Namibia Final 2024

COUNTRY FOCUS REPORT 2024
NAMIBIA
Driving Namibia’s Transformation
The Reform of the Global Financial Architecture
COUNTRY FOCUS REPORT 2024
NAMIBIA
Driving Namibia’s Transformation
The Reform of the Global Financial Architecture
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2
ACKNOWLEDGEMENTS
T
he 2024 Country Focus Report for Namibia was prepared in the Chief Economist and
Vice-Presidency for Economic Governance and Knowledge Management Complex, under
the direction and supervision of Prof. Kevin C. Urama, Chief Economist and Vice-Presi-
dent, with support from Amadou Boly, (Chief Assistant to the Chief Economist) and Amah
Marie-Aude Ezanin Koffi (Executive Assistant).
The preparation of this report was led by Désiré Vencatachellum, Senior Director, Country
Economics Department, with Marcellin Ndong Ntah (Lead Economist, ECCE) as the project
management Lead, IT support from Abir Bdioui, and administrative support from Tricia Effe
Baidoo (Team Assistant, ECCE). Namibia CFR was prepared by Suwareh Darbo), Principal
Country Economist, under the guidance of George Kararach, Lead Economist for RDGS.
The team thanks (i) the Namibia Country Team led by Leila Mokadem, Director General, (RDGS),
and Kennedy Mbekeane, Deputy Director General and Country Manager RDGS for Lesotho); (ii)
the Macroeconomics Policy, Forecasting and Research led by Abdoulaye Coulibaly, Director,
Officer-in-Charge; (iii) the Transition States Department led by Yero Baldeh, Director, (iv) the
African Natural Resource Center led by Désiré Vencatachellum, Director, Officer-in-Charge; and
(v) the Macroeconomics Policy and Debt Sustainability Division and Microeconomic and Institu-
tional Impact Assessment Division led by Anthony Simpasa, Division Manager, for their contribu-
tions.
The data in the report was compiled by the Department of Statistics led by Babatunde Samson
Omotosho, Director, with significant contributions from Louis Kouakou (Manager of Socio-Eco-
nomic Statistics Division, Department of Statistics), Ben Paul Mungyereza (Head of the Statistical
Capacity Building Division, Statistics Department), Anouar Chaouch (Senior Statistician, Division
1 of the Statistics Department) and Momar Kouta (Senior Statistical Information Systems Officer,
Division 1 of the Statistics Department).
Peer-review comments were received from Kelvin Banda, Principal Country Economist,
ECCE/RDGS and Ms. Marealle Maria Saguti, Chief Land Officer, ECNR
Dr Joseph Atta-Mensah, Senior Fellow from Africa Centre for Economic Transformation, acted
an external reviewer.
The cover of the report is based on a general design by Laetitia Yattien- Amiguet and Justin
Kabasele of the Bank’s External Relations and Communications. Copy-editing was done by the
Bank's Language Services Department (TCLS) and layout was done by Creable Media.
COUNTRY FOCUS REPORT 2024 - NAMIBIA 3

TABLE OF CONTENTS
ACKNOWLEDGEMENTS 3
EXECUTIVE SUMMARY 7
INTRODUCTION 9
CHAPTER 1 : MACROECONOMIC PERFORMANCE AND OUTLOOK 11

1.1 Introduction 12
1.2 Growth performance 12
1.3 Other recent macroeconomic and social developments 12
1.3.1 Monetary policy – Inflation – Exchange rate 12
1.3.2 Fiscal Policy – public debt 13
1.3.3 External position – external financial flows 13
1.3.4 Social developments 14
1.4 Macroeconomic outlook and risks 14
1.4.1 Outlook 14
1.4.2 Risks 14
1.5 Conclusion and recommendations 15
CHAPTER 2 : TAKING STOCK OF NAMIBIA’S STRUCTURAL TRANSFORMATION PROGRESS 17

2.1 Introduction 18
2.2 Taking stock of economic performance and transformation in Namibia 18
2.3 Namibia’s structural transformation: Drivers, bottlenecks, opportunities 19
2.3.1 Namibia’s structural/economic transformation 19
2.3.2 Unpacking Namibia’s structural transformation through labor productivity decomposition 20
2.3.3 Rapid growth in income and jobs embodied in services export: New evidence 20
2.3.4 Drivers to accelerate structural transformation 23
2.3.5 Key bottlenecks to fast-paced structural transformation 24
2.4 Finance to fast-track Namibia’s structural transformation: Financing gap and the country’s 25
commitment to structural change
2.4.1 Structural change strategy in the National Development Plan 25
2.4.2 Financing needs and financing gap 25
2.4.3 Closing the financing gap through domestic resource mobilization 26
2.4.4 Domestic resource mobilization for structural transformation 28
4
2.5 Conclusions and policy recommendations 29
2.5.1 The role of the Government 29

2.5.2 The role of the private sector 30
2.5.3 The role of regional institutions 30
2.5.4 The role of development financial institutions (DFIs) and multilateral development 30
banks (MDBs)
CHAPTER 3 : FINANCING STRUCTURAL TRANSFORMATION IN NAMIBIA: 34

