Windhoek: Namibia’s economy is projected to expand by 4.5 per cent in 2025 and 4.7 per cent in 2026, representing an increase from earlier estimates of 3.7 per cent and 4.4 per cent for the respective years. This was announced by the Minister of Finance, Ericah Shafudah, during the tabling of the 2025/26 national budget of N.dollars 106.3 billion in the National Assembly on Thursday.
According to Namibia Press Agency, Shafudah stated that domestic economic prospects remain broadly positive, despite a marginal weakening of activities during 2024. The Namibia Statistics Agency (NSA) reported in its national accounts published on 20 March 2025, that economic activities expanded by 3.7 per cent in 2024 from 4.4 per cent in 2023. Shafudah attributed the moderation in growth largely to weak global demand for essential commodity exports such as diamonds, along with drought conditions affecting agricultural production.
The finance minister highlighted the impact of high inflation and interest rates during the first half of the year, which negatively affected consumer spending power and caused a slowdown in growth momentum. This occurred despite a strong drive in mineral exploration activities later in the year. Continued weaknesses in the diamond sector and their adverse impact on domestic activities remain a key vulnerability, according to Shafudah.
She emphasized the need for economic diversification to mitigate the impact of external shocks on economic outcomes, noting the increasing frequency and intensity of adverse climatic shocks. This underscores the importance and urgency of adopting climate change adaptation measures to boost resilience against such shocks.
Shafudah also pointed out that robust growth is being supported by activities in the mining sector, with positive trends in uranium and gold prices and exploration efforts. The agriculture sector is expected to receive additional support from normalizing rainfall patterns, while the wholesale and retail sector may benefit from enhanced consumer confidence, driven by tax relief measures introduced in 2024 and a more relaxed monetary policy.
The minister affirmed ongoing positivity in various sectors of the economy, including tourism, transportation and storage, financial services, and electricity generation. Regarding inflation dynamics, Shafudah noted that domestic prices eased to an average inflation rate of 4.2 per cent in 2024, down from 5.9 per cent in 2023.
She concluded by acknowledging the strengthening economic activities, while also recognizing persistent national challenges such as high unemployment, poverty, and income inequality.