IMF Executive Board Concludes 2026 Article IV Consultation with Namibia
IMF News, June 11, 2026
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Bibliographic details
- Published: June 11, 2026
Executive summary
- Economic growth slowed to 1.7 percent in 2025, reflecting deep and prolonged weakness in the diamond sector, gradual recovery of gold and livestock production, and a slowdown in oil exploration; these drags were partly offset by strong uranium output and services sector activity.
- Real GDP growth is projected at 2.1 percent in 2026 and to recover gradually to around 3 percent over the medium term.
- Inflation declined sharply during 2025, supported by lower global food prices and earlier easing in fuel prices; recent fuel price increases resulting from the war in the Middle East are putting upward pressure on inflation.
- Safeguarding macroeconomic stability requires: maintaining fiscal prudence to place public debt on a downward path; carefully calibrating monetary policy to preserve the credibility of the exchange‑rate peg to the South African rand; and strengthening financial‑sector oversight to mitigate rising sovereign–financial sector linkages.
- Achieving inclusive and sustainable growth requires accelerating structural reforms to support private‑sector development, reduce regulatory bottlenecks, improve skills alignment, and enhance public investment efficiency, while establishing a robust and transparent framework to manage potential opportunities from developing oil, gas, and green hydrogen.
Near-term and medium-term macroeconomic outlook
- 2025: Real GDP growth 1.7 percent; inflation moderated in 2025.
- 2026: Real GDP growth projected at 2.1 percent; inflation projected to pick up modestly in 2026 due to higher fuel prices and then converge toward 3 percent over the medium term, consistent with South Africa’s new inflation target.
- Medium term: Growth expected to recover gradually to around 3 percent (described as potential).
- Sector dynamics:
- Diamond sector: deep and prolonged weakness constraining growth.
- Gold: gradual recovery but declining production expected to weigh on 2026 growth.
- Uranium: strong output supporting growth.
- Oil exploration: slowdown contributed to lower growth; new gold mines expected to come on stream by 2028.
- Risks:
- External downside risks: escalation of the war in the Middle East, tighter global financial conditions, further weakness in natural diamond demand.
- Domestic downside risks: foot-and-mouth disease spreading from neighboring countries, volatility in SACU revenue transfers, rising public debt and interest costs, increased exposure to climate‑related shocks.
- Upside risks: faster final investment decisions in oil, gas, and green hydrogen projects; stronger gains from structural and public investment reforms.
Fiscal assessment and recommendations
- Executive Board welcomes authorities’ commitment to fiscal consolidation; FY26/27 budget seen as a positive step toward debt sustainability.
- Consolidation drivers: expenditure restraint and PSEMAS reform.
- Over the medium term, additional consolidation needed to:
- Create space for growth-enhancing investment.
- Strengthen social protection.
- Enhance resilience to shocks.
- Ensure debt sustainability.
- Priority fiscal reforms:
- Durable wage bill reduction via comprehensive civil service reform, including functional job reviews and rationalization of public sector employment.
- Strengthen oversight of PEs by implementing the PE management framework to mitigate fiscal risks and improve efficiency.
- Strengthen public financial management through legislative amendments and implementation of PIMA recommendations to enhance budget credibility.
- Revenue mobilization: improvements in tax administration and better resource rent capture, particularly in fisheries.
- Welwitschia Fund legislation proposed as key to managing future resource revenues prudently.
Monetary policy and exchange‑rate peg
- Careful calibration of the alignment of the Bank of Namibia’s policy rate with that of the South African Reserve Bank (SARB) is essential to safeguard the peg.
- The gap reduction to 25 bps from 75 bps previously is noted as a positive step.
- Closing the gap eventually will be important to safeguard reserves and mitigate potential external pressures amid global uncertainty and tightening fiscal space.
- BoN repo rate (percent): 7.75 in 2023; 7.00 in 2024; 6.50 in 2025; figure for 2026 is as of May 8, 2026 (ellipsis “…” reported in source).
Financial sector resilience
- Progress reported on enhancing financial sector resilience:
- Strengthen risk-based supervision.
- Enhance stress-testing framework.
- Fully implement the FIMA.
- Develop an effective ELA framework.
- Development of the CCyB, the Instant Payment System, and enhanced crisis resolution frameworks.
- Financial system assessment: stable and well-capitalized, but vigilance warranted, particularly regarding sovereign-bank linkages.
Structural reforms and diversification
- Structural reforms essential to unlock growth potential and ensure broad-based development.
- Opportunities from oil, gas, and green hydrogen require:
- Clear policy frameworks.
- Balanced local content strategies.
- Alignment of education and training systems with evolving labor market needs.
- Broader reform priorities:
- Reduce regulatory barriers.
- Improve infrastructure and service delivery.
- Foster digital transformation.
- Support MSMEs and enhance access to finance to expand private sector participation and innovation.
Key statistics (selected from Table 1)
- Population (2025, million): 3.1
- Main exports: Gold, Uranium, Fish, Diamonds.
- Key export markets: South Africa, Botswana, China, Zambia, and Belgium.
- Real GDP growth (percent): 2023: 4.3; 2024: 3.8; 2025: 1.7; 2026: 2.1; 2027: 2.8; 2028: 3.0; 2029: 3.1.
- Nominal GDP growth (percent): 2023: 12.4; 2024: 8.2; 2025: 7.9; 2026: 9.5; 2027: 7.6; 2028: 5.7; 2029: 6.3; 2030: 6.0; 2031: 5.9.
