Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the 2026 Article IV Consultation with Namibia[1].
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 on growth were partly offset by strong uranium output and services sector activity. Inflation declined sharply during 2025, supported by lower global food prices and earlier easing in fuel prices. However, recent fuel price increases resulting from the war in the Middle East are putting upward pressure on inflation.
The near‑term outlook remains subdued. Real GDP growth is projected at 2.1 percent in 2026, constrained by weak diamond output, declining gold production, and elevated fuel costs. Over the medium term, growth is expected to recover gradually to around 3 percent, in line with potential, but structural rigidities—including policy uncertainty, regulatory bottlenecks, skills mismatches, and a large public sector—will likely continue to weigh on productivity and employment creation. New gold mines are expected to come on stream by 2028. Inflation is 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.
Risks to the outlook are tilted to the downside. External risks include an escalation of the war in the Middle East, tighter global financial conditions, and further weakness in natural diamond demand. Domestic risks include, foot-and-mouth disease spreading from neighboring countries, volatility in Southern African Customs Union (SACU) revenue transfers, rising public debt and interest costs, and increased exposure to climate‑related shocks. Upside risks relate to faster progress toward final investment decisions in oil, gas, and green hydrogen projects, as well as stronger gains from structural and public investment reforms.
Executive Board Assessment[2]
In concluding the 2026 Article IV consultation with Namibia, Executive Directors endorsed staff’s appraisal, as follows.
While Namibia has demonstrated resilience to global trade frictions, economic growth remains insufficient to meaningfully reduce unemployment, inequality, and poverty, which are key government objectives. Economic growth slowed to 1.7 percent in 2025 and continued to rely on the mineral sector, underscoring the economy’s narrow production base. Youth unemployment remains particularly high, and the economy continues to be concentrated in the public and extractive sectors. While inflation has moderated and the external position is supported by commodity exports and foreign investment in oil and gas exploration, these gains have yet to translate into broad-based, job-rich growth. The authorities’ emphasis on job creation and inclusive growth, as outlined in the Sixth National Development Plan (NDP6), is timely. To deliver on these objectives, policy efforts should focus on enabling private sector‑led growth, reducing structural barriers to employment, and expanding opportunities across sectors.
The growth outlook remains subdued, with risks tilted to the downside. Real GDP is projected to grow by 2.1 percent in 2026, constrained by weak diamond output, declining gold production, and elevated fuel prices. Over the medium term, growth is expected to return to its potential of around 3 percent, though structural rigidities—such as skills mismatches and limited diversification—continue to weigh on productivity and employment creation. Downside risks include further escalation of the war in the Middle East, volatility in SACU revenues, pressures to delay fiscal reforms and tighter domestic financing conditions, and outbreaks of foot-and-mouth disease. On the upside, progress in oil, gas, and green hydrogen development, together with improved global sentiment, could significantly boost investment and growth.
The authorities’ commitment to fiscal consolidation is welcome and will support the external position, which remains weaker than fundamentals suggest. The FY26/27 budget marks a positive step toward debt sustainability, with consolidation driven by expenditure restraint and PSEMAS reform. Over the medium term, additional consolidation will be essential to create space for growth-enhancing investment, strengthen social protection, enhance resilience to shocks, and ensure debt sustainability.
Advancing fiscal reforms is critical to sustaining consolidation and enabling private sector development. Durable wage bill reduction will require comprehensive civil service reform, including functional job reviews, and rationalization of public sector employment, which would help reduce crowding‑out of the private sector and improve the efficiency and quality of public service delivery. Strengthening oversight of PEs by implementing the PE management framework will help mitigate fiscal risks and improve efficiency. Strengthening public financial management through legislative amendments and implementation of PIMA recommendations will enhance budget credibility. Revenue mobilization can be supported by continued improvements in tax administration and better resource rent capture, particularly in fisheries. The proposed Welwitschia Fund legislation will be key to managing future resource revenues prudently.
Careful calibration of the alignment of the BoN’s policy rate with that of the SARB is essential to safeguard the peg. The reduction of the gap to 25 bps from 75 bps previously is a positive step. While capital flows remain stable, eventually closing the gap will be important to safeguard reserves and mitigate potential external pressures, especially amid global uncertainty and tightening fiscal space.
