Last week RMB Namibia hosted its Global Markets Seminar under the theme Namibian Commodities in the Face of Global Change.
Isaah Mhlanga from RMB SA Economist and Namene Kalili, Senior Economist at FNB Holdings prvided the audience with an economic overview themed, Navigating through the Noise, Economic Overview. Ettienne van Wyk, Head of Commodities Trading provided a presentation on Structural Changes in Commodities.
The event also had a panel discussion themed; ‘Growth prospects for Namibia as a commodity based economy’ with Daniel Motinga as the moderator. Topics that were discussed were the global economic impact on local commodities (and growth potential), beneficiation of commodities and which commodities have real opportunities for this, balancing local ownership and large multi-nationals that bring investment. Also talked about were the opportunities for growth through commodities in Namibia in terms of where the gaps are currently and what people are not aware of. Financial institutions assisting with the mitigation of risks and enabling the opportunities for the commodities sector in Namibia was also a key talking point. The panellists included Markus Lubbe: Acting CEO of NamDeb Diamond Corporation (Pty) Ltd, Lauren Davidson: Economist at the Chamber of Mines of Namibia, Steve Galloway: Retired Geologist and investment banker, Ettienne van Wyk: Head of Commodities Trading at RMB SA and Isaah Mhlanga, RMB SA Economist.
Neville Ntema, Corporate Forex Dealer at RMB Global Markets: “In the greater scheme of things, commodities, raw or partially processed often are the most significant exports and revenue earners of developing countries and the revenue generated from these exports have a pivotal effect in those economies. Taking Namibia’s NDP series into consideration, we believe that all parties who are part of the application and implementation of the NDP’s need to come together to workshop around the potential solutions, which will lead to profitability and sustainability of both the economy and our respective businesses. Of course, with the world fast becoming a global village, Africa, let alone Namibia can no longer ignore the evolution of global commodity prices, demand and supply factors.”
“Global growth continues to hold up in both the US and Europe while China is stable. Monetary policy remains accommodative although the US continues to gradually tighten policy. Commodity prices have marginally recovered and have supported commodity exporting emerging market countries’ growth prospects and external accounts. Within this supportive global environment, bond inflows have continued into emerging markets and South Africa has also benefited. However, on the growth front South Africa has entered into a technical recession during 1Q17 with all sectors contracting except for agriculture and mining. The prospects for the next two years will be intricately linked to the resolution of political and policy uncertainty which should lift business and consumer confidence. Meanwhile, we forecast inflation to fall to 5.7% and 5.3% in 2017 and 2018, respectively, however, we do not expect interest rate cuts this year due to concerns of credit rating downgrades and the possible resultant currency weakness,” says Isaah Mhlanga, RMB SA Global Markets Economist.
“The way forward for the commodity producers is: Innovation for commodity producers, to reduce costs and enhance returns. Beneficiation will raise the country’s competitiveness profile. In line with the NDP series, mining is a stepping stone to kick-start other business streams for the economy, as a form of downstream business when the miners start to add value to the resources they are mining. Thus far Namibia has dropped in ranking, from an investment destination point of view. However, acknowledging that mining is an anchor industry for FDI, beneficiation will potentially move the country up in the ranking of foreign direct investment destination,” Neville Ntema, RMB Global Markets concludes.