The Namibian economy is projected to grow by 4.7% in 2008 from an estimated 3.8%, the Bank of Namibia said this week. The bank said in its forecast that the growth would be supported by strong metal prices and the expansion of mineral production such as uranium and diamonds. Risks to the outlook include volatility in fuel prices and exchange rates and high interest rates, the bank said.The bank added that signs of inflationary pressure are still looming and it is expected to continue in 2008.

“Consumption and investment levels are expected to have grown positively in 2007 and the current account balance is forecasted to further improve on account of high SACU receipts and improved export earnings. Tourism is also proving a strong contender in increasing its contribution to GDP,” the bank said.
T prevailing high mining commodity prices would contribute positively to the economic growth in the short to medium term, the bank further said.
The mining sector is projected to grow by 10.8% in 2008, from an estimated growth of 4% in 2007. The slow growth during 2007 is mainly attributed to various unforeseen bottlenecks experienced in the sector and older mines reinvesting into new operations, the bank said. The growth during 2008 will be mainly attributed to increased uranium production, the bank said.
Diamond output is projected to grow by 7.8% in 2008, from an estimated negative growth of 3% in 2007, mainly due to the increase in offshore mining activities.
Other mining, which comprises mainly of zinc, uranium, gold, lead and silver, is expected to grow by 21.8% in 2008, compared to the 3% growth of 2007.
“Despite the positive outlook on commodity prices, 2007 production levels were lacklustre and are expected to improve significantly in 2008. An increase in diamond production is estimated for 2008, reaching the 2.5 million carat mark, which is higher than the 2007 production levels,” the bank said.
The central bank said agricultural growth is estimated to decrease due to good rainfall prospect for 2008 as compared to 2007. Growth in the fishing sector is expected to be mixed due to better prices and relatively weaker Namibia Dollar, and lower TAC due poor fish stock. Growth in manufacturing in 2008 is assumed to be led by refined zinc and other food products and beverages sub sectors.
The bank said the construction sector is assumed to grow positively on the back of government projects as well as private sector activities especially in the mining construction activities and tourism-related infrastructures.
“The transport and communication sector will grow positively on the back of the positive performance of the mobile telecommunications category of the communication sub-sector due to increasing demand, the bank said.