Namibia’s central bank said the limited depth of the country’s financial sector and a lack of local investment opportunities are leading to capital outflows to neighboring South Africa.
“The largest chunk of capital outflows is in the form of portfolio investments and the vast majority of these investments are to South Africa,” Ndangi Katoma, a spokesman for the Bank of Namibia, said in an e-mailed response to questions yesterday. “Namibia invests large sums of money into investment assets in South Africa largely through contractual savings and institutional investors.”
Namibian portfolio investments in South Africa were 4.5 billion Namibian dollars ($446 million) last year, after inflows of 224 million Namibian dollars in 2011, according to central bank figures. Capital outflows from 2008 to 2010 totaled 13.7 billion Namibian dollars, the figures show.
Namibia, the world’s biggest offshore diamond miner and the fourth-largest uranium producer, relies on income from a customs union with South Africa, Swaziland, Lesotho and Botswana for about a third of its budget, according to government data.