IMF Executive Board Concludes 2025 Article IV Consultation with Namibia
IMF News, June 17, 2025
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- Published: June 17, 2025
Economic Developments and Outlook
- Namibia’s economic growth decelerated from 5.4 percent in 2022 to 3.7 percent in 2024 as a decline in production in response to lower diamond prices outweighed momentum stemming from rising gold and uranium prices.
- Oil exploration plateaued in 2024 following a spike in 2023, while agriculture contracted sharply due to the drought of 2023–24, the most severe in a century.
- Inflation has fallen, reflecting a drop in food and fuel prices in international markets.
- Growth projections:
- 2025: 3¾ percent (forecast)
- 2026: 3¾ percent (forecast)
- Medium term: about 3 percent
- Average CPI inflation projections:
- 2025: 4.1 percent
- Medium term: around 4.5 percent
- Risk assessment:
- Downside external risks: commodity price fluctuations; further worsening of global trade tensions; deepening of economic fragmentation; tighter global financial conditions.
- Downside domestic risks: social discontent from continued high unemployment and inequality; increased volatility from weather shocks.
- Upside risks: easing of global trade policy tensions; faster development of oil, gas, and green hydrogen projects.
Executive Board Assessment and Staff Appraisal
- Directors agreed with the thrust of the staff appraisal and noted:
- Positive note of Namibia’s economic resilience, with slowing inflation and improved external position, despite the challenging external environment.
- Welcome for the new government’s commitment to fostering inclusive growth and build resilience to climate shocks.
- Key concerns and priorities:
- Subdued growth outlook reflecting global trade policy uncertainty and domestic structural rigidities, high unemployment, and inequality.
- Need to harness Namibia’s economic potential and raise per capita income by promoting a private sector led, inclusive, weather resilient, and diversified economy.
- Timing:
- It is expected that the next Article IV Consultation with Namibia will be held on the standard 12-month cycle.
Fiscal and Monetary Policy Recommendations
- Fiscal policy:
- Welcome for authorities’ commitment to maintaining fiscal discipline and creating space for growth-enhancing measures.
- Call for sustained and larger fiscal consolidation over the medium term to entrench favorable public debt dynamics and strengthen the external position.
- Acceleration of fiscal reforms urged, including:
- Enacting a comprehensive civil service reform to contain the wage bill.
- State owned enterprise reforms.
- Strengthening public financial and investment management.
- Enhancing tax administration to solidify fiscal consolidation.
- At the same time, recommended actions:
- Increasing public investment to enhance growth.
- Expanding social protection.
- Building resilience to weather shocks.
- Encouragement to establish, with Fund technical assistance, a strong governance framework for the sovereign wealth fund and a natural resource management framework to safeguard long term macroeconomic stability and support economic development.
- Monetary policy and exchange rate:
- Recommendation: In the absence of capital outflows, gradually align the policy rate with that of the South African Reserve Bank (SARB) to safeguard the currency peg, taking advantage of SARB’s rate reductions.
- Caution: Bank of Namibia should remain vigilant to economic conditions.
Financial Sector and AML/CFT
- Progress welcomed in enhancing financial sector resilience, notably through the introduction of the bank resolution policy.
- Continued monitoring encouraged for risks including the sovereign bank nexus and household debt.
- Recommendations:
- Finalize additional policy measures, including counter cyclical capital buffers and strengthened cooperation on crisis resolution.
- Continued efforts to strengthen the AML/CFT framework to expedite removal from the FATF grey list.
Structural Reform Priorities
- Directors highlighted that bold structural reforms are essential to fostering sustainable, inclusive, and private sector led growth and improving external competitiveness.
- Recommended measures:
- Improve human capital and reduce skill mismatches.
- Enhance the business climate.
- Strengthen governance.
- Foster digitalization.
- Develop a set of policies to harness prospective oil, gas, and green hydrogen for economic diversification and job creation.
Key Economic Indicators and Selected Figures (2022–30 and related)
- Population (2024, million): 3.0
- Per-capita GDP (2024, USD): 4471.8
- Quota (current, millions of SDR, percent of total): 54.6
- Poverty (2015, percent of national poverty line): 17.4
- Main exports: Diamonds, Fish, Gold, Uranium, Copper.
