The Bank of Namibia (BoN) warns of dire consequences of U.S. tariffs on the country’s key exports such as marble, uranium and diamond if the suspension of tariffs under the African Growth and Opportunity Act (AGOA) is not extended.
BoN Governor Johannes !Gawaxab said in terms of direct trade with the U.S., Namibia’s exposure is very minimal, but the impact might persist indirectly.
“Looking at the data, our main exports include uranium, marble, rough diamonds, fish, and wood. Among these, marble exports are particularly exposed to the U.S. market and would be most affected should the tariff suspension not be extended or lifted,” he said.
BoN noted that Namibia’s exports have benefited from AGOA, which allows duty-free access to the U.S. market.
However, a change in trade terms could have ripple effects across several sectors, despite the country’s limited direct exposure.
“Namibia’s exports to the U.S. have benefited from tariff-free access under the AGOA agreement. If we consider the broader macroeconomic implications, it is challenging to quantify the exact impact on GDP. However, it is clear that sectors such as diamonds, marble, and manufacturing could face negative consequences,” said !Gawaxab.
Trade data from 2022 to 2024 shows fluctuating export volumes and varying levels of reliance on the U.S. market.
Uranium exports rose from N$11.3 billion in 2022 to N$15 billion in 2023 before dropping slightly to N$14.5 billion in 2024. U.S.-bound uranium dropped to 0% in 2023 but recovered to 9.7% in 2024.
“Marble exports grew steadily from N$107 million in 2022 to N$263 million in 2023 and N$272 million in 2024. A significant portion of these exports went to the U.S., increasing from 62.1% in 2022 to 88.7% in 2024,” !Gawaxab said.
Rough diamond exports peaked at N$17.7 billion in 2023 before falling to N$11.9 billion in 2024. Yet, the U.S. share remained low, accounting for only 0.5% in 2022 and 0.2% in 2024.
Polished diamonds, however, maintained a larger U.S. share, rising from 10.7% in 2022 to 12.4% in 2024.
“Polished diamonds earned N$7.6 billion in 2022, N$7.1 billion in 2023, and declined to N$5.4 billion in 2024, with U.S. export shares at 10.7%, 11.1%, and 12.4%, respectively,” said !Gawaxab.
BoN warned of broader regional implications through the Southern African Customs Union (SACU).
A simulation conducted in South Africa indicated a GDP decline of 0.7% in a worst-case scenario involving the removal of AGOA benefits, which could reduce revenue shared with SACU members, including Namibia.
“For instance, South Africa ran a simulation which revealed that, in a worst-case scenario involving currency depreciation and the loss of AGOA benefits, GDP could decline by 0.7%. This would reduce gross domestic product, leading to lower SACU revenues for member countries including Botswana, Namibia, Lesotho, and Eswatini,” !Gawaxab noted.
The central bank has also revised its inflation forecast upwards, citing imported inflation and global trade uncertainties.
Inflation, initially projected at 4% for 2025, is now expected to average 4.2%, with adjustments also made to the 2026 outlook.
“Initially, we expected inflation to average around 4% in 2025, but we have since revised that upward to 4.2%, and projections for 2026 have also been adjusted,” said !Gawaxab.
The BoN Governor said while the direct impact of tariffs may be limited, indirect effects, particularly through commodity prices and declining global demand, could be significant for Namibia’s already pressured diamond sector.
“While the direct impact of U.S. tariffs on Namibia may appear minimal, indirect effects, particularly through the diamond industry, could be significant,” !Gawaxab stated.
He added that the next 90 days would be critical in understanding the global trajectory, with Namibia needing to prepare for continued uncertainty in global trade and financial markets.
This comes after a 21% tariff increase on Namibian exports to the United States is expected to drive up prices for American consumers and importers sourcing products from Namibia.
The tariff scheme, announced earlier this month by U.S. President Donald Trump, is part of a broader strategy aimed at addressing perceived trade imbalances, protecting domestic industries, and countering wage suppression in the U.S. economy.
