Namibia

Economic Outlook

The services sector plays a significant role in the growth and development of the Namibian economy, contributing 58.9% of GDP followed by industry and agriculture, contributing 30.4% and 10.7 % of GDP respectively. Namibia is also dependent on trade for its economic growth with trade in goods and services contributing about 84% to GDP in 2017. The country experienced sluggish growth of 0.2% in 2016 slightly recovering to 0.8% in 2017 and is expected to grow by 2.6% in 2018 owing to anticipated recovery in mining and agriculture. For example, the country is anticipating a boost in uranium mining as new mines realise full production capacity.

As of the end of 2016, Namibia’s public debt was 41% of GDP, above the government’s limit of 25%, forcing the government to embark on fiscal consolidation measures, which helped reduce the budget deficit from 6.3% in 2016 to 3.6% in 2017. The reduced public spending eased inflationary pressures contributed to inflation declining from 6.7 in 2016 to 6.5% in 2017. Namibia experienced a drop in the growth of credit to the private sector to 7.3% at the end of 2017 from 11.7% in 2016.

Potential Opportunities

The Namibian economy faces the primary risk of over-reliance on the extractive sector, mainly due to the fluctuations in the global demand for commodities and prices.

With a population of 2.34 million in 2017 that is expected to grow to 2.38 million in 2019, a GDP of US$12.56 billion in 2017, which is expected to increase to about US$14.02 billion in 2019 and a GDP per capita income of US$5,358 in 2017, projected to decrease to US$5,618 in 2019, Namibia provides a growing market for exporters and investors. The country also holds opportunities for export diversification to SADC, SACU, COMESA, Africa, the UK and the US market under the Africa Growth Opportunity Act (AGOA).

Although Namibia ‘s volume of imports of goods and services is expected to decrease from 4.95% in 2017 to 3.77% in 2019, its volume of exports of goods is expected to grow from 0.23% in 2017 up to about 2.07% in 2019, demonstrating the potential for export expansion.