2025: A year of challenges and resilience

Namibia experienced moderate economic growth in 2025, gross domestic product (GDP) growth slowed to 3% 3.5% (vs 3.7% in 2024), GDP per capita dipped slightly, unemployment remained at 37%, Gini at 0.59, inflation stable at 3.6 to 4.0%, debt slightly above 60% of GDP, limiting fiscal stimulus and reinforcing a restrained growth environment. Namibia’s Gini coefficient hasremained persistently high, signaling deep income inequality, despite domestic policy to address historical injustice in different sector of economies. Historically, Namibia Gini coefficient has been around 0.59–0.60, among the highest globally. Bostwana and South Africa stood at 0.50 and 0.63 respectively. The Southern African Development Community's (SADC’s) Gini average around 0.56, driven by extreme disparities. In terms of GDP contribution, as of 2025, Primary sector (agriculture, mining, fishing) accounts for 20.6%, Secondary sector (manufacturing, construction, utilities) accounts for 15.9%, and Tertiary sector (services) dominates at 63.5%, slightly different from the previous year.The repo rate ended 2025 at 6.5%. The prime lending settled around 10.125% to 10.25% after BoN directed banks to narrow the prime–repo spread by 25 basis points in two steps.Inflation is projected to be between 3.8 to 4-4% in 2026, Real GDP growth is now projected to be around 3.8 % in 2026 and 4.3% in 2027.Namibia ranked 68th of 69 economies in the 2025 IMD World Competitiveness Index, reflecting structural challenges despite stable growth. GDP reached US$13.4 billion, percapital, US$11,843, with 3.7% growth and 4.24% inflation. Strengths included price stability (8th) and tax policy (21st), but weaknesses persisted in employment (69th),domestic economy (68th), infrastructure (65th), and technology (67th–69th). The report cites high unemployment, inequality, and limited diversification, urging reforms in infrastructure,labor markets, and economic diversification to improve competitiveness.Moody’s maintained its B1 rating with a Positive outlook as of September 2025, up from a B1 with Stable outlook in April 2024—reflecting improved growth and fiscal projections.Namibia’s Medium-Term Expenditure Framework maintained a total budget of N$89.4 billion for FY2025/26, reallocating funds toward education, health, social safetynets, and infrastructure. Development spending was cut by 13% to N$11.1 billion, yet supported aggregate demand and improved liquidity, boosting Q4 growth and credit uptake.Namibia’s 2026 outlook shows moderate investor confidence, supported by fiscal discipline and Foreign direct investment in mining, infrastructure, and green energy. Growth will focus on uranium, construction, agriculture rebound, tourism or hospitality sector, and emerging hydrogen projects. Namibia’s Green Hydrogen Commissioner resigned in November 2025, citing lack of political support. Government remains committed, analysts warn that there is politically momentum, creating some uncertainty and impacting investors’ confidence unless leadership is restored. The political environment remains stable, although risks persist from high inequality, unemployment, and Southern African Customs Unio dependence.*Ruben Haimbili is the manager of bancassurance, agency and sales at a state-owned enterprise. The views do not represent those of his employer.**

2025: A year of challenges and resilience

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Namibian Sun 2026-01-13

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2025: A year of challenges and resilience

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Namibian Sun 2026-01-13

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