Efforts to enhance financial sector resilience are progressing, including those to strengthen risk-based supervision, enhance stress-testing framework, fully implement the FIMA, and develop an effective ELA framework. The development of the CCyB, the Instant Payment System, and enhanced crisis resolution frameworks are commendable. The financial system remains stable and well-capitalized, though continued vigilance is warranted, particularly regarding sovereign-bank linkages.
Structural reforms are essential to unlock Namibia’s growth potential and ensure broad-based development. The emergence of oil, gas, and green hydrogen sectors presents an opportunity to diversify the economy and generate employment. Realizing these benefits will require clear policy frameworks, balanced local content strategies, and alignment of education and training systems with evolving labor market needs. More broadly, reforms should focus on reducing regulatory barriers, improving infrastructure and service delivery, and fostering digital transformation. Supporting MSMEs and enhancing access to finance will be critical to expanding private sector participation and innovation.
|
Table 1. Namibia: Selected Economic Indicators, 2023–31
|
|
Population (2025, million): 3.1
|
|
Main exports: Gold, Uranium, Fish, Diamonds.
|
|
Key export markets: South Africa, Botswana, China, Zambia, and Belgium.
|
|
|
2023
|
2024
|
2025
|
2026
|
2027
|
2028
|
2029
|
2030
|
2031
|
|
|
|
|
|
Est.
|
Proj.
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Percent change, unless otherwise specified
|
|
|
Output
|
|
|
|
|
|
|
|
|
|
|
|
Real GDP growth
|
4.3
|
3.8
|
1.7
|
2.1
|
2.8
|
3.0
|
3.1
|
3.0
|
3.0
|
|
|
Nominal GDP growth
|
12.4
|
8.2
|
7.9
|
9.5
|
7.6
|
5.7
|
6.3
|
6.0
|
5.9
|
|
|
Nominal GDP (billions of N$)
|
231.0
|
250.0
|
269.8
|
295.3
|
317.8
|
335.9
|
357.0
|
378.5
|
400.8
|
|
|
Nominal GDP per capita (USD)
|
4,274
|
4,549
|
4,924
|
5,660
|
5,882
|
6,054
|
6,274
|
6,486
|
6,696
|
|
|
GDP Deflator
|
7.7
|
4.3
|
6.1
|
7.2
|
4.7
|
2.6
|
3.1
|
2.9
|
2.8
|
|
|
|
|
|
|
Prices
|
|
|
|
|
|
|
|
|
|
|
|
CPI Inflation, average
|
5.9
|
4.2
|
3.5
|
3.9
|
3.4
|
3.0
|
3.0
|
3.0
|
3.0
|
|
|
CPI Inflation, end of period
|
5.3
|
3.4
|
3.2
|
4.3
|
2.9
|
3.0
|
3.0
|
3.0
|
3.0
|
|
|
|
Percent of GDP, unless otherwise specified
|
|
|
Central Government Budget 1/
|
|
|
|
|
|
|
|
|
|
|
|
Revenue and grants
|
34.7
|
35.2
|
32.0
|
30.9
|
30.5
|
30.8
|
30.8
|
30.8
|
30.8
|
|
|
of which: SACU receipts
|
10.3
|
11.0
|
7.7
|
7.7
|
8.1
|
8.0
|
7.9
|
7.8
|
7.7
|
|
|
Expenditure
|
37.1
|
39.4
|
38.4
|
36.4
|
35.3
|
35.2
|
35.3
|
35.6
|
35.6
|
|
|
of which: personnel expenditure
|
13.7
|
13.9
|
13.4
|
13.3
|
12.7
|
12.6
|
12.6
|
12.6
|
12.6
|
|
|
of which: capital expenditure and net lending
|
2.9
|
3.6
|
3.8
|
2.8
|
2.3
|
2.3
|
2.3
|
2.3
|
2.3
|
|
|
