The Bank of Namibia (BoN) forecasts a continued contraction in the agriculture, forestry and fishing sectors for 2024, with a slight improvement expected in 2025.
BoN’s Economic Outlook for August 2024 reveals that the sector contracted by 3.4% in 2023, and this decline is expected to intensify to 4.9% in 2024 before moderating to a minor contraction of 0.1% in 2025.
“This downward trend is primarily attributed to the crop farming subsector, which is anticipated to experience a severe downturn from a decline of 31.7% in 2023 to a deeper contraction of 34.5% in 2024 due to persistent drought conditions,” the BoN said.
Conversely, the livestock subsector is expected to record a robust growth of 6.6% in 2024, down slightly from 9.1% in 2023.
Growth in livestock farming is driven by increased livestock marketing necessitated by the drought.
“However, livestock growth is projected to decline in 2025 as herd rebuilding efforts commence. The adverse effects of the drought on the agriculture and water sectors are expected to exacerbate the overall economic performance,” said the outlook.
Meanwhile, domestic growth is projected to slow down in 2024 before improving in 2025.
“Real GDP growth is anticipated to slow down to 3.1% in 2024 before accelerating to 3.9% in 2025. This moderation in growth during 2024 is primarily attributed to a subdued performance within the primary sector, particularly in mining and agriculture,” BoN reveals.
The latest estimate for the 2024 GDP growth represents a downward revision from 3.7% published in the March 2024 Economic Outlook update.
Compared to March 2024 projections, the downgrading of 2024 growth is mainly based on worse than anticipated performance for the whole primary sector and the construction sector.
BoN said the domestic growth projections for Namibia face substantial risks from global monetary policy tightening, adverse drought effects, and weakened global commodity demand.
“The global trend of tight monetary conditions could continue to dampen purchasing power and consumption. Drought conditions threaten agricultural output, while strained water resources could disrupt various sectors,” reported the bank.
