Chamwe Kaira
Namibia needs higher economic growth to reduce unemployment and inequality, the African Development Bank has said.
Real GDP is expected to grow to 3.8% in 2025 and 3.9% in 2026.
The recovery is linked to improved weather conditions and activity in the natural resources sector. The sector includes petroleum exploration and increased uranium production, supported by higher global commodity prices.
“A recovery is also evident in tourism, transport and storage, financial services, and electricity generation. Growth prospects are expected to be bolstered by developments in the green hydrogen industry, increased investment in oil and gas, and infrastructure expansion. The downside risks include global trade disruptions such as the US tariffs, persisting depressed diamond prices, climate shocks, and uncertainty in the green hydrogen initiatives,” the bank said.
The bank said the government is working to control public spending and maintain debt levels.
The fiscal deficit is expected to widen slightly to 3.2% of GDP due to higher spending compared to revenue.
“The external position is expected to remain strong with net FDI inflows, although the current account deficit will remain elevated at 15.1% of GDP in 2025. Furthermore, ongoing efforts to improve the regulatory environment for entrepreneurship and MSME growth, diversifying the economy through value addition and investment in new growth sectors are expected to generate benefits for most of the population,” the bank said.
The bank said risks in economic and financial governance remain moderate.
It noted that the medium-term expenditure framework has improved public financial management.
The bank’s 2022 country fiduciary risk assessment rated overall risk as moderate and called for a review of public finance laws.
Efforts are underway to strengthen systems and build capacity.
“Professionalisation and certification of public accountants is underway as required under the new PFM Act and regulations to enable implementation of the IPSAS. Capacity building in the office of the auditor general on audits of information systems, extractive industries, green hydrogen projects and public goods,” the bank said.
The bank is also supporting Namibia to strengthen environmental and social safeguards as investment in infrastructure increases.
Implementation of international public sector accounting standards is still pending.