Primary balance
|
2.6
|
0.9
|
-1.2
|
-0.3
|
0.4
|
0.7
|
0.7
|
0.7
|
0.7
|
|
|
Overall fiscal balance
|
-2.4
|
-4.2
|
-6.4
|
-5.5
|
-4.9
|
-4.4
|
-4.6
|
-4.8
|
-4.9
|
|
|
Overall fiscal balance ex. SACU
|
-12.7
|
-15.2
|
-14.1
|
-13.2
|
-13.0
|
-12.5
|
-12.4
|
-12.6
|
-12.6
|
|
|
Public debt, gross 2/
|
65.9
|
67.1
|
66.1
|
66.3
|
67.1
|
67.9
|
68.6
|
69.6
|
70.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and Savings
|
|
|
|
|
|
|
|
|
|
|
|
Investment
|
28.1
|
25.0
|
18.7
|
24.6
|
23.0
|
23.1
|
22.6
|
21.6
|
21.6
|
|
|
Public
|
2.2
|
2.0
|
2.7
|
2.6
|
2.5
|
2.6
|
2.6
|
2.6
|
2.6
|
|
|
Others (incl. SOEs)
|
24.0
|
22.0
|
18.8
|
22.0
|
20.5
|
20.5
|
20.0
|
19.0
|
19.0
|
|
|
Change inventories
|
1.9
|
1.0
|
-2.8
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
|
|
Savings
|
13.1
|
11.1
|
5.6
|
9.6
|
10.0
|
10.5
|
10.6
|
10.3
|
10.2
|
|
|
Public
|
-0.2
|
-0.4
|
-2.2
|
-2.7
|
-2.6
|
-2.2
|
-2.2
|
-2.4
|
-2.5
|
|
|
Others (incl. SOEs)
|
13.3
|
11.5
|
7.8
|
12.2
|
12.6
|
12.7
|
12.8
|
12.7
|
12.7
|
|
|
|
Percent change, unless otherwise specified
|
|
|
Money and Credit
|
|
|
|
|
|
|
|
|
|
|
|
Broad money
|
10.7
|
9.7
|
6.5
|
9.2
|
8.6
|
7.4
|
6.3
|
6.0
|
5.9
|
|
|
Credit to the private sector
|
2.8
|
3.5
|
5.3
|
5.7
|
5.6
|
3.6
|
4.2
|
3.9
|
3.8
|
|
|
BoN repo rate (percent) 3/
|
7.75
|
7.00
|
6.50
|
6.50
|
…
|
…
|
…
|
…
|
…
|
|
| |
|
Percent of GDP, unless otherwise specified
|
|
Balance of Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
Current account balance
|
-15.0
|
-14.9
|
-13.1
|
-15.1
|
-13.1
|
-12.6
|
-12.1
|
-11.4
|
-11.4
|
|
|
Financial account balance
|
-15.8
|
-17.5
|
-6.5
|
-13.9
|
-12.6
|
-12.4
|
-11.8
|
-11.2
|
-11.0
|
|
|
Gross official reserves
|
23.0
|
24.7
|
20.6
|
17.5
|
17.3
|
17.3
|
17.4
|
17.4
|
17.3
|
|
|
Reserves (in months of imports)
|
3.7
|
4.1
|
3.4
|
3.4
|
3.4
|
3.5
|
3.5
|
3.6
|
3.6
|
|
|
External debt
|
75.4
|
74.0
|
70.8
|
63.4
|
62.2
|
61.4
|
60.4
|
59.3
|
58.3
|
|
|
of which: public (incl. IMF) 4/
|
16.4
|
14.9
|
7.1
|
6.2
|
5.6
|
5.1
|
4.6
|
4.0
|
3.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate
|
|
|
|
|
|
|
|
|
|
|
|
REER (percent, yoy)
|
-6.3
|
2.8
|
1.7
|
…
|
…
|
…
|
…
|
…
|
…
|
|
|
Average exchange rate (Namibian dollar per USD)
|
18.5
|
18.3
|
17.9
|
…
|
…
|
…
|
…
|
…
|
…
|
|
|
Sources: Namibian authorities; and IMF staff calculations.
|
|
|
|
|
|
|
|
|
|
|
|
1/ Figures are for the fiscal year as a percent of GDP. The fiscal year runs from April 1 to March 31.
|
|
|
2/ Includes short-term loans from the Bank of Namibia.
|
|
|
3/ Figure for 2026 is as of May 8, 2026.
|
|
|
4/ The ratio is calculated by dividing the stock as of March 31 by nominal GDP for the fiscal year.
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[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] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.
