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Namibia’s economic expansion is set to slow in 2025, with real gross domestic product projected to ease to 3.0%, down from an estimated 3.7% in 2024, according to the Bank of Namibia’s December 2025 Economic Outlook Update. The bank attributed the weaker outlook to subdued performance across several key sectors, led by a contraction in manufacturing and ongoing softness in primary industries. Drought-related losses in agriculture and declining diamond output remain major drags on growth, while persistent drought conditions and weak global demand further weigh on the economy.
The manufacturing sector is expected to shrink by 4.6% in 2025, reversing the 2.8% growth recorded in 2024. The downturn is largely driven by steep declines in basic non-ferrous metals, meat processing, and diamond processing. Basic non-ferrous metals are projected to fall by 58.5%, reflecting lower copper processing volumes and muted international demand. Meat processing is expected to contract by 26.5% as farmers rebuild herds following significant destocking during the 2024 drought.
Primary industries are also under pressure. Agriculture, forestry and fishing are projected to shrink by 4.2% in 2025, following a 2.7% contraction in 2024. Livestock farming is expected to decline sharply by 22.5% due to depleted herd sizes and limited feed availability, while fishing is forecast to contract by 4.7% as catch volumes remain low. Despite the short-term challenges, the Bank of Namibia expects a gradual recovery in the medium term, with growth forecast at 3.8% in 2026 and 4.3% in 2027. Improvements are expected to be supported by better rainfall, stronger performance in construction and electricity generation, and higher uranium output. “Growth is projected to recover to 3.8% in 2026 and further to 4.3% in 2027, supported by improvements in agriculture, construction, electricity generation and uranium mining,” the bank noted.
Tertiary industries are expected to remain resilient, with overall growth of 4.5% projected for 2025. Wholesale and retail trade is forecast to expand by 6.2%, supported by activity in construction, mining supply chains, and oil and gas appraisal work. Transport and storage is expected to grow by 4.2%, public administration by 3.7%, and the health sector by 5.6%. However, the bank cautioned that significant downside risks remain. Declining diamond export earnings, rising global protectionism, and inflationary pressures linked to geopolitical conflicts could dampen demand for Namibia’s exports. Falling Southern African Customs Union and diamond revenues may also heighten debt sustainability risks, potentially necessitating fiscal tightening.