- Key export markets: South Africa, Botswana, China, Zambia, and Belgium.
- Real GDP growth:
- 2022: 5.4
- 2023: 4.4
- 2024: 3.7
- 2025 (Proj.): 3.8
- 2026 (Proj.): 2.9
- 2027 (Proj.): 3.0
- Nominal GDP growth:
- 2022: 12.2
- 2023: 11.3
- 2024: 7.1
- 2025 (Proj.): 8.8
- 2026 (Proj.): 9.3
- 2027 (Proj.): 7.4
- 2028 (Proj.): 7.6
- Nominal GDP (billions of USD):
- 2022: 205.6
- 2023: 228.9
- 2024: 245.1
- 2025 (Proj.): 266.8
- 2026 (Proj.): 291.7
- 2027 (Proj.): 313.4
- 2028 (Proj.): 337.1
- 2029 (Proj.): 362.5
- 2030 (Proj.): 389.9
- Nominal GDP per capita (USD):
- 2022: 4,407
- 2023: 4,236
- 2024: 4,472
- 2025 (Proj.): 4,673
- 2026 (Proj.): 4,898
- 2027 (Proj.): 5,037
- 2028 (Proj.): 5,192
- 2029 (Proj.): 5,346
- 2030 (Proj.): 5,513
- GDP Deflator:
- 2022: 6.4
- 2023: 6.6
- 2024: 3.3
- 2025 (Proj.): 4.9
- 2026 (Proj.): 5.5
- Consumer prices (average):
- 2022: 6.1
- 2023: 5.9
- 2024: 4.2
- 2025 (Proj.): 4.1
- 2026 (Proj.): 4.5
- Consumer prices (end of period):
- 2022: 6.9
- 2023: 5.3
- 2024: 3.4
- Central Government Budget (percent of GDP), Revenue and grants 2/:
- 2022: 30.5
- 2023: 35.1
- 2024: 36.5
- 2025 (Proj.): 33.2
- 2026 (Proj.): 32.8
- 2027 (Proj.): 33.1
- 2028 (Proj.): 33.3
- Of which: SACU receipts:
- 2022: 6.7
- 2023: 10.5
- 2024: 11.2
- 2025 (Proj.): 7.7
- 2026 (Proj.): 7.9
- 2027 (Proj.): 8.2
- 2028 (Proj.): 8.5
- 2029 (Proj.): 8.4
- Expenditure:
- 2022: 36.1
- 2023: 37.6
- 2024: 40.4
- 2025 (Proj.): 38.8
- 2026 (Proj.): 37.7
- 2027 (Proj.): 36.8
- 2028 (Proj.): 36.6
- Of which: personnel expenditure:
- 2022: 14.9
- 2023: 13.9
- 2024: 14.1
- 2025 (Proj.): 13.5
- 2026 (Proj.): 12.8
- 2027 (Proj.): 12.3
- Of which: capital expenditure and net lending:
- 2022: 3.1
- 2023: 3.9
- 2024: 4.0
- 2025 (Proj.): 3.5
- Primary balance:
- 2022: -1.2
- 2023: 2.7
- 2024: 1.2
- 2025 (Proj.): -0.5
- 2026 (Proj.): 0.2
- 2027 (Proj.): 1.4
- 2028 (Proj.): 1.7
- Overall fiscal balance:
- 2022: -5.7
- 2023: -2.4
- 2024: -3.9
- 2025 (Proj.): -4.8
- 2026 (Proj.): -3.7
- 2027 (Proj.): -3.3
- Overall fiscal balance ex. SACU:
- 2022: -12.4
- 2023: -12.8
- 2024: -15.1
- 2025 (Proj.): -13.4
- 2026 (Proj.): -12.0
- 2027 (Proj.): -11.8
- 2028 (Proj.): -11.7
- Public debt, gross:
- 2022: 67.5
- 2023: 66.0
- 2024: 66.2
- 2025 (Proj.): 62.3
- 2026 (Proj.): 62.2
- 2027 (Proj.): 62.0
- 2028 (Proj.): 61.1
- 2029 (Proj.): 60.1
- 2030 (Proj.): 59.3
- Investment:
- 2022: 20.1
- 2023: 27.3
- 2024: 25.6
- 2025 (Proj.): 22.1
- 2026 (Proj.): 19.0
- 2027 (Proj.): 17.8
- 2028 (Proj.): 16.8
- Public (investment, percent of GDP):
- 2022: 2.6
- 2023: 2.4
