Loadshedding causing trade disruptions

Imports from South Africa declining
Namibia's live exports decreased by 16.9% year-on-year in February 2023 due to lower demand for weaners from South Africa.
Phillepus Uusiku
Loadshedding in South Africa is causing trade disruptions both from the demand and supply side. The value of Namibia’s imports from South Africa is on a downward trend, according to data provided by the Namibia Statistics Agency (NSA).

The value of imports from declined to N$3.6 billion in January 2023, from N$4 billion recorded in December 2022.

On the other hand, the value of exports from Namibia to South Africa increased to N$2 billion in January 2023, from N$1.4 billion recorded in December 2022. February’s trade statistics will be released today.

Fin24 recently reported that South Africa posted a current-account deficit for the first time in three years in 2022 as imports increased and power shortages and rail constraints curbed exports, heightening the nation’s vulnerability to external shocks.

The balance on the current account, the broadest measure of trade in goods and services, swung to a deficit of 0.5% of gross domestic product, or R31.8 billion, from a surplus of 3.7% in 2021. It’s the first annual shortfall since 2019 and comes after coronavirus restrictions and global supply-chain disruptions suppressed imports.

Looking at the demand for live animals, Namibia’s exports decreased by 16.9% year-on-year in February 2023 due to lower demand for weaners from South Africa, according to Simonis Storm.

Prices for live animals at auctions have been decreasing due to a decrease in demand as a result of loadshedding. South African farmers struggle to slaughter live animals and retailers struggle to store finished meat products in freezers or fridges due to electricity supply disruptions. Should electricity supply issues be resolved, farmers will have excess stock to sell and so prices could drop even further, Simonis Storm said.

“Engagements with various stakeholders indicate that sales for basic food items have been declining in recent months and “no buying power amongst consumers” is frequently cited as the main reason for this. We therefore see both a decrease in demand for meat products both from certain abattoirs and consumers, leading to lower prices. However, regulated pig prices are on an upward trend in order to assist local producers with market access given the 44.9% year-on-year decrease in pork imports in February 2023.”


Looking at food prices, Simonis Storm further pointed out that loadshedding in South Africa is costing Tiger Brands about R1.5 million per day. Famous Brands which operates 2 850 restaurants and includes brands such as Steers, Debonairs, Fishaways, Wimpy and Mugg & Bean amongst other guided that fuel and food price increases will lead to further menu price increases for the remainder of 2023.

High diesel and logistics costs will increase consumer prices in Namibia even further as products are transported mainly by trucks from South Africa to Namibia.

It is therefore worrisome to see certain entities recording double digit inflation, especially Oceana and Tiger Brands which manufacture basic food items for Namibian households, Simonis Storm pointed out. Namibia sourced most of its imports from South Africa in January.

According to the Namibia Statistic Agency (NSA), overall food inflation locally stood at 14.5% in February 2023, compared to 5.5% and 14.3% recorded in February 2022 and January 2023, respectively.

Selected food items that recorded high inflation rates include fruits (26.8%), bread and cereals (22%), oil and fats (17.9%), sugar, jam, honey, syrups, chocolate and confectionery (12.5%), fish (10.1%) and meat (9.4%).

Overall, Namibia recorded an annual inflation rate of 7.2% in February 2023, compared to 4.5% registered in February 2022. In January 2023, inflation stood at 7%.

The two main contributors to the annual inflation rate for February 2023 were food and non-alcoholic beverages and transport.-phillep@nmh.com.na