THE NEED FOR REFORM OF THE INTERNATIONAL FINANCIAL ARCHITECTURE
3.1 Introduction 35
3.2 Namibia’s stand on the need to reform the international financial architecture 35
3.4. Dealing with Namibia’s debt 36
3.5 Financing climate action 37
3.6 Conclusions and recommendations 38
LIST OF FIGURES
Figure 2.1: Real GDP Growth 18
Figure 2.2: Real GDP per capita growth 19
Figure 2.3: Relative factor productivity and employment shares (%) in 2018 20
Figure 2.4: Sectoral Employment Shares 2011-2021 20
Figure 2.5: Exports Value Added % of GDP 22
Figure 2.6: Financing needs and gaps 26
Figure 2.7: The required increase in tax/GDP ratio to close the estimated annual financing gap in 27
Namibia in 2030 and 2063
LIST OF TABLES
Table 1.1 - Macroeconomic Indicators 14
LIST OF BOXES
Box 1.1: Impact of tighter international financial conditions 22
Box 2:1: Learning from successful experiences in supporting growth and structural 24
development.
Box 2.2: Potential and existing opportunities in Namibia 24
Box 2.3: Bank support for Namibia’s structural transformation 27

LIST OF ACRONYMS
AND ABBREVIATIONS
ADB African Development Bank
ADF African Development Fund
AGOA African Growth and Opportunity Act
AFOLU Agriculture, Forestry and other Land Uses
BIPB Business and Intellectual Property Bill
CFR Country Focus Report
DFI Development Finance institutions
DRM Domestic Resource Mobilization
EIF Environmental Investment Fund
EMDE Emerging Market Developing Economies
FDI Foreign Direct Investment
GCF Green Climate fund
GDP Gross Domestic Product
GHG Green Houne Gas
GII Global Innovation Index
GIPF Government Institutions Pension Fund
GRN Government of the Republic of Namibia
HIV/AIDS Human Immune Virus/ Acquired Immune Deficiency Syndrome
ICT Information and Communication Technology
IFMIS Integrated Financial Management and Information System
IIAG Ibrahim Index for African Governance
IMF International Monetary Fund
LGBT Lesbian, Gay, Bi-sexual and Transgender
MAC-DSA Debt Sustainability Market Access Countries
MDBs Multilateral Development Banks
MET Ministry of Environment and Tourism
MPC Monetary Policy Committee
MSMEs Micro, Small and Medium Scale Enterprises
MTEF Medium term Expenditure framework
MPC Monetary Policy Committee
NAD Namibian Dollar
NDC Nationally Determined Contributions
NDP National Development Plan
ODA Official a Development Assistance
PEFA Public Expenditure and financial Accountability
PFM Public Finance Management
PPP Public Private Partnership
SACU Southern African Customs Union
SADC Southern African Development Community
SDGs Sustainable Development Goals
SDRs Special Drawing Rights
SMEs Small and Medium Scale enterprises
SSA Sub-Saharan Africa
TAF Technical Assistance Fund
TIPEEG Target Intervention Program for Employment and Economic Growth
UMIC Upper Middle iNcome Country
UNCTAD United Nations Conference and Trade and Development
UNFCCC United Nations Framework Convention for Climate Change
UNFPA United Nations Population Fund
6 US United States COUNTRY FOCUS REPORT 2024 NAMIBIA
EXECUTIVE SUMMARY
Chapter 1 of this Country Focus Report for Namibia gives an overview of macroeconomic developments
since 2022, covering growth, monetary, and fiscal policies, public debt, outlook and risks, as well as social
developments. The Namibian economy grew by an estimated 4.2% in 2023, down from 5.3% in 2022, due
to weak global demand for diamonds and 18% contraction in agriculture caused by drought.
Real GDP is projected to decline to 3.3% in 2024 and 2025 owing to anticipated weak global demand for
diamonds and contraction in agriculture. The report suggests that despite recent shocks, such as
COVID-19 and the Russian invasion of Ukraine, the Namibian economy continues to do relatively well. It
also notes that there were downside risks, including water supply interruptions that affected mining produc-
tion. The economy was also affected by the impacts of climate change, faltering growth in China which
could affect demand for Namibian diamonds, water supply constraints, drought conditions, and high costs
of key import items that could persist for a long time. As a mitigation measure, the Central Bank hiked its
interest rates by 50 basis point in June 2023 and implemented a stimulus package to revitalize the econo-
my.
As regards social developments, Namibia's inequality is among the highest in the world. Namibia is one of
the most unequal countries in the world. The Gini index was 59.1 in 2015, down from 61.0 in 2010 and 63.3
in 2022 because of COVID-19. About 28.7% of the population is poor, while 15% are extremely poor.
Poverty is higher in rural (37%) than in urban areas (15%). It is also higher among women (32%) than men
(26%). The incidence of poverty was projected to increase in 2015, rising to 64 % in 2021 due to COVID-19.
The unemployment rate in Namibia declined from 23.35% in 2020 to 19.63% in 2023.
Chapter 2 focuses on Namibia’s structural transformation, rapid growth in incomes and jobs in service
exports which are drivers to accelerate structural transformation, as well as on key obstacles to fast-paced
structural transformation.
Chapter 3 discusses structural change in national development plans, Namibia’s financing needs and gaps,
and ways of closing the financing gaps through domestic resource mobilization. It also makes recommen-
dations for boosting domestic resource mobilization and considers the private sector’s role in driving struc-
tural transformation, the role of regional institutions in supporting Namibia’s structural transformation
agenda, and the role of DFIs and MDBs in financing Namibia’s structural transformation. In addition, the
chapter presents Namibia’s stand on the need for reform of the international financial architecture and
examines ways of mobilizing additional resources for Africa’s structural transformation, dealing with debt,
and financing climate action. Finally, it makes recommendations relating to global good governance, debt
relief, international public finance, global social safety net, policy and regulatory frameworks, scaling up
development finance, and climate financing.
COUNTRY FOCUS REPORT 2024 NAMIBIA 7

