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Niël Terblanché Motorists, along with consumers across the country, will breathe a little easier at the pumps in April following the government’s announcement of a reduction in fuel prices. Effective Wednesday, 2 April, the price of petrol will drop by 50 cents per litre, while both 50ppm diesel and 10ppm diesel will be reduced by 80 cents per litre. According to a statement issued by the Ministry of Mines and Energy, the lower prices are the result of over-recoveries recorded during March. “The fuel pricing model recorded over-recoveries of 58.77 cents per litre for petrol, 82.88 cents per litre for diesel 50ppm, and 91.07 cents per litre for diesel 10ppm,” the ministry stated. This development follows a global decline in oil prices, with Brent crude dropping by approximately 7.2% to around US$70 per barrel. Increased oil production from non-OPEC countries such as the United States, Brazil, and Guyana contributed to oversupply and subsequent downward pressure on prices. The ministry also cited progress in peace negotiations between Russia and Ukraine as a factor improving market sentiment. “Protective trade tariff announcements by the USA have heightened concerns about global economic stability, trade tensions, and reduced demand expectations,” the ministry warned. Domestically, the Namibian Dollar appreciated by 1.18% against the United States Dollar, averaging N$18.26 per USD in March. This made fuel imports slightly more affordable. The Namport handling and wharfage tariff was also adjusted from 4.40 cents per litre to 4.60 cents per litre, a routine annual revision that was factored into the new pricing. In Walvis Bay, the new pump prices will be N$20.67 per litre for petrol, N$20.62 for diesel 50ppm, and N$20.72 for diesel 10ppm. Fuel prices across the rest of the country will be adjusted according to the distance from Walvis Bay. The Ministry confirmed it will continue monitoring global and local developments to inform future pricing decisions.

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Providing relief to consumers THE Bank of Namibia has asked commercial banks to lower prime lending rates to align with common monetary area (CMA) countries. This move will ultimately bring down the cost of borrowing for consumers. This is despite the central bank keeping the repo rate unchanged at 6.75%. For years, it has been a standard practice within CMA countries that the prime lending rate does not exceed 3.5% points above the central bank’s repo rate. However, in Namibia, commercial banks’ margins have been standing at 3.75% since 2020. This means Namibians are paying more in interest on loans than individuals in other CMA countries, even when the underlying repo rate is the same. “The monetary policy committee (MPC) is urging the commercial banks to heed the call of the bank to start aligning their margins above the repo rate to the levels of other CMA countries. This move will address this anomaly and in time provide relief to consumers,” says central bank governor Johannes !Gawaxab. !Gawaxab, who was speaking during the repo rate announcements on Tuesday said commercial banks will be given a specified time frame to align accordingly. Additionally, the Bank of Namibia has decided to keep the repo rate unchanged at 6.75% The decision was made unanimously by MPC members. “To continue safeguarding the peg between the Namibia dollar and the South African rand, while supporting the domestic economy, the MPC unanimously decided to keep the repo rate unchanged at 6.75%,” said !Gawaxab. This means that unless commercial banks heed to the call to reduce their profit margins, the prime lending rate will remain at 10.5% until the next monetary policy announcement. The prime lending rate is the interest banks charge for loans while the repo rate is the interest rate the central bank charges commercial banks. Namibian banks made revenue of N$14.5 billion in 2024, an increase of N$1.7 billion compared to 2023. The majority of this income came from net interest on loans at N$8.7 billion. According to the Bank of Namibia’s annual report, this income was largely generated from interest earned on residential mortgages, fixed-term loans, and other interest-related activities. “Net interest income continued to be the banking sector’s principal source of income during 2024, constituting 54.6% of total income in 2024 in comparison with 54.7% in 2023,” the report reads. In February, Capricorn Group reported a profit after tax of N$1.06 billion for the six months ending 31 December 2024, a 28.4% increase compared to the previous year, with 10% of the profit attributable to Botswana. Its subsidiary, Bank Windhoek, made a profit after tax of N$710 million in the same period. Meanwhile, FirstRand Namibia made a profit of N$926.3 million from July to December last year. The company attributed the growth to net interest income. Additionally, Standard Bank Namibia Holdings Limited reported a profit after tax of N$1.053 billion for the year ended 31 December 2024. Nedbank Namibia’s annual results are yet to be announced. These are the four major banks in the country. Globally, monitored central banks have reduced their policy rates, including South Africa. South Africa’s central bank lowered its repo rate by 25 basis points to 7.25% at the 29 May MPC meeting. “Most of the monitored central banks have reduced their policy rates, marking a deviation from their previously unchanged monetary policy stances, except the Bank of Brazil, which continued to tighten,” said !Gawaxab. The post Bank of Namibia urges lower lending rates to ease consumer costs appeared first on The Namibian.