CHAMWE KAIRA
Namibia’s electricity and water subsector is expected to remain a key contributor to secondary industry growth in 2026, although its growth rate is projected to slow significantly from the strong performance recorded last year, according to the Bank of Namibia’s August 2026 Economic Outlook.
The subsector grew by 12.6% in 2025 but is projected to expand by 4.9% in 2026 before moderating further to 3.5% in 2027.
The central bank attributed the slowing growth trajectory partly to the anticipated impact of El Niño. Despite the moderation, the subsector is expected to remain resilient, supported by hydroelectric generation from existing power stations and increasing contributions from solar power projects.
According to the outlook, the growing contribution of solar generation is expected to reduce Namibia’s reliance on electricity imports over the medium term.
Construction activity is also expected to moderate substantially in 2026 following exceptionally strong growth in 2025.
The construction sector expanded by 20.2% in 2025 but is now projected to grow by 6.5% in 2026, representing a downward revision of 3 percentage points from the Bank of Namibia’s March 2026 Economic Outlook. Growth is expected to improve to 7.8% in 2027.
The downgrade for 2026 follows weaker-than-expected performance during the first quarter, when construction activity grew by only 1.8%.
The bank said construction growth would nevertheless remain supported by continued activity in mining-related developments, including underground expansion projects and new mine construction, as well as government-funded infrastructure projects.
Meanwhile, manufacturing is expected to remain in mild contraction during 2026 before returning to growth in 2027.
The sector contracted by 2.9% in 2025 and is projected to contract by a further 0.8% in 2026 before growing by 1.7% in 2027.
The continued weakness in manufacturing is largely attributed to the near-total halt in basic non-ferrous metals processing while the industry awaits confirmation of new processing capacity.
Diamond processing is also expected to remain subdued in line with lower output from the mining sector.
These pressures are expected to be partly offset by increased meat-processing activity as farmers continue to market livestock that cannot be sustained during the ongoing drought recovery.
However, the bank expects meat-processing growth to moderate from 2027 as farmers begin rebuilding livestock herds.
Overall, the outlook points to continued growth in Namibia’s secondary industries, although performance is expected to vary across subsectors, with construction and electricity and water moderating from elevated growth rates while manufacturing gradually recovers from its current contraction.