INTRODUCTION
Namibia gained political independence from South African apartheid rule on 21March 1990, and is
therefore one of the youngest African nations. Namibia is a multi-party democracy with general and local
government elections being conducted regularly. The country has established a good governance record
and is consistently ranked among the top sub-Saharan African performers on governance indicators.
Namibia’s strong governance architecture resulted in a smooth transition from the third to the fourth Presi-
dent, when President Geingob passed on in February 2024 and the Vice President was sworn in within less
than 15 hours, while a new Vice President was appointed at the same ceremony. The ceremony followed
the path prescribed in Namibia’s constitution.
The country is in the south-west of Africa, bordering on Angola and Zambia to the north, Zimbabwe to
the north-east, Botswana to the east, and South Africa to the south. Its coastline, which stretches for some
1,500km in the west, offers access to the nutrient-rich Benguela upwelling with its fish resources, to
diamonds mined offshore, as well as to recently discovered, potentially large oil deposits. The country also
has several unique features that offer opportunities, but pose challenges to its development path. It is the
third least densely populated country in the world, after Greenland and Mongolia. Its population of 3.0
million inhabitants in 20231 is dispersed over an area of some 825,000 square kilometres, with a popula-
tion density of some 3.7 persons per square kilometre. The low population density affects the cost of public
service delivery and impacts on access to markets and its inherent costs, and therefore on business oper-
ating costs.
Namibia is the driest country in sub-Saharan Africa, with highly variable rainfall patterns exacerbated by
the impact of global warming. Climate change will affect not only subsistence and commercial agriculture
that is the mainstay of a large part of the Namibian population, but also business operations, tourism, as
well as infrastructure costs. The arid and semi-arid conditions limit the potential of some traditional sectors,
such as agriculture, but also provide opportunities for new industries. Perennial rivers provide access to
water only at the country’s borders in the north, north-east and south, while inland rivers run for a while
after heavy rainfall. However, underground water resources are used for irrigated crop farming, including
horticulture farming and irrigation areas along some of the perennial rivers.
The Atlantic Ocean benefits not only the fisheries and mariculture sector and potentially in the
future the oil and gas industry, but also the transport and logistics sector through the two harbors,
Walvis Bay, and Lüderitz. Namibia therefore aims to become a regional logistics hub, focusing on its
landlocked neighboring countries, such as Botswana, Zambia and Zimbabwe that have been allocated dry

ports at the Walvis Bay port. In contrast, the country’s geographical location is often viewed as
having a detrimental impact on its competitiveness due to relatively long distances to large
markets such as South Africa and Angola, which is mitigated, however, by factors such as politi-
cal and macro-economic stability, expansive and reliable infrastructure, and safety and security.
The economic potential of the blue economy is only slowly emerging (see also 4.2.2), since it
has been identified in the Fifth National Development Plan (NDP5) as a priority sector.
The mining sector, which is dominated by diamond, uranium, and gold, remains the
backbone of Namibia’s economy in terms of contribution to the gross domestic product
(GDP 16.2% in 2023), government revenue, and foreign exchange earnings. Since the mining
industry is very capital-intensive, its direct employment effect (1.7% in 2018) is relatively low
compared to the monetary value of its output. Tourism has emerged as a major industry,
contributing about 7% to foreign exchange reserves and providing substantial employment
(11.4% of total employment in 2018) and cash-income opportunities in remote areas.
The wealth created by the mining sector has moved Namibia into the upper middle-in-
come country (UMIC) category with a per capita income of NAD 79,431 in 2022, equivalent
to USD 4,849.2. However, Namibia remains one of the most unequal countries in the world,
with a Gini-coefficient of 0.56 in 2015/163 and 63.3 in 2022. This, in addition to the size of its
population, limits the demand for domestic goods and services. Although progress has been
made in creating wealth for all, income equality and job creation remain a major challenge. The
proportion of people classified as poor or severely poor was halved between 2003/04 - from
37.5% to 17.4% and from 21.8% to 10.7% respectively. Life expectancy at birth dropped by
almost ten years from 61.5 years to 53.6 years between 1990 and 2005, before improving
rapidly until 2017 to 64.9 years. This improvement reflects the substantial efforts made to
combat HIV/AIDS.
This CFR is organized in three chapters, beginning with chapter 1 on Macroeconomic perfor-
mance and outlook. Chapter 2 takes stock of Namibia’s structural transformation. Chapter
three deals with financing to fast-track Namibia’s structural transformation. It argues that the
global financial architecture has failed to deliver development financing at scale to Namibia and
to Africa in general. It maintains that Africa’s growing significance in the global economy
warrants commensurate treatment and representation in international financial governance and
therefore calls for its reform. It discusses structural transformation in national development
plans, Namibia’s financing needs and gaps, and ways of closing the financing gap through
domestic resource mobilization. Furthermore, it considers the private sector’s role in financing
structural transformation, and the role of DFIs in supporting structural transformation. It posits
that Namibia’s progress towards structural transformation requires significant investments in
infrastructure, human capital and climate action. In addition, it argues that global financial archi-
tecture has failed to deliver development financing at scale to Namibia and to Africa in general,
insisting that Africa’s growing significance in the global economy warrants commensurate
treatment and representation in international financial governance, and therefore calls for its
reform.
10 COUNTRY FOCUS REPORT 2024 - NAMIBIA

