The Namibian government has forecast a modest acceleration in economic growth over the next two years, but acknowledged that the fiscal environment will remain challenging due to low revenues from the mining sector.
Finance Minister Ericah Shafudah, delivering the national budget speech, stated that the southern African country's economy is now expected to grow by 4.5% in 2025 and 4.7% in 2026.
While this is an improvement over the estimated 3.7% growth recorded last year, it falls short of the 5.4% growth target projected by the Ministry of Finance last October for 2025.
Namibia has experienced relatively strong economic growth in recent years, mainly driven by investments in oil, gas, and green hydrogen. However, it remains among the worst-ranked countries globally in terms of income inequality and unemployment.
Thursday’s budget speech marked the first under Namibia’s new President, Netumbo Nandi-Ndaitwah, who has pledged to diversify the country’s resource-rich economy.
“The continued weaknesses in the diamond sector and their negative impact on domestic economic activity remain a major source of vulnerability,” Shafudah said, also stressing the importance of economic diversification.
The budget deficit for the fiscal year beginning April 1 is projected at 4.6% of gross domestic product (GDP), a deterioration from this year’s estimated 3.9% of GDP.
The government is targeting an average deficit of 4.0% of GDP over the medium term, the finance minister told lawmakers.
Namibia faces a $750 million Eurobond maturing in October 2025 — the largest single debt maturity in its history. Shafudah noted that the government plans to repay $625 million at maturity from a sinking fund it has been gradually building up, while seeking to refinance the remaining $125 million through the domestic market.
