IMF Staff Country Reports

The 2025 Article IV Consultation discusses that Namibia’s economy faces challenges from heightened global trade policy tensions, increased weather shocks, a structural shift in the global diamond market, and high structural unemployment. Ensuring macroeconomic stability requires maintaining fiscal prudence while creating space for growth-enhancing measures, managing the monetary policy to safeguard the peg, and enhancing the resilience of the financial sector. Risks to the outlook are tilted to the downside, including further global trade policy shocks, geopolitical fragmentation, weather shocks, weak diamond market, and a rolling back of recent fiscal consolidation and state-owned enterprise reforms. Upside risks include a moderation in global trade policy tensions and faster development of oil, gas, and green hydrogen. In order to generate employment through inclusive private sector-led growth that is weather shock-resilient, bold structural reforms are essential. Additionally, a comprehensive strategy is needed to leverage the potential opportunities presented by recent oil discoveries. The report suggests fostering private sector-led growth to reduce unemployment and inequality by reducing skill mismatches, decreasing red tape, optimizing regulations, and promoting digitalization.