CHAMWE KAIRA
Namibia’s current account deficit narrowed during the first quarter of 2026 as lower services payments and reduced net investment income outflows strengthened the country’s external position, even as the economy recorded faster growth and inflation remained relatively subdued.
According to the Bank of Namibia, the current account deficit narrowed to N$9.9 billion during the first quarter of 2026, down from N$10.6 billion in the preceding quarter and N$13.4 billion in the corresponding quarter of 2025.
The improvement was mainly attributed to lower services payments and reduced net investment income outflows.
As a share of quarterly gross domestic product (GDP), the current account deficit improved to 14%, compared to 14.8% in the previous quarter and 20.3% in the first quarter of 2025.
Meanwhile, Namibia’s stock of international reserves increased marginally by 0.4% on a quarterly basis to N$51.8 billion at the end of March 2026, supported mainly by Customer Foreign Currency placements by commercial banks.
The reserve level translated into an estimated import cover of 3.2 months.
By the end of May 2026, international reserves had risen further to N$55.4 billion, driven largely by Southern African Customs Union (SACU) receipts, revaluation gains and the monetisation of gold.
The increase improved import cover to an estimated 3.5 months.
The central bank said Namibia’s external balance sheet remained in a net asset position at the end of March 2026.
Although the position weakened compared to the previous quarter, the country’s external position continued to demonstrate resilience.
However, the Real Effective Exchange Rate appreciated by 3.8% year-on-year, suggesting a relative decline in the international competitiveness of Namibian products.
The external sector developments came as the domestic economy continued its recovery during the first quarter of 2026.
The Bank said Namibia recorded its eighteenth consecutive quarter of positive economic growth since the second quarter of 2021.
In nominal terms, the economy was valued at N$70.9 billion, up from N$66.2 billion during the corresponding quarter of 2025.
Real economic growth accelerated to 2% from 0.1% in the final quarter of 2025.
Growth was largely driven by the tertiary industries, particularly wholesale and retail trade, financial services, health, education and public administration.
Agriculture also recorded strong growth following favourable rainfall, while the fishing sector expanded.
Mining activity, however, weakened during the quarter. The secondary sector remained subdued as contractions in manufacturing offset gains in construction and electricity generation.
On the demand side, government consumption continued to support economic activity, while investment recovered due to increased spending on machinery, transport equipment and construction. Although exports increased, imports grew at a faster pace, resulting in a wider trade deficit.
On the fiscal front, total central government debt rose to N$178.4 billion at the end of March 2026, representing annual growth of 7%, mainly due to increased issuance of Treasury Bills and Internal Registered Stock.
Government debt amounted to 65% of GDP at the end of March 2026, slightly higher than a year earlier and remaining above the Southern African Development Community benchmark of 60%of GDP.
Central government loan guarantees declined by 19% year-on-year to N$7 billion, reflecting repayments of guaranteed domestic loans by state-owned enterprises in the energy, transport and agriculture sectors.
At 2.6% of GDP, loan guarantees remained well below the government’s ceiling of 10%, indicating relatively low contingent liability risks.
