Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Namibia.[1] The authorities have consented to the publication of the Staff Report prepared for this consultation.[2]
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.
Looking ahead, growth is projected to remain subdued in the near and medium term. The end of the drought is expected to boost growth in 2025; however, increased global trade policy uncertainty, particularly related to U.S. tariffs, and the weak diamond market will dampen momentum, with growth forecast at 3¾ percent for 2025 and 2026. Over the medium term, growth is projected to be about 3 percent, constrained by structural rigidities despite increased public capital expenditure. Average CPI inflation is projected to ease to 4.1 percent in 2025 and remain around 4.5 percent in the medium term.
Risks to the outlook are tilted to the downside. Key external downside risks include commodity price fluctuations, further worsening of global trade tensions, a deepening of economic fragmentation, and tighter global financial conditions. Domestic downside risks include social discontent resulting from continued high unemployment and inequality and increased volatility associated with weather shocks. Upside risks include an easing of global trade policy tensions and faster development of oil, gas, and green hydrogen projects.
Executive Board Assessment[3]
Executive Directors agreed with the thrust of the staff appraisal. They took positive note of Namibia’s economic resilience, with slowing inflation and improved external position, despite the challenging external environment and welcomed the new government’s commitment to fostering inclusive growth and build resilience to climate shocks. Noting the subdued growth outlook reflecting global trade policy uncertainty and domestic structural rigidities, high unemployment, and inequality, Directors emphasized the need for further efforts to harness Namibia’s economic potential and raise per capita income by promoting a private sector led, inclusive, weather resilient, and diversified economy.
Directors welcomed the authorities’ commitment to maintaining fiscal discipline and creating space for growth enhancing measures. They called for sustained and larger fiscal consolidation over the medium term to entrench the favorable public debt dynamics and strengthen the external position. Directors stressed the need to accelerate fiscal reforms including enacting a comprehensive civil service reform to contain the wage bill, state owned enterprise reforms, strengthening public financial and investment management, and enhancing tax administration to solidify fiscal consolidation. At the same time, they recommended increasing public investment to enhance growth, expanding social protection, and building resilience to weather shocks. They encouraged the authorities to continue their efforts 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.
In the absence of capital outflows, Directors recommended gradually aligning the policy rate with that of the South African Reserve Bank (SARB) to safeguard the currency peg, taking advantage of SARB’s rate reductions. They stressed, however, that the Bank of Namibia should remain vigilant to economic conditions.
Directors welcomed the continued progress in enhancing financial sector resilience, notably through the introduction of the bank resolution policy. They encouraged the authorities to continue to monitor risks including from the sovereign bank nexus and household debt. Directors recommended finalizing additional policy measures, including counter cyclical capital buffers and strengthened cooperation on crisis resolution. Continued efforts to strengthen the AML/CFT framework are crucial to expedite removal from the FATF grey list.
Directors highlighted that bold structural reforms are essential to fostering sustainable, inclusive, and private sector led growth and improving external competitiveness. They recommended addressing key barriers, including by improving human capital and reducing skill mismatches, enhancing the business climate, strengthening governance, and fostering digitalization. Directors supported developing a set of policies aimed at harnessing prospective oil, gas, and green hydrogen for economic diversification and job creation.
It is expected that the next Article IV Consultation with Namibia will be held on the standard 12-month cycle.
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Namibia: Selected Economic Indicators, 2022–30
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Population (2024, million): 3.0 Per-capita GDP (2024, USD): 4471.8
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Quota (current, millions of SDR, percent of total): 54.6 Poverty (2015, percent of national poverty line): 17.4
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Main exports: Diamonds, Fish, Gold, Uranium, Copper.
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Key export markets: South Africa, Botswana, China, Zambia, and Belgium.
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2022
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2023
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2024
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2025
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2026
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2027
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2028
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2029
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2030
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Est.
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Proj.
