Minerals boost Namibia’s export earning

Namibia rough diamond export earnings increased to by 1.7 billion in the second quarter compared to the first quarter to 3.5 billion, according to the September Quarterly Bulletin of the Bank of Namibia.

The substantial increase was on account of currency depreciation against the US dollar and higher realised prices and additional marine diamond mining vessels that were brought on stream. The diamond price was boosted by stronger demand in consumer markets such as the United States and China. ‘’The relatively stronger demand for diamond jewellery in the US observed during the period under review contributed to the higher realised prices during the period under review.’’

Base metal prices also saw an increase in the second quarter ‘’attributable mainly to a recovery in volumes exported’’ rising by 1.1 billion dollars to 2.1 billion in the second quarter.

The price of uranium on the spot market rose by 62 percent and 0.3 percent on an annual and quarter-to-quarter basis respectively. ‘’This was primarily driven by increased global demand for the use of nuclear energy as an alternative to carbon emitting energy sources, as well as concerns about disruptions in the uranium supply chain given the on-going war in Ukraine’’ the quarterly report says.

Export income from other minerals rose to 2.1 billion dollars reflecting an annual increase of 34.5 percent. This growth was mainly driven by a rise in gold export receipts.

‘’On a quarterly basis, however, other mineral exports decreased by 21.9 percent from N$2.6 billion recorded in the previous quarter, mainly attributable to 19.7 percent lower export earnings from gold due to slower than planned ramp-up in the production of the Wolfshag underground mine.’’

The manufacturing sector also recorded a positive growth of 19.4 percent owing to higher proceeds from polished diamonds, processed fish as well as meat products.

The bulk of Namibia exports mainly went to the Eurozone, South Africa, Botswana and China. Other top exporting destinations during the period under review were Zambia (mainly fish products), United Arab Emirates (rough and polished diamonds), DRC, US, Mozambique and Poland.

‘’Namibia’s merchandise exports to the Eurozone took up the largest share of 28.1 percent, reflecting the rise in the export value of uranium and processed fish. South Africa took the second largest share of 22.7 percent, mainly supported by higher exports of gold and live animals. Meanwhile, the higher rough diamond exports during the review period contributed to the rise in Botswana’s share which rose to 19.8 percent of exports compared to 12.5 percent during the corresponding quarter of 2021. China’s share declined to seven percent reflecting lower uranium exports.’’ Foreign Direct Investment also recorded high inflows to 3.1 billion dollars in the second quarter compared to an inflow of 1.8 billion registered a year ago and two billion in the previous quarter. ‘’ ‘’The higher FDI inflow was due to reinvestment of earnings by corporates in the mining and financial sectors on the back of increased profits during the review period. Moreover, the rise in FDI was supported by an increase in equity capital due
to exploration activities following the offshore oil discoveries as well as uptake of intercompany loans extended to domestic subsidiaries in the mining sector.’’

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