Windhoek: Governor of the Bank of Namibia (BoN), Johannes !Gawaxab, has warned that Namibia's diamond industry is facing significant headwinds, with production expected to contract for a third consecutive year. He further confirmed that the country is fully prepared to redeem its Eurobond later this month.
According to Namibia Press Agency, speaking during the Monetary Policy Announcement, !Gawaxab said the diamond sector continues to experience 'serious hazards' that are expected to persist in the medium term. He stated that diamond mining production in Namibia is expected to contract by 4.5 per cent in 2025 and 5.7 per cent in 2026, following a 3.7 per cent contraction in 2024. The year 2026, in particular, will be challenging for the diamond market in Namibia.
He attributed the sector's difficulties to tariff risks, weak coordination among handlers, and intense competition from lab-grown diamonds, which have placed pressure on natural diamond prices globally. !Gawaxab added that diamond revenues, including corporation tax, royalties, and dividend payments, have declined substantially. He mentioned that domestic diamond companies remain financially constrained due to debt obligations and falling revenues and may require support from the authorities, particularly through an extension of royalties due at the end of 2025.
He emphasized that the industry supports around 3,000 employees and sustains between 40,000 and 50,000 residents, urging support for the sector during this difficult time. Turning to the Eurobond redemption, !Gawaxab confirmed that all resources have been fully mobilized to redeem the US$500 million Eurobond, which matures on 29 October 2025.
'The total amount required is approximately N.dollars 13.5 billion, assuming an exchange rate of N.dollars 17.50 to the US dollar. There has been proper planning and close coordination between the Bank of Namibia and the Ministry of Finance to ensure timely redemption,' he said, reaffirming Namibia's commitment to maintaining its creditworthiness.
Pivoting to the external sector, !Gawaxab said Namibia's merchandise trade deficit narrowed by 16.1 per cent to N.dollars 17.9 billion during the first eight months of 2025, mainly due to higher export earnings from uranium and gold relative to import payments. 'Despite global uncertainties, Namibia's external position has improved, supported by better export performance and adequate international reserves,' he said.