By Saima Nangombe
In July 2025, the World Bank classified Namibia as a lower-middle-income country, when it was previously categorized as an upper-middle-income country.
This change occurred after a large decrease in the country’s GNI per capita, due to economic recession as well as new population estimates. Increased competition appears to be a bad thing but it indeed brings challenges and also creates new strategy opportunities.
What the Reclassification means
The World Bank classifies countries according to income categories, mainly following the GNI per capita, calculated, according to the Atlas method, to be less vulnerable to inflation and fluctuations of exchange rates. As of 2025, lower-middle-income countries can be identified with a GNI per capita of between $1,146 and $4,515.
Namibia’s fall below this threshold has implications for the country’s international standing as well as its economic future. Economically, the new categorization means access to concessional funding, or soft loans, through the World Bank’s IDA or the African Development Bank, for example. These funds also come with lower interest rates and longer payback times, which allows the country to reinvest those resources into critical areas like education, infrastructure, and health.
But there are also reputational concerns in a downgrade. This can be translated by foreign investors as macroeconomic instability, or the failure of a government policy. Locally, it has ignited a public discussion around Namibia’s economic plans over the last decade, which have experienced consistent economic growth in previous years, but have not relatively reducedincome inequality or unemployment.
Opportunities amid the setback
This reclassification opens opportunities that must be strategically seized. As a lower-middle-income country, Namibia can access development grants and technical assistance from less developed countries. Re-negotiate preferential trade agreements within the scope of the Africa Continental Free Trade Area (AfCFTA), economic partnership agreements, and mobilize donor resources to underfunded businesses and youth programs, and reinvigorate domestic reform, especially in education, development policies, and reducing inequality.
The lessons learned and the path forward since independence are that Namibia’s economic history has been one of progress and lost potential. However, an over-reliance on mining, few jobs, entrenched inequality, and a poor education system have constrained growth that is equitable growth.
Looking ahead, Namibia needs to diversify its economy, particularly towards agriculture, manufacturing, and green energy. Investing in human capital through education reform and skills training, improving governance by simplifying unnecessary regulatory procedures, and enhancing the efficacy and efficiency of public institutions to create confidence among investors and trust among citizens. Prioritize the regional integration process so that Namibian businesses can fit more into the AfCFTA, SACU, Afreximbank, etc., by using regional trade as a platform for growth in local production.
In conclusion, the remapping of Namibia should not be seen as merely a downsizing. It is an alarm bell to refocus the interests of the nation and rebalance the development agenda to rebuild an economy that is more inclusive, diverse, and resilient.
* Saima Nangombe is currently a Lead Researcher for the Namibian profile at the African Institute for Development Policy (AFIDEP), where she supports the production of governance indicators for the Africa Integrity Index, the World Bank’s Worldwide Governance Indicators, and the Mo Ibrahim Foundation’s Index of African Governance. Her professional background spans development finance, economic policy, and stakeholder engagement. Saima holds a Master’s degree in Governance and Regional Integration from the Pan African University, a Bachelor of Public Management (Honours) from the Namibia University of Science and Technology, and a certification in International Energy Policy from Sciences Po Paris. Her recent publications focus on topics including export diversification and regional economic integration within SADC.
