CHAMWE KAIRA
Namibia’s construction sector is projected to grow by 8.5% in 2025, making it the fastest-growing sector despite accounting for just 1.4% of GDP in 2024. This growth is driven by monetary easing, increased public infrastructure investment, and renewed private sector confidence.
Simonis Storm Securities said total output is expected to reach about N$4.3 billion. Growth will focus on residential developments, commercial real estate, and government capital projects.
Since late 2024, the Bank of Namibia has cut interest rates by 100 basis points, easing financing conditions. Another rate cut is expected in the second half of 2025.
Lower rates are already helping developers finance commercial and housing projects. Households have better access to mortgage loans, supporting homeownership and building upgrades.
Construction in Windhoek remains steady, despite a sharp drop in approved plan values in April.
Investment has mainly focused on residential additions and housing developments in growth areas like Katutura, Otjomuise, and Kleine Kuppe. “While smaller-scale projects dominate, larger developments will remain essential for boosting overall sector value,” the report said.
In Swakopmund, monthly approvals have levelled off, but year-to-date growth of 69% compared to 2024 suggests a recovery in building demand.
The report added that a stronger pipeline of commercial and industrial developments is needed. It also called for targeted efforts to attract investors and unlock access to development finance.
The 2025/26 national budget allocates N$12.8 billion for development spending. Much of this will support construction through key infrastructure projects.
These include a N$3.6 billion budget for the Outapi Water Treatment Plant expansion, the Ondangwa–Omutsegwonime pipeline replacement, and preparations for a second desalination plant in the Erongo Region.
Energy projects include a 100 MW solar power plant worth N$1.4 billion and the Baynes Hydropower Station, which will add 600 MW of renewable capacity. Both projects will drive construction demand.
The government has committed to procurement reform, including creating a dedicated procurement court to speed up project execution and reduce delays.
Debt servicing costs are projected at N$13.7 billion, which will pressure overall fiscal space. Exchange rate volatility also risks raising input costs for imported materials like steel and cement. This could squeeze margins and delay projects.
The report stated that the growth of the sector relies on steady project rollouts, stable pricing, sustained credit availability, and investor confidence.