MACROECONOMIC
PERFORMANCE AND
1
OUTLOOK
KEY MESSAGES
• The Namibian economy grew by an estimated 4.2% in 2023, down from 5.3% in 2022, owing to weak
global demand and contraction in agriculture.
• Inflation moderated slightly from 6.1% in 2022 to 5.9% in 2023 as demand for Namibian diamonds
declined alongside reduction of prices of other commodities such as oil and food.
• Namibia's stock of international reserves stood at 5.7 months of import cover in 2024. To continue
safeguarding the peg between the Namibia Dollar and the South African Rand, while supporting the
domestic economy, the Monetary Policy Committee (MPC) decided to maintain the Repo rate at
7.75%.
• The fiscal deficit narrowed from 5.1% of GDP in 2022 to 3.8%of GDP in 2023. The current account
deficit declined from 12.9% of GDP in 2022 to 10.3% in 2023, reflecting slightly lower imports.
• Namibia's public debt increased sharply in 2023 due to the impact of the COVID-19 crisis, compound-
ed by the sharp decline in SACU tax revenues. Public debt sharply increased to 65.9% of GDP in 2021,
as the fiscal deficit widened to 8.8% of GDP to accommodate the COVID-19 response package, and
real GDP contracted by 8%. Public debt further increased to 70.1% of GDP in 2023, slightly above the
market access countries debt sustainability analysis ( MAC-DSA benchmark of 70%.
• Moody's and Fitch downgraded Namibia's rating to B1 in April 2022 and BB- in June 2022 respective-
ly. The current account deficit improved from 12.9% of GDP in 2022 to 10.3% in 2023, reflecting slight-
ly lower imports.
• Non-performing loans declined from 6.4% of gross loans in 2019 to 1.1% in 2022, while the capital
adequacy ratio stood at 15.6% in 2022, just 0.776% less than in 2021.
• Namibia's poverty and inequality levels are among the highest in the world. About 28.7% of the popula-
tion is poor, and 15% extremely poor.
• Poverty is higher in rural (37%) than urban areas (15%). It is also higher among women (32%) than men
(26%). The incidence of poverty is estimated to have increased since 2015, rising to 64 % in 2021.
• The persistence of poverty in certain areas and households in Namibia is strongly associated with the
exclusion of many Namibians from the mainstream economy. Many Namibians, because of their level
of education, location or health, cannot participate fully in the modern economy and are therefore
vulnerable to falling into and remaining in poverty.
• Namibia is one of the most unequal countries in the world. The Gini index was 59.1 in 2015, down from
61.0 in 2010, and rose to 63.3 in 2022. The unemployment rate in Namibia declined from 23.35% in
2020 to 19.63% in 2023.

1.1 Introduction 1.3.1 Monetary policy – Inflation –
Exchange rate
This chapter presents Namibia’s economic
The ultimate objective of monetary policy in
performance in 2023, with medium-term
Namibia is to maintain price stability. To
growth projections over the 2024-2025
achieve this broad objective, the Bank of
period. It also assesses trends in key macro-
Namibia has an intermediate target to
economic indicators, fiscal and monetary
promote an economic and financial environ-
policies, domestic and international financial
ment that will sustain the one-to-one parity
flows, investment, and public debt. The chap-
between the Namibian dollar and the South
ter will also discuss major downside and
African rand. Inflation fell slightly from 6.1% in
upside risks to the outlook, and provide policy
2022 to 5.9% in 2023 as demand for Namib-
options for high and resilient growth to
ia’s diamond slackened and the prices of
support macroeconomic stability and
commodities such as oil and food came
economic transformation.
down. To continue safeguarding the peg
1.2 Growth performance between the Namibian dollar and the South
African rand, while supporting the domestic
The Namibian economy grew by an estimated economy, the Monetary Policy Committee
Namibia's recent 4.2% in 2023, down from 5.3% in 2022, due (MPC) decided to hold the Repo rate at
to weak global demand and contraction in 7.75%. The Namibian dollar depreciated by
economic perfor- agriculture. (Central Bank of Namibia, 2023).
mance was On the supply side, buoyed mineral and oil 6.4% against the US dollar, 12.5% against
prices pushed growth as investments in the the euro, and 12.2% against the British
stronger than
extractive sector increased. Global and pound in 2023 due to the depreciation of the
expected driven regional developments have been critical South African rand to which the Namibian
by the mining drivers of Namibia’s economic performance, dollar is pegged. Inflation decelerated from
sector, including with reliance on commodity exports and
Southern African Customs Union (SACU) 6.1% in 2022 to 5.9% in 2023 due to the
investments in oil transfers decline in food inflation. Non-performing
exploration. The loans declined from 6.4% of gross loans in
economy has 1.3 Other recent macroeconomic 2019 to 1.1% in 2022, while the capital
recovered to its adequacy ratio stood at 15.6% in 2022, just
and social developments
0.776% lower than in 2021.
pre-pandemic
level, but many
key sectors,
including job-rich
construction and Box 1.1: Impact of tighter international financial conditions
financial services,
continue to lag. Tighter international financial conditions imply that global growth will slow down further
amid tight monetary policy, restrictive financial conditions, and feeble global trade and
investment. The impacts of such tightening include an escalation of the recent conflict in
the Middle East, financial stress, persistent inflation, rising unemployment, trade fragmen-
tation, and climate-related disasters. Global cooperation is needed to provide debt relief,
facilitate trade integration, tackle climate change, and alleviate food insecurity. Among
emerging markets and developing economies (EMDEs), commodity exporters continue to
grapple with fiscal policy procyclicality and volatility. Across all EMDEs, appropriate mac-
roeconomic and structural policies, as well as well-functioning institutions, are critical to
help boost investment and long-term prospects.

