Economy expected to slow down

Facing several global risks
Risks to Namibia's economy include global monetary policy tightening and high import costs of key commodities such as fuel, wheat and cooking oil, the Bank of Namibia says.
Jo-Maré Duddy
Namibia's economic growth is expected to decelerate in 2023 and 2024, largely due to weaker global demand.

The International Monetary Fund (IMF) forecast economic growth of 2.8% for Namibia in its latest World Economic Outlook, released in April. The IMF’s projection is lower than finance minister Iipumbu Shiimi’s 3.2% which he mentioned in his budget speech at the end of February, as well as the Bank of Namibia’s (BoN) 3.0% in its Economic Outlook Update in March.

According to the Namibia Statistic Agency (NSA), Namibia’s economy grew by 4.6% in 2022.

Going forward growth is expected to moderate further to 2.9% in 2024, according to the BoN.

There are several risks to domestic growth, including global monetary policy tightening and high import costs of key commodities such as fuel, wheat, and cooking oil, which are expected to remain high during the forecast period, the BoN said.

The ongoing conflict between Russia and Ukraine is expected to prolong the high prices for affected commodities, while water supply interruptions, potential electricity cuts spillover from South Africa, and uncertainty around the impact of climate change on the economy are also contributing factors.


In 2023, primary industries are expected to experience solid growth, although at a slower pace than in 2022, according to the central bank.

Projections indicate a growth rate of 5.2% in 2023 and 2.8% in 2024, compared to the robust 12.9% growth achieved in 2022.

The mining sector, particularly the diamond subsector, is expected to be a key driver of growth in 2023, although at a lower rate than in the previous year. Ongoing oil exploration and appraisal activities are also expected to contribute to mining growth from 2023 onward.

The diamond mining industry experienced significant growth in 2022, mainly due to high production from the Benguela Gem mining vessel. However, growth is expected to slow down moving forward.

Projections indicate a growth rate of 8.2% in 2023 and 1.3% in 2024 for the diamond mining sector. This follows a growth rate of 45.1% in 2022, which was largely supported by the deployment of the Benguela Gem mining vessel from the second quarter of that year.

Uranium, ores

After experiencing a contraction in 2022, the uranium mining industry is expected to return to growth in 2023. BoN projections indicate a growth rate of 4.5% in 2023 and 4.3% in 2024 for the uranium mining sector, an improvement from the contraction of 2.5% observed in 2022.

The uranium sector is still facing challenges caused by water supply interruptions, which have resulted in mines frequently reducing their production targets in the past. Additionally, the occasional presence of high sulphur content in the sea has forced a halt in the production of desalinated water, further exacerbating the problem of water supply interruptions, the BoN said.

After experiencing meagre growth in 2022, the metal ores sub-sector is projected to expand in 2023 and remain robust in 2024.

Projections indicate a growth rate of 5.3% in 2023 and 5.4% in 2024 for the metal ores sector, recovering from 0.5% in 2022. This recovery is expected to be driven by an anticipated increase in gold production from the two mines currently in operation.


The BoN expects a gradual improvement in the growth of secondary industries in 2023 and 2024, supported by better growth for manufacturing, electricity, and water.

Projections indicate a growth rate of 3.2% in 2023 and 3.7% in 2024 for the secondary industries, compared to 3.3% in 2022.

This improvement is anticipated to result from improved growth rates in manufacturing, as well as the electricity and water sector, with the construction sector experiencing a lower contraction, according to the BoN.

Projections indicate that the manufacturing sector will experience widespread improvements in growth during 2023 and 2024.

The sector is expected to grow by 3.2% in 2023 and 3.9% in 2024, driven by higher growth rates in diamond processing, non-metallic minerals products, and textile and wearing apparel.

Wholesale and retail

Throughout the entire forecast period, growth for tertiary industries is expected to remain low.

The BoN projected the tertiary sector to grow by 2.1% in 2023 and 2.6% in 2024, which is a downward moderation from the 2.2% in 2022.

In 2022, major tertiary sectors such as hotels and restaurants, transport and storage, as well as financial services supported growth as they continued to recover from the impact of Covid-19. However, they are now expected to return to a moderate growth trajectory, the BoN said.

Similarly, the information and communication sector registered robust growth rates between 2019 and 2021, but it is now expected to stabilise at low growth rates.

The wholesale and retail trade sector is expected to experience a slowdown in growth in 2023 due to the negative impact of high inflation and interest rates on both businesses and consumers. However, in 2024, the sector is expected to perform better due to increased construction activity related to oil mining and green hydrogen projects.

The wholesale and retail trade sector is projected to grow by 2.4% and 5.6% in 2023 and 2024, respectively. This represents a deceleration from the 6.0% growth in 2022.


The hotels and restaurants industry is anticipated to sustain its growth momentum in 2023 and 2024, aided by an expected rise in both domestic and foreign tourism.

According to the BoN, the sector is expected to expand by 4.2% and 6.5% in 2023 and 2024, respectively, compared to the 6.2% growth in 2022.

The growth is mainly attributed to activities associated with regional and international visitors. The industry is predicted to continue growing, supported by the gradual recovery of the travel sector, which is still below pre-pandemic levels.

The projected growth is due to the lifting of all travel restrictions, an increase in the number of airlines operating in Namibia, and the rise in international arrivals observed in the last quarter of 2022, which the BoN expects to persist.

“Overall, the domestic economic growth is expected to slow down in line with weaker global demand, but most sectors are to remain in a growth territory,” the BoN said.