Namibia recorded a net foreign direct investment (FDI) inflow of N$6.7 billion in the first quarter of 2026, reversing a N$2.8 billion outflow recorded in the previous quarter, according to the Bank of Namibia’s June Quarterly Bulletin.
According to the Bank of Namibia (BoN), the recovery was driven by equity injections and intercompany borrowing, although inflows remained below the N$13.1 billion recorded during the same period in 2025.
The central bank said the quarterly improvement was largely underpinned by continued investment in oil and gas exploration, alongside sustained capital inflows into the mining, tourism and logistics sectors.
These inflows were complemented by increased intercompany debt financing within resource-based and services-related industries.
“Net foreign direct investment (FDI) inflows amounted to N$6.7 billion, marking a notable turnaround from a net outflow of N$2.8 billion recorded in the previous quarter,” BoN said.
On an annual basis, however, the Bank reported a moderation in FDI performance, attributing the decline to slower oil and gas exploration activity and reduced reliance on intercompany lending compared with the previous year.
Meanwhile, domestic economic activity remained on an expansion path, recording its 18th consecutive quarter of growth since 2021. The economy expanded by 2.0% in real terms during the first quarter, up from 0.1% in the preceding quarter, while nominal output increased to N$70.9 billion.
The central bank said growth was driven primarily by services-related industries, including wholesale and retail trade, financial services, health, education and public administration. Primary industries also benefited from favourable rainfall, which boosted agricultural and fishing output, although mining activity softened during the period.
BoN noted that manufacturing contracted during the quarter, but stronger construction activity and increased electricity generation helped cushion overall performance in the secondary sector.
On the expenditure side, government consumption and investment spending supported growth, with capital formation increasing in machinery, transport equipment and construction.
“External accounts showed improvement, with the current account deficit narrowing to N$9.9 billion from the previous quarter, supported by lower services payments and reduced net investment income outflows. Despite this, the trade balance remained under pressure as import growth outpaced exports,” BoN said.
As a share of GDP, the current account deficit narrowed to 14.0%, reflecting reduced external financing pressures.
International reserves strengthened to N$51.8 billion at the end of March 2026 before rising further to N$55.4 billion by May, supported by Southern African Customs Union (SACU) receipts, gold monetisation and favourable valuation gains.
BoN said the increase improved import cover to 3.5 months by May 2026, signalling a stronger external liquidity position despite persistent trade imbalances. Namibia’s external balance sheet remained in a net asset position, although it weakened slightly compared with the previous quarter.
The Bank also reported that the real effective exchange rate appreciated by 3.8% year-on-year, reducing the price competitiveness of Namibian exports despite stronger capital inflows and improved foreign exchange reserves.