The outbreak of COVID-19 compelled advanced countries to raise interest rates to
contain inflation. This decision impacted the Namibian economy. Tighter international
financial conditions resulted in a weak demand for Namibia’s exports (textiles), thereby
negatively affecting the current account which deteriorated from –11.2% of GDP in 2021
to –12.9 of GDP in 2022. Namibia’s subdued exports also affected GDP growth, which
impacted the fiscal deficit and increased debt levels. Real GDP growth declined from
5.3% in 2022 to 4.2% in 2023.
The local currency weakened due to a decline in portfolio investment, thereby contributing
to an increase in inflation from 3.6% in 2021 to 6.1% in 2022. In addition, interest
payments on loans increased, exacerbating debt vulnerability. Interest rates and
exchange rates became major drivers of debt accumulation in Namibia. Tighter interna-
tional financial conditions in developed countries resulted in a decline in ODA to Namibia.
Since 80% of Namibia’s development budget is externally financed, this affected the
implementation of its NDP. Therefore, tighter international financial conditions do not
augur well for Namibia in particular, and Africa in general.
1.3.2 Fiscal policy – public debt downgraded Namibia’s rating to B1 in April

2022 and BB- in June 2022. Namibia's exter-
The Government Fiscal Policy Framework nal debt as a ratio of GDP is expected to
remains grounded in fiscal countercyclicality, decline gradually. External debt peaked in
with the objectives of providing support to the 2020, rising to 77.3% of GDP (with public
economy, safeguarding macroeconomic external debt at 21.3% of GDP and private
stability and social welfare, and ensuring external debt at 56% of GDP) and reflecting
long-term fiscal sustainability. The fiscal the sharp contraction in output and sizable
deficit narrowed from 5.1%of GDP in 2022 to exchange rate depreciation (about 14%).
3.8% of GDP in 2023. The current account Starting from 2022, external debt is expected
deficit declined from 12.9% of GDP in 2022 to gradually decline as the economy recovers
to 10.3% in 2023, reflecting slightly lower and the current account position gradually
imports. Namibia’s public debt increased improves. Gross external financing needs are
sharply in 2023 due to the impact of the expected to remain large, but to gradually
COVID-19 crisis and the sharp decline in decline over the medium-term.
SACU tax revenues. In view of the COVID-19
shock, the authorities had to temporarily 1.3.3 External position – external finan-
deviate from their planned fiscal consolidation
cial flows
to respond to the crisis. Public debt sharply
increased to 65.9% of GDP in 2021, as the The current account deficit improved from
fiscal deficit widened to 8.8% of GDP to 12.9% of GDP in 2022 to 10.3% in 2023,
accommodate the COVID-19 response reflecting slightly lower imports. Non-per-
package, and real GDP contracted by 8%. forming loans declined from 6.4% of gross
Public debt further increased to 70.1% of loans in 2019 to 1.1% of GDP in 2022, while
GDP in /2023, slightly above the MAC-DSA the capital adequacy ratio stood at 15.6% in
benchmark of 70%. Moody’s and Fitch 2022, just 0.776% lower than in 2021.

