Namibia’s economy is projected to expand by 3.1% in 2026, following a downward revision of 2025 growth to 2.9%, Finance Minister Ericah Shafudah has announced.
She said the outlook points to a modest recovery, with mining output and services activity continuing to underpin economic performance.
Shafudah noted that growth in 2025 slowed from 3.7% recorded in 2024 and fell below the 3.3% estimate presented during the Mid-Year Budget Review, reflecting softer momentum across several productive sectors.
“Going forward, economic growth is projected to recover to 3.1% in 2026, with medium-term growth expected to average approximately 3.3%,” she said.
Economic activity in 2025 was largely driven by uranium and gold mining, wholesale and retail trade, as well as transport and storage. Mining output supported a rebound in primary industries, which grew by 2.8% after contracting by 1.8% in 2024.
Secondary industries slowed sharply to growth of 0.8%, down from 3.0% in 2024, reflecting a 0.8% contraction in manufacturing. Tertiary industries expanded by 3.3%, compared with 4.9% the previous year, supported mainly by wholesale trade activity.
“Primary industries rebounded largely due to increased mining output, while manufacturing recorded a contraction, weighing on secondary sector performance,” Shafudah said.
On inflation, the minister reported that Namibia’s annual inflation rate declined to 2.9% in January 2026 from 3.2% a year earlier, driven by easing food prices, although housing and utility costs continue to exert upward pressure.
The Bank of Namibia expects inflation to average around 3.5% in 2026, supported by lower global oil and food prices. The central bank reduced the repo rate by 50 basis points in 2025 to 6.50% and maintained that level at its February 2026 meeting.
“The mandated 25-basis-point reduction in commercial banks’ lending rates narrowed the prime–repo spread and offers annual savings of at least N$314 million to borrowers,” Shafudah said.
International reserves declined to N$51.6 billion at the end of December 2025, down from N$63.0 billion a year earlier. The decrease was attributed to foreign debt repayments, including the Eurobond redemption, lower SACU receipts and net capital outflows.
Meanwhile, research firm Simonis Storm projects a more moderate outlook. While consensus forecasts from the Bank of Namibia, the IMF and the World Bank place 2026 growth between 3.5% and 4.0%, the firm expects slower expansion.
“We expect growth in 2026 to slow to 2.5%, with expansion concentrated in a narrow set of sectors, while others fall short due to weak domestic demand, fiscal constraints and lingering structural bottlenecks,” Simonis Storm said.
The firm added that Namibia is shifting from a post-shock recovery phase towards consolidation, marked by improved macroeconomic stability but persistent structural challenges, including labour market weaknesses and exposure to external shocks.
