Our comprehensive assessment of Namibia's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Namibia, as well as the latest industry developments that could impact Namibia's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Namibia before your competitors.

Country Risk

Namibia Country Risk

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Core Views:

  • Strong domestic demand and accelerating investment in the mining sector will see economic growth in Namibia average a respectable 4.5% annually over the next five years. Over the near term, export performance will continue to be weighed down by weak global demand and soft commodity prices.

  • We expect the ruling SWAPO to secure a comfortable victory in November's general elections, with the party likely to maintain its broadly pro-business economic agenda in the years ahead. A weak and under-funded opposition will preclude anything other than a minor swing away from the ruling party.

  • Our broad outlook for Namibia's current account over the next few years remains relatively unchanged. We maintain that the country will sustain a sizeable current account shortfall over our 2014-2018 forecast period as demand for imports...

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Namibia Operational Risk Coverage (9)

Namibia Operational Risk

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From a regional perspective, Namibia is a safe and politically stable country. Although crime in the form of pick-pocketing, purse snatching and burglaries are relatively common, crimes to the person tend to be forms of domestic violence as opposed to targeted attacks. In addition, the country has an extremely low terrorism risk and a capable military. The country is considered low risk by the UK Foreign and Commonwealth Office Travel Advice, although it is advised that travellers exercise a sensible degree of caution. Consequently Namibia scores 66.8 out of 100 for its Crime and Security Risk, ranking it second in the Sub-Saharan African region behind Lesotho.

Crime in the capital city of Namibia, Windhoek, is high, with muggers often targeting foreign tourists. Attacks can take place in busy city centre locations in broad daylight, as well during late night journeys home. There have also been cases of credit card skimming at some hotels and...

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Namibia Crime & Security

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From a regional perspective, Namibia is a safe and politically stable country. Although crime in the form of pick-pocketing, purse snatching and burglaries are relatively common, crimes to the person tend to be forms of domestic violence as opposed to targeted attacks. In addition, the country has an extremely low terrorism risk and a capable military. The country is considered low risk by the UK Foreign and Commonwealth Office Travel Advice, although it is advised that travellers exercise a sensible degree of caution. Consequently Namibia scores 66.7 out of 100 for its Crime and Security Risk, ranking it second in the Sub-Saharan African region behind Lesotho.

Crime in the capital city of Namibia, Windhoek, is high, with muggers often targeting foreign tourists. Attacks can take place in busy city centre locations in broad daylight, as well during late night journeys home. There have also been cases of credit card skimming at some hotels and...

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Namibia Labour Market

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BMI considers Namibia's labour market to offer a number of opportunities to businesses looking to invest in Sub-Saharan Africa. A relatively high life expectancy, good rates of female participation in the labour force, strong literacy rates, low labour tax and contributions and minimal severance pay costs make the country a highly attractive location for businesses to invest in. However, the country does pose risks in terms of its low enrolment rates in secondary and tertiary education, high unemployment, and uncompetitive annual leave costs. These risks increase costs to businesses due to the need to employ foreign workers, train unskilled labourers and compensate for holiday leave. Scoring 41.7 out of 100, the country ranks eighth in the region in our Labour Market Risk Index, between Cameroon and Uganda.

With a population size of just 2.2mn, Namibia offers a relatively small pool of employees compared to some other...

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Namibia Logistics

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With one of the most highly ranked logistics networks on the continent, Namibia has become a regional transport hub, particularly for its landlocked neighbours, which benefit from its well-developed port and road infrastructure. Significant investments are being poured into ongoing projects to further boost the country's port, airport, road and railway infrastructure in an effort to increase its international appeal, but businesses remain burdened by Namibia's lengthy and burdensome trade governance processes, which multiply costs, lead times and delays. The country's limited utilities capabilities also present a notable source of risk, particularly in Namibia's vulnerability to droughts, its expensive Internet services, and its dependence on power and fuel imports. As such, Namibia scores 46.4 out of 100 for Logistics, ranking fourth in the region, between Seychelles and Ghana.

Namibia's economic and trade growth represents a major source of...

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Namibia Trade & Investment

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Namibia is a regional outperformer for Trade And Investment Risk thanks to its openness to trade and a regulatory environment that is both clear and favourable towards foreign investors. The country is ranked seventh out of 44 countries in Sub-Saharan Africa (SSA), with a score of 50.6 out of 100. We attribute this to the high risks stemming from poor banking sector penetration and high levels of red tape when it comes to opening a business and registering property.

Economic Openness represents Namibia's highest risk segment in the Trade And Investment Risk Index, largely due to the country's limited banking sector which offers little credit for Namibians and hinders consumer spending and e-commerce development. There are just four main commercial banks in Namibia: Standard Bank, Nedbank Namibia, Bank Windhoek and FNB Namibia. Transaction costs for...

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Namibia Industry Coverage (11)

Agribusiness

Namibia Agribusiness

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BMI View:   We expect food security in South West Africa to improve over the short term , as we expect higher corn production from Zambia in 2014/15 . Over the medium term, we see downside risks to corn production in the region owing to new reforms introduced in Zambia that aim to reduce farm subsidies. Although this will help to improve the country's current account balance, it may lead to deteriorating food security across the region as farmers respond to lower prices. Even with reduced production incentives, we expect Zambia to easily remain the region's largest corn producer and exporter, while other countries in the region will struggle to maintain production surpluses. We see potential in the Angolan sugar sector due to recent...