Table 1: Key macroeconomic indicators
2019 2020 2021 2022 2023(e) 2024(p) 2025(p)
Real GDP growth -0.8 -8.1 3.6 5.3 4.2 3.3 3.3
CPI inflationpar habitant 3.7 2.2 3.6 6.1 5.9 4.6 4.4
Overall fiscal balance, including
grants % GDP * -5.6 -8.9 -8.6 -5.1 -3.8 -4.2 -4.0
Current account balance (% GDP) -1.8 -4.7 -4.4 -0.8 1.1 0.9 1.1
Total population (Millions) 2.4 2.5 2.5 2.6 2.6
Life expectancy at birth (years) 63.1 62.8 59.3 58.1 59.5

Source: Data from Domestic authorities; estimates (e) and prediction (p) based on authors' calculations.
AfDB Statistics Department, April 2024; * Year n refers to April n / March n+1
1.3.4 Social developments ate downwards in 2025. Secondary industries

are projected to grow by 3.3% in 2024, up
Namibia's poverty and inequality levels are from the 2.0% growth recorded in 2023. This
among the highest in the world. About 28.7% performance is expected to be driven by
of the population is poor, with 15% extremely manufacturing and resurgence in construc-
poor. Poverty is higher in rural (37%) than tion activities for 2024. Furthermore, the
urban areas (15%). It is also higher among sector growth is expected to improve to 4.0%
women (32%) than men (26%). The incidence in 2025 on the account of the projected
of poverty has increased since 2015, rising to recovery of the electricity and water sectors.
64 % in 2021. Namibia is one of the most Inflation is expected to moderate further to
unequal countries in the world. The Gini index 4.6% in 2024 and 4.4% in 2025 owing to
was 59.1 in 2015, down from 61.0 in 2010 decline in food inflation. The fiscal deficit is
and 63.3 in 2022. The unemployment rate in projected to remain at 4% of GDP in 2024
Namibia declined from 23.35% in 2020 to and 2025 on expectations of improved
19.63% in 2023. The persistence of poverty revenue collection. The current account
in certain areas and households in Namibia is deficit is expected to moderate to 9.6% of
strongly associated with the exclusion of GDP in 2024 and 8.5% in 2025.
many Namibians from the mainstream econo- Growth for tertiary industries is expected to
my. Many Namibians, given their level of remain robust in 2024 and 2025. Tertiary
education, location or health, cannot partici- industries are projected to grow by 4.5% in
pate fully in the modern economy and are 2024 and by 4.1% in 2025, from 2.7%
therefore vulnerable to falling into and remain- recorded in 2023. Wholesale and retail trade,
ing in poverty. hotels and restaurants, transport and storage,
financial and insurance service activities, and
1.4 Macroeconomic outlook public administration and defense are expect-
and risks ed to lead growth for tertiary industries in
2024.
1.4.1 Outlook
Real GDP is projected to decline to 3.3% in 1.4.2 Risks

2024 and 2025 because of anticipated weak
Downside risks are related to monetary policy
global demand for exports and contraction in
tightening which will slow down growth, to the
agriculture. Growth for secondary industries
high costs of key imports, and to Russia’s
is expected to improve in 2024, and moder-

continuing invasion of Ukraine, which will revenue mobilization and has indicated
increase commodity prices. The faltering that "the imperative to fund critical nation-
growth in China could affect demand for al priority needs calls on Government to
Namibian commodities. As mitigation mea- strengthen revenue mobilization strate-
sures, the Central Bank hiked its interest rates gies and increasingly harness measures
by 50 basis points in June 2023 to contain to improve internal efficiency, reduce
inflation and implemented a fiscal stimulus. waste and realize internal savings as
Risks to domestic growth are predominantly important facets for public finance man-
due to water supply constraints that could agement in the medium-term" (Ministry of
continue to affect mining production at the Finance, 2013).
coast, drought conditions, high costs of key
import items that are likely to persist for a long • Enabling environment: The major
time, and supply chain disruptions from global constraints on the private sector in
trade flows. Namibia include financing, training,
government regulations, crime,
1.5 Conclusion and recommen- infrastructure, markets, as well as tech-
nology. Key reforms undertaken by the
dations
Government to improve the business
environment include enactment of the
The Government of Namibia should imple- Business and Intellectual Property Bill
ment the following recommendations in the (BIPB), the Industrial Development
short, medium and long terms: Agency Bill, and the Public Private
Partnership (PPP) Bill. The BIPB mainly
Short term provides for an online business registra-
tion and licensing platform, known as the
• Sound macroeconomic policies: Namibia
Integrated Customer Service Facility, and
should prioritize public spending and
a "One-Stop-Shop" for investors. The
improve the quality of public investments
GRN has also embarked on various
while avoiding to crowd out the private
policy initiatives for small and medi-
sector.
um-sized enterprise (SME) development
• Promoting local production: Namibia is a to drive industrialization and job creation.
major importer. South Africa is Namibia's These include the approval of the SME
major import partner (66% of total Policy and the SME financing Strategy.
imports). The Government should However, Namibia needs to deepen
encourage local production to reduce regulatory reforms to improve the invest-
food imports and ease pressure on ment climate, as well as promote local
foreign exchange, and thereby reduce entrepreneurship for private sector devel-
inflation. The promotion of local produc- opment.
tion will also create fiscal space and help
• Acceleration of structural reforms to build
reduce the deficit.
a resilient economy: Namibia should
implement structural reforms to encour-
Medium to long term age job creation and investment, as well
as improve productivity. This action will
• Domestic resource mobilization: To boost the economy's competitiveness
achieve the objectives outlined in NSDP and growth potential. In addition, the
II, the Government needs to enhance reforms could include improving the
domestic resource mobilization. The business environment regulations,
Government of the Republic of Namibia supporting more flexible labor markets,
(GRN) recognizes the need for enhanced

gradual State withdrawal from the econo- nies to conduct business and plan for the
my, and a simpler tax system or less red future.
tape, which will make it easier for compa-

