16 Nov 2023
NAMIBIA is not likely to come out of the junk status any time soon, a South African economist and forecaster, Helmo Preuss, said on Friday.
Preuss was speaking during a business breakfast meeting in Windhoek on ‘South African Economic Prospects’ and said he is only expecting South Africa’s investment grade to be upgraded (if it will) in the year 2020.
“The Namibian economy is closely linked to the South African economy. It is the most important export destination and source of imports. The performance of the South African economy also has a strong impact on the Southern African Customs Union common revenue pool.
“Namibia receives about 35% of total government income from Sacu transfers. Hence the performance of the South African economy impacts on the Namibian economy and the presentation by Helmo Preuss will provide a detailed insight into the trends of some of the relevant indicators,” said the Economic Association of Namibia, who organised the meeting.
Last month, Moody’s Investors Service downgraded Namibia’s long-term senior unsecured bond and issuer rating to junk status, while maintaining its negative outlook for the country’s economy. Soon after Moody’s statement was released, finance minister Calle Schlettwein issued an official response stating: “The economic situation in Namibia does not warrant such downgrading.” But the South African economist does not see Namibia getting an upgrade soon.
“I do not expect a (rating) revision for Namibia before 2020,” said Preuss. Asked whether South Africa’s economy is not affected by what is happening in regional economies such as Namibia, as much as their own economy affects regional economies, Preuss said: “The issue lies within the South African media. In the South African media, there is no coverage of Namibia’s consumer price index (CPI) for example.
It is a lack of media coverage in South Africa of regional economies,” he said. On South Africa’s way forward, the economist said the ANC’s December 2017 elective conference will see more policy certainty. He added that the Wild Coast highway and Durban’s “Big Dig” port expansion are major infrastructure projects. “South Africa will largely be isolated from turmoil elsewhere (geography and exchange controls).”