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Savings not being utilised locally, says central bank |
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Written by Staff Reporters
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The saving ratio of the Namibian economy is higher than
investments, a situation, which the Bank of Namibia says contrasts many other
emerging markets.
The bank said in its Quarterly
Bulletin for the first quarter of this year which was released in Windhoek last
week that over the period 2000 to 2005 gross national savings averaged to N$9.1
billion and investments averaged N$7.9 billion over the same period.
Based on preliminary data, it is estimated that the positive
savings gap has further widened to about 18 percent of GDP in 2006, due to
robust export performance and substantial SACU receipts, the bank said.The central bank says the lack of active domestic savings
towards investment demand, coupled with the ineffective means to channel
savings towards investment projects is largely responsible for this trend. This
leads to most of the country's savings being channelled out of the country
instead of being invested locally, the bank said.“Namibia has a well developed contractual savings sector,
comprised, amongst others, of pension funds and life insurance companies. The
capital outflows through these institutions, mostly in the form of portfolio
investments, constitute a major portion of outflows experienced over the years
by the Namibian economy. The capital outflow situation was exacerbated in
recent years because of the very low net borrowing requirements of the central
government in the face of a much improved fiscal situation,” the bank said.
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