Rising consumer debts and falling disposable incomes, coupled with high interest rates and inflation, are likely to put pressure on private consumption during 2008, says Martin Mwinga, the chief executive officer of Rand Merchant Bank Asset Management. The sectors of agriculture, fishing and manufacturing are also expected to perform below expectations during the year.

Martin Mwinga

“Coupled with downward growth in global economic growth, the 2008 GDP growth is revised downward to 3.6%,” says Mwinga. The Bank of Namibia has anticipated a growth rate of 4.7% for the year.
Equally concerning is income inequality. The share of national income for most of the northern regions dropped from a double digit to a single digit in a period of between 1994 and 2004.
According to Mwinga, 5% of the Namibian population controls 44% of the country's national income.
Mwinga also cautions on the effects of raising the income tax threshold to N$40000. This, he says, is likely to affect higher inflation on lower income earners.
Southern African Customs Union (SACU) receipts are expected to increase by at least N$3 billion to N$9 billion from initial estimates of N$5.8 billion. Reserves have increased over the past year due to high SACU receipts, now covering 14 weeks of imports from six weeks.
Mwinga says the expectation is that there will be a budget surplus of more than one percent due to the SACU windfall and expenditure containment. He says the Bank of Namibia is likely to follow South Africa in scrapping exchange control and introducing prudential requirements.
Government expenditure is likely to increase, mainly due to possible salary adjustments, and the capital/energy sector and infrastructure stands to benefit more.