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Brexit impact assessedWith debt, drought and a weak economic cycle considered, Namibia last week placed the effects of Britain’s divorce from the EU under the microscope. Schlettwein asserts economy will rebound Image may be NSFW.
Clik here to view. Finance Minister Calle Schlettwein will deliver his mid-term review of the country’s fiscal position, and government’s intended interventions, during the last week of October.
Speaking to members of the National Assembly last week on the plight of the world’s beleaguered economies, Schlettwein said the government was working with the financial sector to fast-track an effective action plan.
Addressing the much-publicised downward revision of Namibia’s projected GDP for 2016 to 4.3%, and a recent critical assessment of its ability to honour its debts, Schlettwein on Thursday also focused attention on one of the country’s key trading partners, Britain, deciding to leave the European Union (EU).
“As we are all aware, on 23 June 2016, the United Kingdom voted to exit from the EU. The impact of the envisaged exit, which is anticipated to materialise in two years’ time, has wider ramifications for the UK, the EU and the global economy,” Schlettwein told his fellow MPs.
‘Brexit’, he said, would affect Namibia in four main ways, ranging from trade to exchange rate volatility, equity price drops and investor sentiment.
In terms of trade, he said, about two thirds of Namibia’s exports (mainly beef and fish), valued at about N$800 million, are allocated to the UK market.
“External demand weaknesses, as well as indirect impact through UK trade with South Africa, are expected to weigh on Namibia in the medium term,” the minister said.
As for the exchange rate, he noted that the South African rand appreciated against the British pound by 2.7% directly following the 24 June Brexit decision.
“Appreciation against the pound continued to reach 12%. At the same time, the rand depreciated against the US dollar by 5.4% and 2.4% against the euro, with implications on the competitiveness of exports to the UK, external debt and investment in general.”
Speaking on Brexit’s effect on equity prices, Schlettwein said many large Namibian companies are dual-listed on the Namibia Stock Exchange (NSX), the Johannesburg Stock Exchange (JSE) or the London Stock Exchange (LSE).
“The share prices of most Namibian companies with dual listings, as well as banks, will in the foreseeable future continue to be exposed to the relative exchange rate and market volatility.” Finally, he said the Brexit vote has influenced investor sentiments in especially the bond market, where investors have begun to shift their resources to safer and higher-yielding investment-grade assets. “Namibia’s two USD bonds for example have seen increased demand over the first two weeks of the Brexit announcement,” Schlettwein said.
Clik here to view.
Brexit impact assessedWith debt, drought and a weak economic cycle considered, Namibia last week placed the effects of Britain’s divorce from the EU under the microscope. Schlettwein asserts economy will rebound Image may be NSFW.Clik here to view.
Finance Minister Calle Schlettwein will deliver his mid-term review of the country’s fiscal position, and government’s intended interventions, during the last week of October.Speaking to members of the National Assembly last week on the plight of the world’s beleaguered economies, Schlettwein said the government was working with the financial sector to fast-track an effective action plan.
Addressing the much-publicised downward revision of Namibia’s projected GDP for 2016 to 4.3%, and a recent critical assessment of its ability to honour its debts, Schlettwein on Thursday also focused attention on one of the country’s key trading partners, Britain, deciding to leave the European Union (EU).
“As we are all aware, on 23 June 2016, the United Kingdom voted to exit from the EU. The impact of the envisaged exit, which is anticipated to materialise in two years’ time, has wider ramifications for the UK, the EU and the global economy,” Schlettwein told his fellow MPs.
‘Brexit’, he said, would affect Namibia in four main ways, ranging from trade to exchange rate volatility, equity price drops and investor sentiment.
In terms of trade, he said, about two thirds of Namibia’s exports (mainly beef and fish), valued at about N$800 million, are allocated to the UK market.
“External demand weaknesses, as well as indirect impact through UK trade with South Africa, are expected to weigh on Namibia in the medium term,” the minister said.
As for the exchange rate, he noted that the South African rand appreciated against the British pound by 2.7% directly following the 24 June Brexit decision.
“Appreciation against the pound continued to reach 12%. At the same time, the rand depreciated against the US dollar by 5.4% and 2.4% against the euro, with implications on the competitiveness of exports to the UK, external debt and investment in general.”
Speaking on Brexit’s effect on equity prices, Schlettwein said many large Namibian companies are dual-listed on the Namibia Stock Exchange (NSX), the Johannesburg Stock Exchange (JSE) or the London Stock Exchange (LSE).
“The share prices of most Namibian companies with dual listings, as well as banks, will in the foreseeable future continue to be exposed to the relative exchange rate and market volatility.” Finally, he said the Brexit vote has influenced investor sentiments in especially the bond market, where investors have begun to shift their resources to safer and higher-yielding investment-grade assets. “Namibia’s two USD bonds for example have seen increased demand over the first two weeks of the Brexit announcement,” Schlettwein said.
