Namibia has lost nearly two-thirds of its employers in just five years, raising serious concerns about the country’s long-term economic stability and job creation prospects, according to Cirrus Capital Head of Research, Robert McGregor.
McGregor said the number of individuals identifying as employers fell from around 45,000 in 2018 to only 15,000 in 2023, representing the loss of approximately 30,000 businesses, most of them small and medium-sized enterprises (SMEs).
“Over the span of five years, we lost two out of every three employers, most likely small employers such as SMEs,” McGregor said during a recent engagement.
He noted that the shrinking employer base lies at the heart of Namibia’s growing unemployment crisis, with the broad unemployment rate rising from 33.4% in 2018 to nearly 55% in 2023.
“To address the unemployment challenge, we need to address the employer crisis. It is likely an issue of policy more than anything else — making it easier for people to start, run and manage their own businesses,” McGregor said.
According to Cirrus Capital, only about 550,000 people are currently considered employed in Namibia, and just 115,000 of them are registered taxpayers following last year’s tax adjustments.
“We are seeing less than 4% of the population paying personal income tax, and only about half a percent of the population consider themselves employers,” McGregor said.
He added that the country’s heavy reliance on domestic borrowing is becoming unsustainable, with government’s borrowing requirement increasing from N$21 billion to N$26 billion this year.
“Most of that tends to come from the banking sector and pension funds, but if we continue borrowing at these levels, it’s difficult to see how that can be sustained,” McGregor warned.
He said pension funds are already overexposed to local assets, holding 49% of investments in Namibia compared to the 45% required by law.
“We are quite concerned about what this means for the long term. Can we continue spending the way we are, with limited revenue and relying on domestic markets — effectively on pensioners — to bail out government?” he said.
On the broader economy, McGregor said Namibia’s growth outlook has weakened, with Cirrus revising its 2025 growth forecast to around 3%, down from earlier projections.
“Growth at 3% is roughly at population growth levels, but to address our challenges such as shortfalls in government revenue and unemployment, growth needs to be at 4%, 5% or even 6%,” he said.
He also cautioned that although inflation is expected to remain moderate, the Bank of Namibia’s recent interest rate cuts may have come too soon.
“By cutting interest rates so quickly, we’re providing some relief to consumers, but we’re not leaving much dry powder if conditions worsen,” McGregor said.
Despite the risks, he said opportunities still exist in gold, uranium, oil and gas, and agriculture — sectors that could drive long-term recovery if supported by sound policy and investor confidence.
“Sentiment has deteriorated substantially in recent months, and sentiment is the cheapest form of stimulus. Without confidence, we won’t see the investment and growth the economy needs,” McGregor added.