TAKING STOCK OF
NAMIBIA’S STRUCTURAL
TRANSFORMATION
2
PROGRESS
KEY MESSAGES
• Namibia's per capita income increased from USD 8,130 in 2010 to USD 11,190 in 2022. The industrial
sector in Namibia was the main driver of growth and propelled its structural transformation, with labor
moving from agriculture into industry. From 1991 to 2018, the share of agriculture, forestry, and fisher-
ies increased from 8% to 13%. It peaked at 13% from 2006 to 2009 and recorded its lowest in 1996 at
8%. The share of manufacturing increased from 6.7% in 2011 and 2012 to 10.7% in 2005. The share
of services increased from 48.4% in 2008 to 60.7% in 1993.
• In Namibia, the primary industry has the lowest level of labor productivity, which means that additional
workers will be required each time to produce the same unit of output compared to the other two indus-
tries. Secondary industry, on the other hand, is the most labor-productive sector, which means that
fewer workers will be needed to produce the same unit of output over time. This also means that the
secondary industry is able to produce more units of output each time with the same or a smaller
number of workers.
• With higher productivity gains in secondary industries, structural transformation can easily be achieved
through the national development plans. Given the structural transformation aspirations, there is need
to enhance productivity levels, especially in the secondary industry which is showing the potential to be
highly productive.
• High productivity levels are essential for increasing national income and are associated with reduced
poverty rates and improved living standards.
• The trends in the growth performance of the construction sub-sector reflects the developmental nature
of the Namibian economy. As regards employment by sector in Namibia from 2011 to 2021, 22.12%
of the employees were active in the agricultural sector, 16.43% in industry, and 61.45% in the services
sector. With respect to the labor growth productivity composition, structural change within agriculture
from 1991 to 1999 was 1.89, with 0.982 in industry, -0.710 in services, and 0.55 for overall structural
change. As for the labor productivity growth composition, structural change from 2000 to 2009 within
agriculture was -0.534, with 3.166 in industry, -4.675 in services, and 1.155 for overall structural
change.
• The total factor productivity in Namibia declined from 1.19325 in 1980 to 0.944 in 2019. In Namibia, the
primary industry has the lowest levels of labor productivity, which means additional workers will be
required each time to produce the same unit of output compared to the other two industries.
• Secondary industry, on the other hand, is the most labor-productive sector, which means that fewer
workers are needed to produce the same unit of output over time. This also means that the secondary
industry is able to produce more units of output each time with the same or less number of workers.
Some of the drivers of Namibia's structural transformation are governance, urbanization, technology
and capital, ICT, and transport. Some of the obstacles are climate change, informality, political issues,
financing constraints, financial exclusion, capital flight, and institutional factors.

2.1 Introduction thereof), as well the financing needs and
financing gaps, with the objective of
This chapter presents a comprehensive over- highlighting the main pull and push factors
view of recent progress in Namibia’s econom- guiding evidence-informed policymaking and
ic transformation amid a changing world, investment opportunities.
identifies its key trends, and outlines its char-
acteristics, as well as estimates the financing 2.2 Taking stock of economic
needs for fast-tracking structural transforma- performance and transformation
tion. It will adopt a historical perspective on in Namibia
(what has been done so far) and a
forward-looking approach (what can or The nature of structural transformation has
should be done in the future to fast-track implications for growth performance as it is
progress) to structural transformation, com- influenced by productivity across sectors,
paring Namibia’s performance to that of Africa which in turn have implications for GDP
and other peer countries and drawing lessons growth and GDP per capita. Namibia’s per
for the future. The chapter will assess the capita income increased from USD 8,130 in
impact of a wide array of socio-economic, 2010 to USD 11,190 in 2022. The trends
financial, governance, and external factors on comparison with peer countries and Africa is
The nature of Namibia’s structural transformation (or lack depicted in Figures 2.1 and 2.2.
structural trans-
formation has
implications for
growth perfor-
mance as it is Figure 2.1: Real GDP Growth
influenced by
productivity
15
across sectors,
which in turn have
implications for 10
GDP growth and
GDP per capita.
Namibia’s per 5
capita income
increased from 0 1980-1989 1990-1999 2000-2009 2010-2019 2020 2021 2022
USD8,130 in 2010
to USD 11,190 in
2022 -5
-10
lesotho Namibia Botswana Africa
Source: AfDB, Statistics Department.

