Namibia’s economy is expected to grow by 4.5% in 2025 and 4.7% in 2026, driven by strong performance in the mining sector, Minister of Finance Ericah Shafudah announced.
“Going forward, we project GDP growth to pick up to 4.5% in 2025 and 4.7% in 2026. The strong growth is anchored on activities in the mining sector as uranium and gold prices, as well as exploration activities, remain broadly favorable,” Shafudah said on Thursday.
She added that the agriculture sector will benefit from normalizing rainfall, while tax relief measures and an eased monetary policy will boost consumer confidence in wholesale and retail trade.
“In addition, sentiments remain positive across many other sectors of the economy such as tourism, transport and storage, financial services, and electricity generation,” she said.
Shafudah acknowledged that economic growth slowed to 3.7% in 2024 from 4.4% in 2023 due to weak global demand for diamonds and drought-related challenges in agriculture.
“The moderation in growth was largely on account of muted global demand for key commodity exports such as diamonds, coupled with drought conditions, which depressed agricultural production,” she said.
She noted that high inflation and interest rates in early 2024 affected consumer spending, despite strong mineral exploration later in the year.
“Furthermore, the high inflation and interest rates during the first half of the year weighed negatively against consumer spending power. As a result, the growth momentum waned despite the strong drive in mineral exploration activities during the latter half of the year,” she said.
Shafudah warned that the struggling diamond sector remains a risk and emphasized economic diversification.
“Thus, measures to further diversify the economy will go a long way to lessen the impact of external shocks on economic outcomes,” she said.
She also highlighted the increasing impact of climate change on the economy.
“Adverse climatic shocks have become more frequent and intense in recent years, highlighting the importance and urgency of adopting climate change adaptation measures to increase resilience against climate shocks,” she said.
Inflation dropped to 4.2% in 2024 from 5.9% in 2023, with early 2025 data showing further declines.
“In line with the abating inflationary pressures, monetary policy has eased, thereby bringing much-needed relief for corporate and household balance sheets alike. Nevertheless, credit extension remains broadly subdued despite elevated liquidity,” she said.
She cautioned that external price shocks and exchange rate fluctuations remain risks.
“The inflation outlook and the subsequent monetary policy path, going forward, remain highly subject to external price shocks and exchange rate developments,” she said.
Shafudah said job creation efforts must be strengthened to address unemployment, poverty, and inequality.
“While we welcome the strengthening economic activities, we remain acutely aware of the pervasive and entrenched national challenges such as high unemployment, poverty, and income inequalities,” she said.
She called for reforms to improve the business climate and regulatory frameworks.
“In line with the new administration’s commitment to solving social challenges, we need to redouble our efforts in fostering conditions to promote job growth through accelerating improvements in the business climate, as well as tax and regulatory frameworks,” she said.
Shafudah emphasized that economic growth must be sustained while addressing structural weaknesses and external risks.
