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Southern Africa

Namibia’s Growth Hinges on Reforms, Private Sector, and Value Addition – AfDB

June 7, 2025

In its 2025 African Economic Outlook, the AfDB emphasised the need for Namibia to reduce its dependence on SACU revenues and volatile commodity exports by focusing on value addition in minerals, scaling infrastructure investment, and improving the business environment.

(3 Minutes Read)

The African Development Bank (AfDB) has urged Namibia to boost private sector participation and fast-track economic diversification to secure long-term sustainable growth. In its 2025 African Economic Outlook, the AfDB emphasised the need for Namibia to reduce its dependence on SACU revenues and volatile commodity exports by focusing on value addition in minerals, scaling infrastructure investment, and improving the business environment.

The call comes as Namibia’s economic growth slowed to 3.7% in 2024, down from 4.4% in 2023, largely due to weak global diamond demand and drought-hit agriculture. While sectors like utilities, wholesale, and financial services performed well, macroeconomic imbalances have worsened, including a widened current account deficit (16.5% of GDP) and increased fiscal pressure.

Despite some financial stability indicators improving, such as a lower non-performing loan ratio and stronger capital buffers, private sector credit growth remained sluggish. Social challenges persist, with unemployment at 36.4% and nearly 27% of the population living in poverty. The AfDB stressed the urgency of addressing education inefficiencies and labour market mismatches to unlock human capital potential.

Looking ahead, the Bank projects moderate GDP growth of 3.8% in 2025 and 3.9% in 2026, underpinned by mining, infrastructure, and agricultural recovery. However, global economic risks, climate change, and structural inefficiencies remain key threats.