- 2024: 2.5
- 2025 (Proj.): 2.3
- Others (incl. SOEs) (investment, percent of GDP):
- 2022: 23.7
- 2023: 21.3
- 2024: 19.5
- 2025 (Proj.): 16.5
- 2026 (Proj.): 15.5
- 2027 (Proj.): 14.5
- Change inventories:
- 2022: 2.0
- 2023: 0.0
- 2024: (not listed)
- Savings:
- 2022: 7.3
- 2023: 12.0
- 2024: 10.3
- 2025 (Proj.): 5.2
- 2026 (Proj.): 4.6
- 2027 (Proj.): 5.1
- 2028 (Proj.): -3.2
- 2029 (Proj.): -0.2
- 2030 (Proj.): 0.1
- Money and Credit:
- Broad money:
- 2022: 10.7
- 2023: 9.7
- 2024: 9.1
- 2025 (Proj.): 8.6
- Credit to the private sector:
- 2022: 2.8
- 2023: 6.2
- BoN repo rate (percent) 3/:
- 2022: 6.75
- 2023: 7.75
- 2024: 7.00
- 2025: …
- Balance of Payments:
- Current account balance:
- 2022: -12.6
- 2023: -15.3
- 2024: -15.5
- 2025 (Proj.): -13.7
- 2026 (Proj.): -12.1
- 2027 (Proj.): -11.3
- Financial account balance:
- 2022: -13.3
- 2023: -15.9
- 2024: -17.2
- 2025 (Proj.): -9.3
- 2026 (Proj.): -15.4
- 2027 (Proj.): -13.6
- 2028 (Proj.): -12.3
- Gross official reserves:
- 2022: 22.3
- 2023: 23.2
- 2024: 25.1
- 2025 (Proj.): 18.4
- 2026 (Proj.): 21.2
- 2027 (Proj.): 21.5
- 2028 (Proj.): 21.6
- 2029 (Proj.): 22.2
- Reserves (in months of imports): (not listed)
- External debt:
- 2022: 71.7
- 2023: 76.0
- 2024: 74.6
- 2025 (Proj.): 68.0
- 2026 (Proj.): 66.8
- 2027 (Proj.): 65.5
- 2028 (Proj.): 63.6
- 2029 (Proj.): 61.8
- of which: public (incl. IMF) 4/:
- 2022: 17.5
- 2023: 16.6
- 2024: 14.7
- 2025 (Proj.): 6.8
- 2026 (Proj.): 6.0
- Exchange rate:
- REER (percent, yoy):
- 2022: -3.6
- 2023: -6.3
- Average exchange rate (Namibian dollar per USD):
- 2022: 16.4
- 2023: 18.5
- 2024: 18.3
Policy Priorities to Support Inclusive, Resilient Growth
- Maintain fiscal prudence while creating space for growth-enhancing measures.
- Manage monetary policy to safeguard the peg, with gradual alignment to SARB rates in the absence of capital outflows.
- Enhance financial sector resilience and complete remaining policy measures (counter cyclical capital buffers, crisis resolution cooperation).
- Accelerate structural reforms to:
- Promote private sector-led, inclusive, weather-shock-resilient growth.
- Improve human capital, address skill mismatches, and enhance the business climate.
- Strengthen governance and foster digitalization.
- Develop and implement comprehensive strategy to leverage potential opportunities from recent oil discoveries and harness oil, gas, and green hydrogen projects for diversification and job creation.
IMF Communications Department; Executive Board Concludes 2025 Article IV Consultation with Namibia; June 17, 2025.