the overall sector in 2021. Electricity production fell by more than 50 per cent during the first quarter of 2021, driven mainly by a sharp decline in power consumption by the mining sector and poor inflows of rain into Kunene River, which feeds the Ruacana Hydro plant, leading to lower power generation. The lower demand for electricity from the mining sector is attributed to poor performance recorded in the production of diamonds, zinc and gold during the period under review,” it added.
The manufacturing sector is projected to contract by 0.4 per cent in 2021 before growing by 2.8 per cent in 2022. The contraction during 2021 is expected to be driven primarily by productivity losses in the meat processing sector, which declined by 15.0 per cent during the first quarter of 2021.
Furthermore, the basic non-ferrous metals sector was also severely affected by the reduction in the processing of zinc and copper, with a decline of 89.3 per cent recorded in the subsector during the first quarter of 2021.
“However, strong recoveries in the production of non-metallic minerals, diamond processing and beverages are projected to partially offset the losses highlighted above. When compared to the February 2021 economic outlook update, significant downward adjustments to 2021 growth rates have been made on meat processing and basic non-ferrous metals to reflect year to date performance on marketing of cattle and small stock, as well as on the processing of copper blister. Conversely, 2021 growth for non-metallic mineral products was increased substantially, in line with an increase in cement production,” added BoN.
Source: Namibia Press Agency
