Visual. Rainfall probability forecast, October 2020 to March 2021.
Source. Ministry of Works and Transport / Agribank Research Department.
The official advisory from the National Oceanic and Atmospheric Agency (NOAA) of the US Government, released last week Thursday, has changed to “La Nina conditions are present.” Although it still does not designate an official La Nina event, the chance of La Nina conditions continuing for the austral summer, has now improved to 75%.
This week’s visual shows the official probability forecast for the upcoming local season. This type of forecasting is very conservative, reflecting the meteorologists’ awareness that weather forecasting is a precarious undertaking. Still, both three-months seasons show a preponderance of light blue shading which indicates normal to above normal rainfall expectations.
For the past two weeks, local weather followed a regular early-summer pattern with a weak mid-level trough over the Kavango amplified by low pressure conditions over Botswana and central South Africa. This week also saw the first appearance of the season of the so-called heat-low which typically forms over the wider Kalahari basin with Bwabwata as the centre. Coupled with an easterly to north-easterly airflow, it caused very hot conditions in the Kavango and the regions north of Etosha.
This was offset over the southern and central areas by the outer rim of the South Atlantic high pressure cell which ridged into Namibian territory following more or less the route of the Fish River. It lead to cooler early mornings in the first half of the week but nothing that can be described as cold.
By the end of the week, the mid-level trough has shifted to the Botswana Zimbabwe border and Namibia enjoyed mostly cloudless days with only a hint of moisture in the upper layers of the atmosphere.
The weather is in that inter-seasonal see-saw pattern where the power of the South Atlantic high is displayed for brief periods, most noticeable at night, and then replaced by the combined effect of solar heating during the day and a steady airflow from the north.
On the Radar
The relatively settled conditions continue during the weekend with little expectation of much moisture intrusion from the north.
The South Atlantic high approaches the continent and by Sunday evening, nighttime conditions in the two southern regions should be somewhat cooler. This will result in wind from the south-west indicating cooler, dry conditions over about two thirds of the country.
It is only be next week Tuesday, when the South Atlantic high has shifted eastward to morph into the intermittent continental high, that a strong anti-cyclonic circulation resumes. This will bring in moisture from Angola with the result that clouds will start developing over a large part of central Namibia, following the convergence zone that will develop from north-west to south-east.
As of Wednesday, there is a slight chance for light precipitation over the interior with the probability of somewhat heavier showers along the Botswana border adjacent to the Kgalagadi Transfrontier Park.
How to revive an economy that has been relegated to a dustbowl is probably the most important question on many Namibians’ minds. Given that we have lost a whole semester, it is not wishful thinking that there will be a lot of catch-up to do in the remainder of the financial year. For this reason, one must expect a myriad of suggestions, some from forward thinkers and some from not-so-forward thinkers, on how everybody else should go about bringing life back to the economy.
The statement in the heading is not new but it encapsulates what a former finance minister was fond of calling an “open economy.” And this is exactly where our biggest challenge lies in the fast reconstruction of a post-lockdown economy.
There is not much that we could do about the lockdown. When the whole world around you shuts down, there is little reason to keep your own borders open. Nobody is going to come in any case. Monetise this with a small incentive from the international powers and there is all the more reason to tow the line and shut down the entire country.
There are about five and a half months left before we get to the end of the financial year. For the government, there is six and a half months left, putting them in a slightly better position to still mine something positive from a year that will go down in history as a calamity.
When we start asking meaningful questions about economic revival, the statement in the heading comes into play again. For a very large part of our economy, what we produce is for export, meaning that we are dependent on foreign market to ensure local prosperity. This immediately puts the squeeze on Namibian producers because it shows that local production is 100% dependent on exogenous factors over which we have no control.
Similarly, many people are bargaining on a quick reversal of the fortunes of tourism. This may or may not happen but don’t forget, from an economic perspective, tourism is an export product. The only difference is that you bring the foreign consumer to your own territory to pay for what you have to offer. Thus, just like the rest of the productive economy, tourism is dependent on what happens in other markets, not what happens here.
There is however, one sector where I believe we should put of focus and concentrate our efforts. That is agriculture.
It is the one sector where we produce mostly for ourselves. Depending on which definition one applies, it is also the sector with the biggest impact on local conditions. It is often disregarded because of its relatively small contribution to Gross Domestic Product but it is not an exaggeration to state that it is the most important economic sector for Namibia.
The list of ancillary benefits derived from agriculture is endless. It has been well-researched by a plethora of development agencies, so no need to repeat that wisdom here. The fact is, all through the lockdown, it was the one industry that has not come to a standstill. It took a breather in some respects but the animals in the field and the crops in the ground continued to multiply and grow regardless of external circumstances.
But agriculture is not restricted to husbanding something or planting seeds in the ground. Those are only the primary aspects of the industry. There is entire value chains that depend on this production, and those chains are very weak in Namibia hence the reason why the minister always reminded us that we eat what did not grow, and what we dig from the ground, we send someplace else.
