By Erastus Kalenga Hamunjela
The Bank of Namibia released its 2025 Annual Report on Tuesday. It covers GDP growth, inflation, credit markets, the banking sector, the twin deficits, commodity prices, and the outlook for an economy moving through one of the most significant structural transitions in its post-independence history.
Most people will not read it. Those who do will likely stop at the headline figures, note that growth slowed to 1.7% and inflation fell to 3.5%, and move on. This article is for everyone else. It is for those who want to understand not just the numbers, but what they mean for the salary in their bank account, the investment they are building, or the monthly budget that never stretches far enough.
The report tells three different stories, depending on where you stand.
If you are a worker, the most important number is not GDP. It is the gap between prices and wages. Namibia’s economy grew by 1.7% in 2025, down from 3.8% in 2024, driven by contractions in livestock farming, which fell 21.7%, and diamond mining, which also declined. When growth slows, hiring becomes cautious and incomes stagnate.
But costs do not slow. Food inflation held at 5.2% in 2025, driven by higher meat prices, reduced fish catches and global supply pressures. From 1 April 2026, petrol prices rose by N$2.50 per litre and diesel by N$4.00, adding further strain. Petrol prices have already more than doubled since 2016.
The median formal sector wage sits at about N$4,000 per month. The minimum wage translates to roughly N$3,510. Against this, cumulative inflation of about 47% since 2016 means that N$100 then costs around N$147 today. To maintain purchasing power, a N$4,000 salary in 2016 would need to be about N$5,880 today. Most workers are not earning that.
This gap shows up in the data. Household credit grew by just 2.7% in 2025. Mortgage credit rose by only 0.2%. Overdraft borrowing fell by 10.7%, while real private consumption declined by 0.3% after rising 13.6% in 2024. Households are pulling back because their budgets no longer balance.
For investors, the report is both a warning and a guide. Uranium export earnings surged 94.3% to N$28.2 billion, while gold rose 38.1% to N$20.2 billion. In contrast, diamond exports fell 20.5% to N$10.1 billion. These are structural shifts, not short-term cycles.
The banking sector remains stable, with a liquid assets ratio of 21.4% against a 10.0% requirement. The prime lending rate closed at 10.00% after a 50 basis point cut in the repo rate to 6.50%. Corporate credit grew 6.8%, but household borrowing weakened.
Namibia’s twin deficits remain large, with a budget deficit of 6.6% of GDP and a current account deficit of 13.1%. However, the current account deficit is largely driven by investment into oil and gas, not consumption. If production materialises, both deficits could narrow over time.
For those simply trying to survive, the report confirms reality. Prices are higher. Food remains expensive. Fuel costs are rising. Incomes have not kept pace. The system is stable, but that stability does not ease daily pressure.
The message is clear. The economy is changing, but slowly. Costs are rising, but consistently. Waiting for conditions to improve is not a strategy.
The numbers are not abstract. They describe a reality already in motion.
Disclaimer: The information provided in this article is for educational and informational purposes only. It does not constitute financial, investment, legal, or professional advice. Readers should not rely on this content as the sole basis for making investment decisions and are encouraged to seek independent professional advice before acting on any information contained herein.
*Erastus Kalenga Hamunjela is a Namibian investment researcher and financial markets commentator with a strong focus on capital markets, investment literacy, and data driven financial education.
For Educational Investments, Business Consultation & Collaborations: erastuskalengier@gmail.com
