Chairman & CEO's Review
Executive Chairman's And Chief Executive Officer's Review - 2013
The following is an excerpt from the O&L 2013 Annual Report - For the full review, please download the PDF.
The Global Economic Environment
Although the impact of the global financial crisis had been experienced in some economies as of 2007, in Africa, and in particular in Namibia, the negative impact of the recession was delayed, and has only been fully experienced in recent years. Around the world, stock markets have fallen, large financial institutions have collapsed or have been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems.
On the one hand, many people are concerned that those responsible for the financial problems are the ones being bailed out, while on the other hand, a global financial meltdown has most certainly affected the livelihoods of almost everyone in an increasingly interconnected world. For the developing world, the rise in food prices, as well as the knock-on effects from the uncertainty and instability in international financial, currency and commodity markets, coupled with doubts about the direction of monetary policy in some major developed countries, have had a compounding effect, and have contributed to a gloomy outlook for the world economy. High fuel costs, soaring commodity prices, and the instability of the oil price are, amongst other things, some of the global economic challenges that have unfortunately impacted negatively on trade worldwide.
As such, commodity dependent economies like Namibia have been exposed to considerable external shocks, stemming from price booms and busts in international commodity markets. Market liberalization and privatisation in the commodity sector have not resulted in greater stability of international commodity prices. There is widespread dissatisfaction with the outcomes of unregulated financial and commodity markets, which fail to transmit reliable price signals for commodity producers. In recent years, the global economic policy environment seems to have become more favourable to fresh thinking about the need for multilateral actions against the negative impacts of large commodity price fluctuations on development and macroeconomic stability in the world economy.
Meanwhile, challenges to global growth remain high as recovery has proven more prolonged and challenging than that of any previous recession in the last century. A unique set of challenges and opportunities face businesses at the tail end of 2013 and, as such, critical growth factors in the near and long term include: 1) Fiscal challenges facing countries in the Organisation for Economic Co-operation and Development (OECD); 2) Deregulation and rebalancing in key sectors of developing economies; 3) Sectoral issues such as housing; 4) The uncertain longer-term effects of new monetary policies; 5) Commodity price uncertainty, including oil prices; and 6) Food inflation.
On a positive note, growing strength in the US economy could spark a quicker-than-anticipated rebound in the global economic recovery. Furthermore, Africa’s economic outlook for 2013 and 2014 is promising, confirming its healthy resilience to internal and external shocks and its role as a growth pole in an ailing global economy. Its agricultural, mining and energy resources could boost the continent’s economic growth and pave the way for a breakthrough in human development. Africa’s economy is projected to grow by 4.8% in 2013 and accelerate further to 5.3% in 2014...
Please download the PDF for the full review.