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Namibia Country Risk Report Q2 2015

Namibia Country Risk Report Q2 2015

Core Views

The Namibian economy will post solid growth of 4.7% annually overthe next five years. Growth will be driven in the main by capitalintensiveinvestment projects in the mining and infrastructure space,while key exports such as diamonds and uranium will benefit fromgradually improving demand conditions in key markets.

The landslide victory for president-elect Hage Geingob and the rulingSouth West Africa People's Organization (SWAPO) in Namibia'sgeneral elections on November 28 augurs well for broad politicalstability and a pro-business economic agenda. The result meansthat SWAPO will expand on its two thirds majority in the nationalassembly. Hopes for a shift towards a more inclusive electorallandscape continue to prove elusive.

Namibia's current account deficit will narrow to around 4.8% of GDPin 2015 from an estimated 6.8% in 2014.


Executive Summary
Core Views
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Broad Political Stability Ahead
Namibia will experience a period of broad political stability and policy continuity in the next few years, following the re-election of the
long ruling SWAPO party in late 2014. The landslide victory for President-Elect Hage Geingob and his party is indicative of widespread
public support, which lowers the threat posed by unrest from ongoing social issues.
Table: Political Overview
Long-Term Political Outlook
Stability Likely To Prevail Over The Coming Decade
While Namibia's enormous income inequality poses some risks to political stability, we believe the population is likely to continue
supporting the SWAPO government for the next 10 years, ensuring broad political stability and continuity.
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Activity
Private Consumption Will Drive Growth
Economic growth in Namibia will quicken to 5.0% in 2015. This expansion will be driven by private consumption and foreign investment.
However, the uncertain demand picture for key mining exports prevents a more robust growth projection over our forecast period.
table: GDP By Expenditure
Fiscal Policy
First Steps Toward Fiscal Consolidation
Namibia's fiscal deficit will narrow modestly in FY2015/16, based on our expectation of broad policy continuity following the re-election
of the long-ruling SWAPO party in October 2014.
table: Fiscal Policy
Monetary Policy
Key Policy Rate Hikes in 2015
The Bank of Namibia will increase the key policy rate by 50 basis points over the remainder of 2015, from 6.25% in February to 6.75%,
in a bid to contain the rapid growth in household credit.
table: Monetary Policy
Balance Of Payments
Uranium Supports Trade Deficit
Import demand from the mining and consumer sectors will keep Namibia's trade balance, and consequently current account, firmly in
the red. We expect this shortfall will be covered by financial account inflows.
table: Current Account
Chapter 3: 10-Year Forecast
The Namibian Economy To 2024
Resource-Powered Growth
Thanks to the country's strong primary sector, we expect growth to prove relatively robust in the long run, averaging around 4.4%
annually over 2015 to 2024. With a stable political environment, the main risks are the limited size of the domestic market, rising income
inequality and depressed global demand for the country's primary export: diamonds.
table: Long-Term Macroeconomic Forecasts
Chapter 4: Operational Risk
SWOT Analysis
Operational Risk Index
Operational Risk
TABLE: Operational Risk
Availability Of Labour
table : Sub -Saharan Africa – Availability Of Labour Ris k
table: Employment By Sector ('000)
table: Top Source Countries for Migrants ('000)
Crime Risk
table : Sub -Saharan Africa – Cri me Ris k
table: Crime Statistics
Chapter 5: Key Sectors
Automotives
table : Autos Total Mar ket – Historical Data And Forecasts
Other Key Sectors
table : Phar ma Sector Key Indicators
table: Telecoms Sector Key Indicators
table: Infrastructure Sector Key Indicators
Chapter 6: BMI Global Macro Outlook
Global Outlook
Deflationary Pressure
Table: Global Assumptions
Table : Developed States , Real GDP Growt H, %
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
Table : Emerging Mar kets , Real GDP Growth , %

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