Chamwe Kaira
The electricity and water sector is expected to remain a key growth driver within the secondary industries. The subsector is projected to grow by 8.5% in 2025, up from 2.3% in 2024.
The Bank of Namibia’s December economic outlook said the improvement is linked to expected favourable rainfall that will boost hydroelectric generation at Ruacana, along with ongoing investment in solar, wind and biomass projects.
The central bank said rising reservoir levels will also support stronger water supply performance and that growth is expected to remain high over the medium term in line with the government’s renewable energy strategy and private-sector investment.
The construction sector is expected to continue its recovery in 2025.
Following a 6.4% expansion in 2024, the forecast predicts a 5.5% slowdown in 2025, followed by an acceleration to 9.8% in 2026.
The outlook is supported by mining developments, energy infrastructure projects and public investment in housing and transport.
The central bank said the 2025 forecast is lower than earlier projections because large capital projects are moving slower than expected.
The tertiary industries are projected to remain stable over the medium term, supported by activity in trade, transport, public administration and health services.
Growth is forecast at 4.5% in 2025, slightly below the 4.9% estimated for 2024. The sector continues to benefit from strong domestic demand, expanding logistics infrastructure and activity in basic non-ferrous metals, mainly zinc and copper processing.
The wholesale and retail trade subsector is expected to grow by 6.2% in 2025 after rising by 9.1% in 2024. The central bank stated that ongoing activity in construction, mining supply chains, and oil and gas appraisal work will support demand. Growth is expected to ease slightly as household spending adjusts to tighter financial conditions.
The transport and storage sector is projected to grow by 4.2% in 2025, lower than the 11.4% growth estimated for 2024. The central bank said the slower pace reflected normalisation after a surge in trade and logistics in 2024. The sector will continue to benefit from increased port throughput and improved corridor use. Growth is expected to rise to 6.8% in 2026 before easing to 4.5% in 2027. The projection is 4.3 percentage points lower than the August 2025 outlook.
The public administration and defence sectors are expected to expand by 3.7% in 2025, supported by steady public sector employment and operational spending. Growth is forecast to rise to 4.8% in 2026 before easing to 3.3% in 2027 as the government moves back toward fiscal consolidation. The health sector is projected to grow by 5.6% in 2025 after expanding by 8.3% in 2024.
Caption
Favourable rainfall is expected to improve hydroelectric generation at Ruacana.
- Photo: Contributed