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Percent change, unless otherwise specified
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Output
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Real GDP growth
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5.4
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4.4
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3.7
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3.8
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3.7
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2.9
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3.0
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3.0
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3.0
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Nominal GDP growth
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12.2
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11.3
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7.1
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8.8
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9.3
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7.4
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7.6
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7.6
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7.6
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Nominal GDP (billions of USD)
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205.6
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228.9
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245.1
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266.8
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291.7
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313.4
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337.1
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362.5
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389.9
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Nominal GDP per capita (USD)
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4,407
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4,236
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4,472
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4,673
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4,898
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5,037
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5,192
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5,346
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5,513
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GDP Deflator
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6.4
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6.6
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3.3
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4.9
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5.5
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4.4
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4.4
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4.4
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4.4
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Prices
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Consumer prices (average)
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6.1
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5.9
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4.2
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4.1
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4.5
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4.5
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4.5
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4.5
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4.5
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Consumer prices (end of period)
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6.9
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5.3
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3.4
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4.5
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4.5
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4.5
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4.5
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4.5
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4.5
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Percent of GDP, unless otherwise specified
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Central Government Budget 1/
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Revenue and grants 2/
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30.5
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35.1
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36.5
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33.2
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32.8
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33.1
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33.3
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33.3
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33.3
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of which: SACU receipts
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6.7
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10.5
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11.2
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7.7
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7.9
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8.2
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8.5
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8.5
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8.4
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Expenditure
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36.1
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37.6
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40.4
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38.8
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37.7
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36.8
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36.6
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36.5
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36.5
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Of which: personnel expenditure
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14.9
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13.9
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14.1
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13.5
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12.8
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12.3
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12.2
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12.2
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12.2
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Of which: capital expenditure and net lending
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3.1
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2.9
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3.9
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4.0
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3.9
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3.5
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3.5
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3.5
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3.5
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Primary balance
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-1.2
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2.7
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1.2
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-0.5
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0.2
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1.4
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1.7
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1.7
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1.7
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Overall fiscal balance
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-5.7
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-2.4
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-3.9
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-5.7
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-4.8
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-3.7
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-3.3
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-3.3
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-3.3
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Overall fiscal balance ex. SACU
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-12.4
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-12.8
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-15.1
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-13.4
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-12.8
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-12.0
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-11.8
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-11.7
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-11.7
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Public debt, gross
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67.5
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66.0
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66.2
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62.3
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62.2
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62.0
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61.1
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60.1
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59.3
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Investment and Savings
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Investment
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20.1
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27.3
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25.6
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22.1
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19.0
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17.8
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16.8
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16.8
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16.8
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Public
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2.6
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2.4
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2.4
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2.6
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2.5
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2.3
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2.3
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2.3
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2.3
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Others (incl. SOEs)
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14.1
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23.7
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21.3
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19.5
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16.5
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15.5
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14.5
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14.5
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14.5
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Change inventories
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3.4
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1.2
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2.0
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0.0
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0.0
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0.0
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0.0
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0.0
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0.0
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Savings
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7.3
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12.0
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10.3
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6.6
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5.4
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5.2
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4.6
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5.1
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5.5
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Public
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-3.2
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-0.2
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0.1
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-1.3
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-1.1
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-0.4
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0.1
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0.2
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0.2
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Others (incl. SOEs)
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10.6
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12.2
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10.2
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7.9
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6.5
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5.6
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4.5
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4.8
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5.3
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Percent change, unless otherwise specified
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Money and Credit
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Broad money
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0.0
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10.7
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9.7
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9.1
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8.6
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7.9
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8.4
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7.7
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7.6
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Credit to the private sector
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4.2
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2.8
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3.5
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4.9
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6.2
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4.1
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5.4
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5.5
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5.5
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BoN repo rate (percent) 3/
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6.75
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7.75
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7.00
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6.75
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…
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…
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…
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…
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…
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Percent of GDP, unless otherwise specified
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Balance of Payments
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Current account balance
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-12.6
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-15.3
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-15.3
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-15.5
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-13.7
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-12.6
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-12.1
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-11.7
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-11.3
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Financial account balance
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-13.3
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-15.9
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-17.2
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-9.3
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-15.4
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-13.6
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-12.3
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-11.8
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-11.8
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Gross official reserves
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22.3
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23.2
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25.1
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18.4
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20.1
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21.2
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21.5
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21.6
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22.2
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Reserves (in months of imports)
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3.9
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3.8
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4.4
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3.4
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3.8
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4.1
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4.2
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4.2
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4.5
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External debt
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71.7
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76.0
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74.6
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68.0
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67.5
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66.8
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65.5
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63.6
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61.8
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of which: public (incl. IMF) 4/
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17.5
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16.6
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14.7
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7.9
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7.3
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6.8
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6.4
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6.0
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5.5
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Exchange rate
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REER (percent, yoy)
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-3.6
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-6.3
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2.7
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…
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…
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…
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…
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…
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…
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Average exchange rate (Namibian dollar per USD)
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16.4
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18.5
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18.3
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…
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…
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…
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…
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…
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…
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Sources: Namibian authorities; and IMF staff calculations.
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1/ Figures are for the fiscal year as a percent of GDP. The fiscal year runs from April 1 to March 31.
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2/ Revenue excludes the line "transactions in assets and liabilities" classified as part of revenue in budget documents. It captures proceeds from asset sales, realized valuation gains from holdings of foreign currency deposits, and other items which are not classified as revenue according to the IMF’s Government Finance Statistics Manual 2010.
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3/ Figure for 2025 is as of April 16, 2025.
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4/ The ratio is calculated by dividing the stock as March 31 by nominal GDP for the fiscal year.
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[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
[2] Under the IMF's Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The staff report will be shortly published on the www.imf.org/Namibia page.
[3] At the conclusion of the discussion, the Managing Director, as Chair of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.
