Chamwe Kaira
Simonis Storm has projected slower economic growth than the 3.1% forecast in the 2026/27 national budget.
While the budget estimates growth of 3.1% in 2026, Simonis expects expansion of about 2.5%. Under this outlook, growth would remain concentrated in mining and logistics while domestic demand stays weak.
The firm said weaker growth would reduce revenue performance and make deficit reduction more dependent on Southern African Customs Union receipts and global commodity prices. This would narrow the margin for fiscal stability and increase reliance on external factors.
Simonis said fiscal consolidation alone will not address structural constraints in the economy. Youth unemployment stands at about 43%, while overall unemployment ranges between 35% and 36%. The firm said these figures reflect structural mismatches in the labour market.
It said the economy produces many graduates in general academic fields, while labour demand remains focused on technical and applied skills. Employers in energy, mining, logistics and industrial services continue to report shortages of technicians, artisans, instrumentation specialists and mid-level engineers.
The report said this imbalance limits job creation even when investment increases. Oil and gas and green hydrogen projects offer long-term growth potential, but their short- to medium-term employment impact remains limited because they are capital-intensive.
Simonis said the stronger employment gains would come from secondary and support industries such as fabrication, maintenance, industrial services, logistics, port operations and supplier development.
“Without deliberate expansion of technical and vocational education and training (TVET) systems and apprenticeship pathways, these opportunities risk being externalised or filled by imported skills,” Simonis said.
The firm also warned that fiscal risks remain concentrated in a narrow set of variables. SACU revenue continues to play a large role in public finances, leaving the budget exposed to regional trade performance and revenue-sharing outcomes. Mining revenue depends on global price movements. Government guarantees and blended finance arrangements add contingent liability risks.
Interest costs remain high. If growth slows toward 2.5% or borrowing costs increase, public debt could move toward the 65% to 70% range over the medium term instead of stabilising as projected.
“The coming 12 to 18 months will therefore be decisive. The current budget effectively buys time. Whether that time is used to embed structural reform and improve labour absorption will determine whether Namibia’s next growth cycle is inclusive and durable or once again narrowly concentrated and fiscally constrained,” the report said.
Caption
Simonis Storm expectations point to a more moderate expansion of around 2.5%.
- Photo: Contributed
