Namibia’s economic recovery, supported by improving global and South African economic conditions, is expected to create a favorable environment for investment across key asset classes.
According to Simonis Storm Junior Economist Almandro Jansen, sectors such as real estate, fixed income, and construction are poised for significant growth as the economy strengthens.
“The economic recovery offers a conducive landscape for investments across key asset classes, with real estate standing out due to its correlation with lower credit costs,” Jansen said.
He noted that as borrowing costs decline, demand for housing is expected to rise, benefiting both residential and commercial property markets. Investors and developers are well-positioned to capitalize on this growing confidence.
“Investors in the property market can anticipate significant returns, particularly in urban areas where housing supply remains constrained,” Jansen said.
The fixed-income market also presents promising opportunities, with longer-duration bonds offering attractive yields as interest rates stabilize at lower levels.
“With interest rates nearing their lower bounds, locking in yields through long-term bonds is a prudent investment strategy,” Jansen said.
The construction sector is expected to experience robust growth, driven by cyclical demand for materials and increased industrial activity.
“Key projects, such as warehouse developments along the coast to support Namibia’s growing oil and gas sector, are expected to drive growth. Namibia’s recovery trajectory aligns well with the cyclical nature of construction, especially as industrial activities ramp up,” Jansen added.
Looking ahead to 2025, Namibia’s headline Consumer Price Index (CPI) is projected to average around 4.0%, with core inflation stabilizing at 4.5%. This forecast is based on expectations of global market stability and continued domestic monetary easing.
“The inflation trends reflect improved global conditions, but local inefficiencies in housing and utilities continue to exert upward pressure on prices,” Jansen noted.
However, rising global oil prices—currently at US$77 per barrel and expected to exceed $80 per barrel due to geopolitical tensions—could increase transport costs, potentially affecting prices in sectors such as food, housing, and hospitality.
“Monetary policy has played a vital role in supporting economic recovery,” Jansen said.
In 2024, the central bank implemented three successive 25 basis point rate cuts. On Wednesday, the Bank of Namibia’s Monetary Policy Committee further lowered the repo rate by 25 basis points to 6.75%.
Jansen emphasized that this accommodative policy aims to stimulate consumer spending and incentivize investment, setting the stage for broader economic expansion.