Agriculture further offers many opportunities for involvement at community level. Here I am not thinking about growing mahangu only for the household and only for one season, I am rather envisaging the type of commercial developments we see in the north were community labour is augmented by the immense power of capital.
Then there is the potential of agriculture to be the springboard for our plans to build a prosperous future based on an industrial economy which serves both the local and the export market. The stuff that we produce in agriculture are far more suitable for local value adding than the very expensive minerals we mine. What’s more, agricultural industrialisation does not need to be concentrated in large centra with massive capex investments. The nature of the products demand that value adding is decentralised and that it is built on community participation.
Upscaling our investment in agriculture is in my mind just as big a priority as the investments we need in infrastructure. That the money is available, I have no doubt. That the returns can be generated, I also do not doubt. All we now need is a realignment of economic and development priorities to focus on an industry which we can control, which we can consume ourselves (at least to a substantial degree) and which will relieve us of the burden implied in the heading.
Listed financial services company, Capricorn Group’s operating profits were significantly impacted by the COVID-19 pandemic during the last quarter of the financial year, with full-year profit after tax contracting by 15.6% to N$856.4 million.
Capricorn has diversified operations and business interests in Namibia, Botswana and Zambia. The company’s annual financial results for the period ending 30 June 2020 shows that profit after tax from continuing operations, excluding its Zambian banking operation, amounts to N$1,01 billion, which is 2.2% lower than the prior year.
Loans and advances of the company increased by 5.6% to N$41.1 billion during the period under review. Bank Windhoek’s gross advances increased by 4.9% to N$33.4 billion, well above the growth in private sector credit extension of 2.8%. This growth was mainly in commercial loans. Bank Gaborone increased gross advances by 11.5% to P4.7 billion as the bank continued to grow its market share, mainly in commercial and mortgage loans.
The Group’s impairment charges increased by 146.1% to N$304.3 million for the year under review. Almost half of the increased charges is a direct result of stressed and prudent economic overlays, reflective of a severely depressed economic outlook, applied to the expected credit loss models. The balance of the increase is mainly due to the prudent approach applied by the group in determining expected credit losses given the current economic circumstances where many customers are experiencing financial distress.
CEO Thinus Prinsloo said the they are proud of the performance delivered by their business units and associates, adding that their response to a challenging year showed resilience and sustainability in operations.
“By ensuring the well-being of the business, our employees and clients as a priority during the pandemic, Capricorn Group endured and performed well under extremely challenging conditions. Bank Windhoek, our flagship brand, delivered strong results,” Prinsloo said.
Prinsloo admits profitability was under pressure in the last three months of the financial year, explaining that the significant reduction in Namibia’s repo rate by 225 basis points impacted Bank Windhoek’s profits directly, declining by 9.8% compared to last year.
Explaining the exclusion of Cavmont Bank from its continuing operations, Jaco Esterhuyse, Financial Director of the Group said after three years of losses reported by the Bank in deteriorating market conditions in Zambia, Capricorn Group accepted the offer by Access Bank Zambia to acquire Cavmont Bank.
“Agreements for the sale and subsequent merger of the two banks has been concluded subject to the requisite regulatory approvals,” Esterhuyse said.
On the outlook going ahead, Esterhuyse said they expect an increase in customer defaults with impairment charges remaining high. He explains that net interest revenue, especially in the case of Bank Windhoek will be significantly lower in the next year following the aggressive cuts in interest rates and that Bank Gaborone is expected to be less impacted and the expected appreciation of the Pula against the Namibia Dollar will also contribute positively to earnings.
“Non-banking subsidiaries are not expected to be negatively impacted and should cushion the overall negative impact on the group’s results,” Esterhuyse said.
A sanitation project aimed at improving sanitation and containing the spread of Hepatitis E in informal settlements received funding of N$7.9 million from the European Union recently.
The project, spearheaded by Development Workshop Namibia, will be implemented in 10 towns over the coming three years to reach out to some 210,000 informal settlement residents.
It will work through a wide network of volunteers with the aim to change hygiene behaviours of residents and stimulate the construction of improved sanitation facilities in collaboration with local authorities. GIS mapping will complement the project to assist local authorities to promote and pursue strategies for affordable sanitation for all.
“The European Union is delighted to be part of this multi-stakeholder programme to support improved sanitation to communities in a manner, which we believe is workable and sustainable”, said Ambassador Sinikka Antila.
The project follows a successful piloting phase in the city of Windhoek during 2019-2020. The project has already initiated the printing of information materials and constructed the first four- out of 50 sanitation centres that exhibit demonstration toilets that can easily be built by local residents themselves.
The first towns where the project is being implemented are Karibib and Swakopmund where local authorities have welcomed the initiative.
Open defecation causes major health and environmental problems within informal settlements where residents do not have access to proper sanitation facilities and are therefore forced to defecate in dry riverbeds or bushy areas near their homes.
Hepatitis E and COVID-19 are among the many diseases that can be spread through contact with faeces. According to the last Census data, an estimated 50% of informal settlement residents do not have access to sanitation.
Caption: A toilet in Windhoek’s ‘Otjomuise’ informal area.