CHAMWE KAIRA
The country’s gross domestic product rose from N$155 billion to N$157.4 billion in 2024, marking a 3.7% year-on-year increase.
The result was slightly above Rand Merchant Bank’s (RMB) forecast of 3.5% for the fourth quarter.
RMB, a division of FirstRand Bank Limited, said Namibia’s real GDP growth reached 3.7% by the end of 2024, higher than the 2.9% recorded in the third quarter.
The growth was driven by better performance in the secondary sector due to higher manufacturing output and stronger demand for storage.
The country’s economy exceeded expectations in 2024, with the Namibia Statistics Agency’s (NSA) annual national accounts revealing a stronger-than-expected GDP growth rate of 3.7% year over year.
This positive surprise was largely driven by a stronger performance in the secondary and tertiary sectors, although it was partially offset by a notable slowdown in the primary industry.
RMB said going forward, the mining sector is expected to remain the main engine of domestic growth, driven by increased uranium, gold, and other metal production in 2025, which should offset the persistent decline expected in diamond production.
“We also expect the resumption of oil and gas activities in 2025, which were halted temporarily from 3Q24, to further support the rebound in the primary sector,” the firm said.
The firm said growth trends in the manufacturing industry suggest a broad-based industrial recovery, signalling renewed activity in capital-intensive projects.
It went on to say that growth in the tertiary industry suggests that while services are expanding, domestic household capacity to demand them remains constrained.
It added that expenditure indicators point to increased consumption and foreign support.
External capital inflows supported the economy in the fourth quarter as capital transfers received from abroad increased by 19.9% year on year to N$3 billion in 2024, from N$2.5 billion in 2023.
While capital transfers payable also rose slightly (from N$39 million to N$50 million), net capital inflows remain substantial.
These dynamics reaffirm the growing role of foreign capital in funding investment and stimulating economic activity.
The firm has maintained its GDP forecasts at 3.5% for 2025 and 4.8% for 2026, respectively.
However, it said that while real GDP growth remains promising, given the stronger-than-expected performance in the secondary sector, particularly construction and manufacturing, it is increasingly driven by foreign spending, as domestic private consumption shows signs of weakening.
This foreign expenditure is primarily fuelled by rising investment interest in Namibia, particularly in the emerging oil and gas sectors— a positive indicator, considering the capital-intensive nature of these industries.
“At the same time, the declining contribution from households suggests a fragile recovery in domestic demand.”
Furthermore, RMB said the outlook for the primary sector remains mixed.
The firm said the outlook for the primary sector is mixed. Agricultural output will depend on the May harvest.
However, ongoing mining exploration, a strong gold market, and a possible rebound in uranium production are expected to support mining activity in 2025 and 2026, even as diamond output continues to fall.
