Drought hit-Namibia to affect agriculture, other sectors: Research firm

Namibian financial services firm, PSG Wealth Management, has revealed on May 22 that amid the significant slump in agricultural output, the water-intensive industries, such as beverages and processed foods in Namibia are going to be affected by the ongoing drought.

In an analysis of the drought situation, PSG Wealth Management said reduced local production of agricultural and manufactured goods will have to be covered by higher imports, which will put upward pressure on consumer prices.

"Furthermore, the worsening drought is straining an already tight government budget due to efforts to curb bulging public debt," PSG Wealth Management added.

The Namibian government currently set aside 573 million Namibian dollars (around USD 40 million) for drought relief aid, which is already more than the 211 million Namibia dollars (about 14 million) that the ministry of finance had budgeted for national emergencies and disasters for the current fiscal year, as reported by Xinhua.

"The severity of the drought is turning out to be worse than we expected and this is likely to adversely affect our GDP forecast," the firm said.

PSG Wealth Management firm said in its previous forecast round Namibian real GDP growth was projected to rebound modestly to 1.1 percent in 2019 from negative growth rates of 0.1 percent and 0.9 percent in 2018 and 2017.

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