Namibia’s manufacturing sector performance declined by 19.6 percent in 2020, as it bore the brunt of the impact of COVID-19 and associated lockdown measures as several manufacturers were forced to stop or minimize operations, an analyst said Tuesday.
This was further compounded by a decline in the demand for manufacturing products as incomes in the economy became constrained, said FirstRand Namibia economist Ruusa Nandago.
“As a result, output in this sector declined by 19.6 percent y/y compared to a growth of 4.3 percent y/y during 2019. This contraction makes manufacturing the third-worst performing sector during 2020 after hotels and restaurants which contracted by 33.1 percent y/y and transport and storage which contracted by 22.4 percent y/y over the same period. Given that this sector contributes 11 percent to GDP, this had a material impact on overall economic performance,” she said.
According to Nandago driving the significant decline in the manufacturing sector spillovers from the decline in the mining sector.
“Declines in diamond production because of lockdowns and a slowdown in commodity prices had an impact on the diamond processing subsector of manufacturing which fell by 14.1 percent y/y. Similarly, metals processing declined by 46.8 percent y/y,” she said, adding that the lingering effects of the 2019 drought also compounded this decline as meat processing declined by 40.8 percent y/y.
Furthermore, Nandago said alcohol bans and reduced alcohol sales both in Namibia and South Africa resulted in reduced beverage production which declined by 36.5 percent y/y.
Looking ahead, she said output in this sector is expected to recover from the levels seen during 2020 in the absence of severe lockdown measures.
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