CHAMWE KAIRA
Heightened trade tensions between the US and China, exacerbated by the Trump presidency, present significant risks to Namibia, whose economy is closely tied to its two largest trading partners, China and South Africa.
Namibia’s reliance on these economies for trade, investment, and macroeconomic stability creates vulnerabilities to global disruptions.
Namibia exports key commodities such as uranium, diamonds, and gold to China, and any slowdown in Chinese export momentum due to US tariffs could dampen demand for these materials.
This would likely lead to reduced export revenues and increased commodity price volatility, according to a report by Simonis Storm Securities.
The report said while gold prices have reached historic highs (US$2790 per ounce), persistent global trade uncertainties could destabilise markets, further affecting Namibia’s earnings.
South Africa, Namibia’s largest trading partner, faces parallel challenges due to its reliance on Chinese demand for precious metals and other goods, the report said.
It said that, although South Africa’s trade surplus expanded in October, its exposure to weaker Chinese demand could have indirect consequences for Namibia.
Furthermore, higher import costs from South Africa could exacerbate Namibia’s inflation, which is already under pressure from global food and fuel prices.
“Given Namibia’s dependence on South Africa for the majority of its imports, including petroleum products, rising global oil prices or logistical inefficiencies in South Africa would amplify inflationary pressures domestically.”
Additionally, a slowdown in China’s economy could reduce foreign direct investment (FDI) in Namibia, particularly for critical infrastructure projects, further constraining export competitiveness, Simonis said.
“Namibia’s existing logistical inefficiencies and infrastructure deficits limit its ability to diversify trade or benefit from shifts in global supply chains. These structural challenges, if unaddressed, may hinder the country’s capacity to mitigate external shocks,” the report added.
In terms of policy recommendations, Simonis Storm said to navigate these challenges, Namibia must adopt proactive measures aimed at strengthening economic resilience.
These measures must include investment in infrastructure, particularly to address logistical bottlenecks, which is essential.
It further suggested that policymakers should prioritise stabilising inflation and developing new trade partnerships to reduce over-reliance on traditional markets.
“These efforts will be critical in safeguarding Namibia’s economic stability amid uncertainties stemming from the US-China trade war and its broader implications for global trade dynamics.”
