Namibia sees modest pickup in economic growth over next 2 years

Namibia’s government on Thursday forecast a modest acceleration in economic growth over the next two years, but it said the fiscal backdrop would remain difficult because of subdued revenues from the mining sector.

Finance Minister Ericah Shafudah said in a budget speech that the Southern African country’s economy was now forecast to grow 4.5% this year and 4.7% in 2026.

That is better than last year’s estimated 3.7% growth but worse than the 5.4% growth the finance ministry had hoped for in 2025 as recently as October.

Namibia has seen relatively strong economic growth in recent years, primarily due to investments in oil, gas and green hydrogen, though it is ranked among the worst countries globally for income inequality and unemployment.

Thursday’s budget speech is the first under Namibia’s new president Netumbo Nandi-Ndaitwah, who has pledged to diversify the resource-rich economy.

“The continued weaknesses in the diamond sector and the subsequent adverse impact on domestic activities remain a key source of vulnerability,” Shafudah said, also emphasising the importance of economic diversification.

The budget deficit for the fiscal year that starts on 1st April, is seen at 4.6% of gross domestic product (GDP), worse than this year’s estimated deficit of 3.9% of GDP.

The government will aim for the deficit to average 4.0% of GDP over the medium term, the minister told lawmakers.

Namibia has a US$750 million Eurobond maturing in October 2025, that will be the largest single debt maturity in its history.

Shafudah said the government planned to pay off US$625 million at maturity from a sinking fund it has been gradually adding to, while it would seek to refinance the remaining US$125 million through the domestic market.