The construction sector in Namibia is experiencing its seventh straight year of contraction, belying the country’s recovery that saw it grow 0.9% in 2021. Going by statistics contained in the Bank of Namibia’s February economic outlook, the construction industry is set to shrink by 2% during 2022 before expanding to 2.5% in 2023. This continues the streak of contraction which now enters its 7th straight year, with a severe 19.2% dip in 2021. This is in slight contrast to Namibia’s entire economy which is actually on the way to recovery in 2022 and 2023, boosted by a growth in the mining and other tertiary industries.
“The estimated contraction in construction for 2021 was increased to 19.2% from an earlier estimate of 11.5% contraction. The adjustment to construction growth was informed by much lower construction activity from both government and private sector,” the BoN reads in part. It also states that the recovery still faces a risk of being derailed by variants of the coronavirus and the country still needs to ensure that the fight against COVID19 continues.
“Risks to domestic growth are dominated by possible new waves of the pandemic, vaccine hesitancy, supply chain disruptions and the slow pace of vaccinations in Namibia. The first sub-variant of Omicron (BA.1) has led to tighter travel restrictions at the end of 2021, especially affecting southern African countries. The second sub-variant of Omicron (BA.2) spreads faster than the first variant and is prevalent in countries such as the UK and Denmark,” reads the update.
Namibia’s central bank notes also that domestic economic growth is estimated at 0.9% for 2021 and is expected to improve to 3.4% in 2022 and to 3.7% in 2023. The 2021 growth estimate was revised down from 1.5% published in the December 2021 economic outlook update, largely reflecting lower performance for sectors like non-metallic mineral products, construction, wholesale and retail trade as well as financial services.
Earlier, the Bank of Namibia said that the 2021 growth estimate was revised down from 1.5% published in the December 2021 Economic Outlook update, largely reflecting lower performance for sectors like non-metallic minerals products, construction, wholesale and retail trade, and financial services.