Informal sector drives Namibia’s economy, report shows

Namibia’s informal economy contributes more than a quarter of the country’s gross domestic product (GDP) and employs nearly 60% of its workforce, according to Michael Humavindu, executive director in the Ministry of Finance and Public Enterprises.Speaking at the launch of the Diagnostic Report on Informality in Windhoek yesterday, Humavindu described the sector as a “pillar of national life” that must be recognised and supported as a central component of Namibia’s development agenda.He said that the informal economy accounted for 24.7% of GDP in 2023 and has since grown to 26.5% this year, representing roughly N$49 billion at purchasing power parity (PPP) levels. The figures, he explained, were drawn from the Cabinet-approved National Informal Sector, Start-ups and Entrepreneurship Policy (NISEP) 2024 and the Bank of Namibia, providing the most accurate national baseline to date.“The data tells an undeniable story,” Humavindu said. “This sector is not a side economy; it is the engine room of our national life. Nearly 58% of Namibians are employed in the informal economy, yet it remains largely unprotected and under-recognised.”He stressed that the Diagnostic Report on Informality must not become another shelved document but a “roadmap for reform”.“Namibia cannot transition to shared prosperity while half its workforce transitions daily between survival and subsistence,” he cautioned. “The informal economy does not need our sympathy - it needs policy, reform and respect.”The report, produced jointly by the Bank of Namibia, United Nations agencies, and research institutions such as Genesis Analytics and Synergy Business Advisory, presents the most comprehensive picture yet of Namibia’s informal sector. It highlights persistent barriers such as limited access to finance, inadequate trading spaces, weak policy coordination and the exclusion of informal workers from social protection systems.Enabling conditionsHumavindu linked the findings to NISEP, which was approved by Cabinet in 2024 and sets the legislative and institutional framework for formalising and strengthening the informal economy. The policy aims to create enabling conditions for small enterprises, promote access to credit and ensure informal workers are included in national economic planning.Highlighting the broader social and global context, UN Resident Coordinator in Namibia, Hopolang Phororo, emphasised that the findings place informality at the core of Namibia’s economy and society.“Informality is not a marginal phenomenon; it is central to our economic and social fabric,” Phororo said. “Nearly six in ten workers, and over 85% in sectors like agriculture, fishing and food services, operate outside the formal system. Women and youth are particularly represented, with women constituting 53% of the informal workforce.”She stressed that the report is not just a technical product but “a compass” aligning Namibia’s national ambitions with global goals such as SDG 8 on decent work and economic growth, and SDG 1 on ending poverty.“Imagine what could be achieved if the resilience and ingenuity of informal workers were matched with enabling policies, protections and pathways to formality,” she said. “This diagnostic gives us the evidence. Now it’s time for coordinated action.”Data and directionHer remarks built on those of Bank of Namibia Deputy Governor, Ebson Uanguta, who said the report provides not only data but direction.“This is more than a report; it’s a roadmap,” Uanguta said. “It illuminates how we can build better financial services, infrastructure and regulatory systems that recognise and empower the informal economy. We can no longer afford to play in the dark.”The Diagnostic Report on Informality in Namibia marks the culmination of a two-year collaborative process between government, regulators, researchers and representatives of the informal economy. It is expected to guide the implementation of NISEP and other reforms aimed at bridging the gap between formal and informal enterprise.

Informal sector drives Namibia’s economy, report shows

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Namibian Sun 2025-12-31

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Informal sector drives Namibia’s economy, report shows

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Namibian Sun 2025-12-31

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