CHAMWE KAIRA
The Bank of Namibia has maintained its growth projections at 2.6% for 2026 and 2.9% for 2027, supported by expected gains in uranium mining, wholesale and retail trade, financial services, and public administration and defence.
However, the central bank has warned that domestic economic activity weakened in the first four months of 2026, particularly in mining, manufacturing, tourism, electricity generation, construction, and communications.
According to data cited by the Bank of Namibia, Namibia’s merchandise trade deficit widened to N$11.723 billion in the first four months of 2026, compared to N$11.267 billion over the same period in 2025, reflecting a 4% deterioration.
This occurred despite an 8.5% increase in export receipts to N$31.75 billion, driven by stronger performance in uranium, gold, fish, and manufactured products.
Uranium exports rose by 7.5% to N$7.24 billion, while gold increased by 14.5% to N$6.48 billion. Fish exports climbed 11.9% to N$5.93 billion.
However, diamond exports declined by 11.6% to N$2.28 billion, and other mineral products fell by 6.9% to N$1.476 billion.
Imports also increased by 7.3% to N$43.48 billion, driven by higher payments for machinery and mechanical appliances (+14.1%), vehicles, aircraft and vessels (+7.9%), mineral fuels (+5.1%), and base metals (+13.6%).
Imports of precious or semi-precious stones surged by 1,177.8% to N$437 million.
The bank noted that higher import demand for machinery, fuels, vehicles, and electricity was a key factor behind the widening deficit.
Headline inflation rose to 4.1% in May, up from 2.1% in March, mainly due to higher transport costs. Inflation is projected to average 4% in 2026 before easing to 3.6% in 2027.
The bank attributed the near-term inflation outlook to higher global oil prices and domestic cost pressures.
Foreign reserves increased to N$55.4 billion at the end of May 2026, equivalent to 3.5 months of import cover. The central bank said this level remains adequate to support the currency peg and external stability.
The Monetary Policy Committee increased the repo rate to 6.75%, which translates into a prime lending rate of 10.25%. The move is intended to mitigate inflation risks while preserving macroeconomic stability.
It noted, however, that the decision was taken in light of sluggish credit growth and subdued domestic demand.
“The committee was mindful of the subdued domestic economic activity and sluggish credit extension to the private sector,” the bank said.
