Economic growth forecast slashed – Shafudah

Namibia has cut its 2026 economic growth forecast from 3.1% to about 2.1%, with finance minister Ericah Shafudah acknowledging that the economy is not performing as expected.The one-percentage-point reduction comes as the diamond industry continues to struggle while gold production at B2Gold's Otjikoto mine is expected to fall sharply following the end of open-pit mining last year.Shafudah disclosed the revised outlook in the National Assembly while responding to an urgent question on the state of the economy and concerns raised in the International Monetary Fund's (IMF) 2026 Article IV consultation.She acknowledged that economic performance had fallen short of government's projections, particularly in mining, which was expected to contribute more to growth this year.“We are projecting a growth of 3.1%. As we are talking now, we are projecting the economy to be around 2.1% because of all these sectors that I'm elaborating,” Shafudah said.The original budget forecast anticipated economic growth of 3.1% in 2026 after the economy slowed to 1.7% in 2025.Shafudah said government had not anticipated the extent of the difficulties facing the diamond mining industry when it prepared its economic projections.“We didn't know that the diamond mining sector was going to be as [bad] as it is currently,” she said, adding that the sector was expected to contribute significantly to growth.Namibia's diamond industry has been battling weak global demand and growing competition from laboratory-grown diamonds, factors that have weighed on production and government revenue.Forecasts revised downGovernment's latest revision follows earlier warnings from the IMF and Bank of Namibia that economic growth would be considerably weaker than originally anticipated.The Bank of Namibia initially lowered its 2026 growth forecast to 2.6%, citing weaker primary industries, including metal ores and diamonds. It subsequently reduced the forecast further to 2.1% as the contraction in diamond mining proved deeper than expected.The IMF had also projected growth of 2.1% for 2026 in its Article IV assessment, citing continued weak diamond production, declining gold output, higher fuel prices and weaker global demand.Gold output fallsGold production has added another setback.Shafudah referred specifically to B2Gold's Otjikoto mine, saying government had anticipated stronger gold output when preparing its growth projections.“As we were projecting for the growth of this year, [we were] also anticipating that the output from the gold was also going to be high,” she said.B2Gold produced 199 139 ounces of gold at Otjikoto in 2025 before completing open-pit mining during the year.The company initially forecast production of between 70 000 and 90 000 ounces for 2026, but subsequently raised its guidance to between 80 000 and 100 000 ounces following stronger-than-expected production during the first half of the year.Even at the upper end of the revised range, Otjikoto's production would be roughly half the 199 139 ounces produced in 2025.Production this year is coming from the Wolfshag underground mine and existing low-grade stockpiles. Underground mining at Wolfshag is expected to continue into 2027, while B2Gold develops the Antelope underground project to extend Otjikoto's operating life.Despite the weaker mining outlook, Shafudah said government still expected other sectors to support economic activity, singling out improved agricultural crop production.“So I just wanted to agree with you that the economy is not performing as we have projected,” Shafudah said.

Economic growth forecast slashed – Shafudah

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Namibian Sun 2026-10-05

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Economic growth forecast slashed – Shafudah

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Namibian Sun 2026-10-05

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