- Nominal GDP (billions of N$): 2023: 231.0; 2024: 250.0; 2025: 269.8; 2026: 295.3; 2027: 317.8; 2028: 335.9; 2029: 357.0; 2030: 378.5; 2031: 400.8.
- Nominal GDP per capita (USD): 2023: 4,274; 2024: 4,549; 2025: 4,924; 2026: 5,660; 2027: 5,882; 2028: 6,054; 2029: 6,274; 2030: 6,486; 2031: 6,696.
- GDP Deflator (percent): 2023: 7.7; 2024: 6.1; 2025: 7.2; 2026: 4.7; 2027: 2.6; 2028: 2.9.
- CPI Inflation, average (percent): 2023: 4.2; 2024: 3.5; 2025: 3.9; 2026: 3.4.
- CPI Inflation, end of period (percent): 2023: 5.3; 2024: 3.2.
- Central Government Budget (percent of GDP) — Revenue and grants: 2023: 34.7; 2024: 35.2; 2025: 32.0; 2026: 30.9; 2027: 30.5; 2028: 30.8.
- Central Government Budget — of which: SACU receipts (percent of GDP): 2023: 10.3; 2024: 11.0; 2025: 8.1; 2026: 8.0; 2027: 7.8.
- Expenditure (percent of GDP): 2023: 37.1; 2024: 39.4; 2025: 38.4; 2026: 36.4; 2027: 35.3; 2028: 35.6.
- Personnel expenditure (percent of GDP): 2023: 13.7; 2024: 13.9; 2025: 13.4; 2026: 13.3; 2027: 12.7; 2028: 12.6.
- Capital expenditure and net lending (percent of GDP): 2023: 3.6; 2024: 2.3; 2025: (not shown for 2026 onward in source snippet).
- Primary balance (percent of GDP): 2023: 0.9; 2024: -1.2; 2025: -0.3; 2026: 0.4; 2027: 0.7.
- Overall fiscal balance (percent of GDP): 2023: -2.4; 2024: -4.2; 2025: -6.4; 2026: -5.5; 2027: -4.9; 2028: -4.4; 2029: -4.6; 2030: -4.8.
- Overall fiscal balance ex. SACU (percent of GDP): 2023: -12.7; 2024: -15.2; 2025: -14.1; 2026: -13.2; 2027: -13.0; 2028: -12.5; 2029: -12.4; 2030: -12.6.
- Public debt, gross (percent of GDP): 2023: 65.9; 2024: 67.1; 2025: 66.1; 2026: 66.3; 2027: 67.9; 2028: 68.6; 2029: 69.6; 2030: 70.7.
- Investment (percent of GDP): 2023: 28.1; 2024: 25.0; 2025: 18.7; 2026: 24.6; 2027: 23.0; 2028: 23.1; 2029: 22.6; 2030: 21.6.
- Public: 2023: 2.2; 2024: 2.0; 2025: 2.7; 2026: 2.5.
- Others (incl. SOEs): 2023: 24.0; 2024: 22.0; 2025: 18.8; 2026: 20.5; 2027: 20.0; 2028: 19.0.
- Change inventories (percent of GDP): 2023: 1.9; 2024: 1.0; 2025: -2.8; 2026: 0.0.
- Savings (percent of GDP): 2023: 13.1; 2024: 11.1; 2025: 5.6; 2026: 9.6; 2027: 10.0; 2028: 10.5; 2029: 10.6; 2030: 10.2.
- Broad money (percent): 2023: 10.7; 2024: 9.7; 2025: 6.5; 2026: 9.2; 2027: 8.6; 2028: 7.4.
- Credit to the private sector: (figures by year not shown in source snippet).
- Balance of Payments — Current account balance (percent of GDP): 2023: -15.0; 2024: -14.9; 2025: -13.1; 2026: -15.1; 2027: -12.1; 2028: -11.4.
- Financial account balance (percent of GDP): 2023: -15.8; 2024: -17.5; 2025: -6.5; 2026: -13.9; 2027: -11.8; 2028: -11.2; 2029: -11.0.
- Gross official reserves (percent of GDP): 2023: 24.7; 2024: 20.6; 2025: 17.5; 2026: 17.3; 2027: 17.4.
- Reserves (in months of imports): 2023: 3.7; 2024: 4.1.
- External debt (percent of GDP): 2023: 75.4; 2024: 74.0; 2025: 70.8; 2026: 63.4; 2027: 62.2; 2028: 61.4; 2029: 60.4; 2030: 59.3; 2031: 58.3.
- of which: public (incl. IMF) (percent of GDP): 2023: 16.4; 2024: 14.9; 2025: 7.1; 2026: 6.2; 2027: 5.1; 2028: 4.6; 2029: 4.0.
- REER (percent, yoy): -6.3 (year not specified in table excerpt).
- Average exchange rate (Namibian dollar per USD): 18.5; 18.3; 17.9 (years not individually labeled in excerpt).
Executive Board assessment (condensed)
- Directors endorsed staff appraisal.
- While Namibia has demonstrated resilience to global trade frictions, growth remains insufficient to meaningfully reduce unemployment, inequality, and poverty.
- Growth remains narrowly based and concentrated in public and extractive sectors; youth unemployment remains particularly high.
- Policy focus recommended: enable private sector‑led growth, reduce structural barriers to employment, expand opportunities across sectors, and advance fiscal, monetary, financial, and structural reforms as outlined above.
IMF Executive Board Concludes 2026 Article IV Consultation with Namibia (Press Release No. 26/198), June 11, 2026.