The Bank of Namibia has warned that Namibia’s economy is not growing fast enough to keep pace with the country’s rising population, raising concerns that living standards, incomes and job creation could come under increasing pressure if the trend continues.
Speaking at a stakeholder engagement in Oshakati, Bank of Namibia Governor Ebson Uanguta said the economy grew by 1.7% in 2025, below both its estimated long-term growth potential of around 3% and the country’s annual population growth rate of about 2%.
He said when the economy expands more slowly than the population, the country’s wealth is shared among more people, resulting in lower income per person and slower improvements in living standards.
“Our economy’s long-term growth potential is around 3%. However, in 2025, economic growth reached only 1.7%, falling below that potential,” Uanguta said.
“At the same time, the population is growing at approximately 2% per year. When an economy grows more slowly than its population, it is not a good sign. If this trend continues, the country will become poorer over time because per capita income will decline.”
Uanguta said sustained periods of economic growth below population growth would make it more difficult to create jobs, raise household incomes and improve the delivery of public services as economic gains are spread across a larger population.
“It is therefore essential that the economy grows at a faster rate than the population to improve living standards and ensure sustained economic prosperity,” he said.
The governor attributed the weak economic performance largely to the slowdown in the diamond sector, where demand for natural diamonds has declined amid growing competition from cheaper laboratory-grown alternatives.
“We have been relying on natural diamonds. The demand overall has come down, and that has affected our GDP growth and also our revenue proceeds to the government,” Uanguta said.
He added that slow economic growth was also limiting the economy’s ability to create enough jobs, particularly for the growing number of young Namibians entering the labour market each year.
Despite the weaker growth, Uanguta said Namibia’s medium-to-long-term economic outlook remains positive, expressing confidence that new and emerging industries would support stronger economic expansion in the years ahead.
