The Bank of Namibia (BoN) has projected that the country’s economy will expand by 3.5 per cent in 2025, a marginal slowdown from the estimated 3.7 per cent growth in 2024. According to the central bank’s latest August Economic Outlook report, the deceleration is largely driven by underperformance in the agriculture, mining, and manufacturing sectors.
The bank attributed the contraction in the primary industries to persistent drought conditions in 2024, which severely affected livestock production. Reduced herd sizes in the livestock sub-sector are expected to continue weighing on output, hindering the sector’s recovery in the short term.
The report further indicates that diamond mining will remain under pressure, with output anticipated to decline as weak global demand is compounded by the imposition of trade tariffs and intensifying competition from laboratory-grown diamonds. The manufacturing sector is also forecast to contract, particularly in meat processing and the production of basic non-ferrous metals, reflecting reduced demand and supply-side constraints.
Nevertheless, the BoN expects economic momentum to improve in 2026, with growth forecast at 3.9 per cent. This anticipated recovery is underpinned by a rebound in agricultural output, continued expansion in construction activity, and increased production in uranium and other metal ores, sectors which have shown resilience amid broader economic headwinds.
The central bank cautions that risks to the outlook remain pronounced. These include potential reductions in diamond export earnings, disruptions in trade arising from protectionist measures in key markets, and inflationary pressures linked to ongoing global conflicts. In addition, lower revenues from the Southern African Customs Union and weaker diamond sales could exacerbate debt sustainability concerns, potentially necessitating expenditure adjustments to preserve fiscal stability.
The BoN’s projections underscore the vulnerability of Namibia’s economic trajectory to climatic conditions, global commodity trends, and trade policy shifts. As the nation navigates these challenges, policymakers face the task of balancing fiscal prudence with measures to stimulate sustainable growth.