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Autos

Namibia Autos

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Namibian auto sales ended 2013 on a high note. Sales grew 16.1%, to hit 15,895 units. This was higher than our full-year forecast of 10.0% growth. Of the 15,895 units, commercial vehicle (CV) sales were roughly 8,100 units (growth of 11.8%), and passenger car sales made up the remainder (growth of 21.3%).

One of the key drivers of growth in latter months of 2013 was government spending as fleet deals began to roll in, and we expect this to continue into 2014. To be sure, the recent legislation to increase the maximum age of second-age imports (from five to eight years) remains a downside risk. It will have the effect of bolstering an already robust used-car market as some consumers will now choose to import an affordable used car instead of purchasing of a more expensive new car.

However, the potential for CVs to perform better in 2014 means we maintain our 9.0% growth forecast for total vehicle sales in 2014.

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Commercial Banking

Namibia Commercial Banking

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Commercial Banking Sector Indicators 
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

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Food & Drink

Namibia Food & Drink

Infrastructure

Namibia Infrastructure

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BMI View:   Namibia's construction sector performs well within the region due to strong fundamentals with long-term growth of 10% per year forecast. In the near term the sector is expected to perform even bette r with stellar year-on-year (y-o-y) growth of 27. 7 5% for 2014.   We expect prolonged construction industry to be maintained owing to the government's major investment drives and strong natural resource demand.

Namibia's construction sector growth is being driven by a number of factors (listed below). The country has great potential and a building boom has seen a flurry of contracts signed and building permits approved. This acceleration in approvals is...

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Insurance

Namibia Insurance

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BMI View:  The Interim results for 2014 suggest an overwhelmingly positive year for both non-life and life sectors in the Namibian insurance market with many factors suggesting this period of strong growth will continue well on into 2015 and beyond. The industry has benefited substantially from effective management decisions made at the start of 2014 when larger firms such as Liberty and Old Mutual began tailoring, innovating and diversifying their product mix; a decision which has resonated very well with Namibian consumers based on current results. The oncoming regulation changes also should contribute to a more efficient industry in the future.

For the most part, Namibia remains a microcosm of the South African market and because of this many of the trends prevalent in South Africa are prevalent in Namibia. This being said the close ties between the two countries undeniably has benefits for the Namibian market....

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Mining

Namibia Mining

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BMI View:   While Namibia holds substantial diamond and uranium reserves among other minerals, the government's potential to enforce policy to extract greater revenue from the sector remains a key downside risk to investment. Overall, we forecast Namibia's mining industry value to grow on average 4.7% y-o-y from an estimated USD1.5bn in 2014 to USD1.9 bn in 2018. This will represent a decline in the mining sector's contribut ion to GDP from 13% in 2014 to 10 % in 2018.   On the positive side, we anticipate greater Chinese investment in mine development in the country.

Uranium To Drive Growth
Namibia - % Growth In Output
...

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Pharmaceuticals & Healthcare

Namibia Pharmaceuticals & Healthcare

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BMI View:   There are signs the Namibian government is taking the ongoing problem related to drug shortages and supply issues seriously, with the Tender Board of Namibia approving a NAD400mn spending allowance for the Ministry of Health and Social Services, to allow it to buy the drugs it needs. However, we believe that healthcare access for many of the country's citizens is likely to remain problematic as long as the country's dependence on imports remains so high.

Headline Expenditure Forecasts

  • Pharmaceuticals: NAD2.47bn (USD256mn) in 2013 to NAD2.82bn (USD263mn) in 2014; +13.8% in local currency and +2.6% in US dollar terms.

  • Healthcare: NAD9.87bn (USD1.02bn) in 2013 to NAD11.05bn (USD1.032bn) in 2014; +11.9% in local currency...

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Power

Namibia Power

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BMI View:   Namibia is at a critical juncture in the development of its electricity sector. The country is currently facing a severe crisis in the provision of power due to an extreme reliance on a dilapidated hydropower system, which is vulnerable to breakdown and drought, and on imported electricity from South Africa. Various projects are in the pipeline which will radically transform the country ' s ability to generate electricity during the course of this decade, above all the Kudu gas-fired power station and the newly-announced Arandis Power Station, as well as further smaller investments in hydropower and solar energy. Together, these will end Namibia ' s dependence on imports and eventually allow the country to become an exporter of energy. 

At the same time, Nampower is...

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Telecommunications

Namibia Telecommunications

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BMI View :  BMI's Q 4 14 Southern Africa report analyses the latest industry, regulatory and macroeconomic developments in the telecoms markets in Angola, Botswana, Mozambique, Mauritius and Namibia. It also contains analysis of the latest market data relating to the end of June 2014   a nd an update of   our five-year forecasts to 2018 for the mobile, fixed-...

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Tourism

Namibia Tourism

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BMI View: The Namibia tourism report examines a range of key market indicators for this increasingly popular holiday destination in Southern Africa, including inbound and outbound travel, the hotel and accommodation sector, tourism related expenditure and industry value. Throughout our forecast period to 2018, we expect to see healthy growth across all indicators. This overall growth will be supported by several key infrastructure investment projects. As Namibia comes to the attention of global players, we expect to see the hotel sector expand over the coming years.

Namibia has experienced several years of substantial growth in terms of inbound tourism arrivals, with 2013 seeing particularly impressive growth of just under 12%. Growth in 2014 is also expected to be impressive, at 10.5%, leading to a total expected annual...

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