Real GDP growth per capita
15
10
0
1980-1989 1990-1999 2000-2009 2010-2019 2020 2021 2022
-5
-10
-15
lesotho Namibia Botswana Africa
The trend in the growth performance of the marginally over the years. The public sector
construction sub-sector reflects the develop- and wholesale and retail and trade sub-in-
mental nature of the Namibian economy. The dustries dominate the services industries,
construction boom brought about by the while the share of hotels and restaurants
infrastructural development and more specifi- sector, which is a proxy for tourism, remains
cally the expansionary fiscal policy following below 2.0%. From 1990 to 2006, ores and
the 2008/2009 financial crisis boosted the minerals represented close to or above 50%
growth of the construction sector. This is of total exports, with diamond exports domi-
further reflected by relatively high investment nant. This, however, declined to about a third
expenditure averaging about 23.7% of GDP after 2006, with manufacturing taking over. It
for the 2000-2015 period compared to about should be noted that, on average, close to a
14.0% for the 1990-1999 period. The third of manufactured exports comprises
Targeted Intervention Program for Employ- mining products with minimal value added,
ment and Economic Growth (TIPEEG) aimed limited to cutting and polishing of diamonds,
at accelerating infrastructure development copper, and zinc refinery.
was implemented over the 2011/12-2013/14
financial years and is estimated to have cost 2.3 Namibia’s structural trans-
NAD 14.7 billion. The program undoubtedly formation: Drivers, bottlenecks,
stimulated growth, as reflected by the 16.6%
and opportunities
average growth in the construction sector,
and has potential to indirectly stimulate
2.3.1 Namibia’s structural/economic
growth in the long run. The services industries transformation
remain the highest contributor to GDP, with a
The relative sector productivity in agriculture
share of over 50%, and have increased
in Namibia in 2018 (Figure 2.3) was 0.3, with

an employment share of 23.1%, mining was ment share of 3.4%, business services was
9.9 with an employment share of 1.7%, man- 0.65 with an employment share of 6.3%,
ufacturing was 1.8 with an employment share financial services was 4.1 with an employment
of 6.2%, utilities 1.7 with an employment share of 1.9%, real estate was 40.5 with an
share of 1%, construction was 0.42 with an employment share of 0.15, public services
employment share of 6.2%, wholesale and was 1.9 with an employment share of 13.9%,
retail was 0.55 with an employment share of and personal services was 0.21 with an
22.6%, transport was 0.547 with an employ- employment share of 13.6%.
Figure 2.3: Relative factor productivity and employment shares (%) in 2018
450
400
350
300
250
200
150
100
50
Relative fcator Porductivity Employment Shares
Figure 2.4: Sectoral Employment Shares 2011-2021

70
60
50
40
30
20
10
0
Agric. Industry Services

2.3.2 Unpacking Namibia’s structural than trade in services in terms of value,
transformation through labor productivity growth in services outweighed that of trade
decomposition in goods between 2019 and 2023. The
services account has been a significant
As regards labor growth productivity compo- sub-account of the current account, largely
sition, structural change in the agricultural registering net inflows in 2019, on the back of
sector over the 1991-1999 period was 1.89, export earnings from travel and manufactur-
in industry 0.982, and in services -0.710, and ing services. Export and import of goods rose
the average structural change was 0.55. With from NAD 56.1 billion and NAD 74.9 billion
respect to the 2000-2009 period, the struc- recorded in 2019 to NAD 85.7 billion and
tural change in the labor productivity growth NAD 116.0 billion, respectively, recorded in
composition was -0.534 in the agricultural 2023. Meanwhile, export and import of
sector, 3.166 in industry, and -4.675 in services grew by higher margins, from NAD
services, and the average structural change 10.1 billion and NAD 9.1 billion recorded in
was 1.155. 2019 to NAD 18.4 billion and NAD 36.9
billion, respectively, recorded in 2023. The
The total factor productivity in Namibia higher outflows in the trade in services,
declined from 1.19325 in 1980 to 0.944 in particularly since 2021, was chiefly due to
2019. In Namibia, the primary industry has higher payments for services with ongoing oil
the lowest levels of labor productivity, which and gas exploration and appraisal activities in
means additional workers will be required Namibia.
each time to produce the same unit of output
compared to the other two industries. The Ministry of Trade also reports that
Secondary industry, on the other hand, is the Namibia’s export of services has also been
most labor productive sector, which means on an upward trend, mainly supported by
that fewer workers will be needed to produce travel, transport and manufacturing services.
the same unit of output over time. This also Since 2019, export of services rose by 80.9%
means that the secondary industry is able to to NAD 18.4 billion recorded in 2023. Histori-
produce more units of output each time with cally, export receipts for services have been
the same or less number of workers. Doing underpinned by travel, transport and manu-
more with less is the foundation of productivi- facturing services receipts. Other business
ty. Thus Namibia has the potential to become services have gained significant momentum
an industrialized nation as envisaged in Vision in recent years. Namibia’s travel services
2030. With higher productivity gains in have predominantly been sustained by a
secondary industries, structural transforma- robust tourism sector, while the manufactur-
tion can easily be achieved through the ing export receipts are mainly ascribed to
national development plans. Given the struc- copper smelting activities for non-residents.
tural transformation aspirations, there is need Meanwhile, export receipts from transport
to enhance productivity levels, especially in services have been mainly sustained by the
the secondary industry, which is showing increase in South Africa’s manganese
potential to be highly productive. High exports, which transit through Namibia and in
productivity levels are essential for increasing part uses Namibian transportation compa-
national income, and are associated with nies. Furthermore, the provision of road
reduced poverty rates and improved living transportation services for freight forwarding
standards. to non-residents, especially land-locked
neighboring countries such as Zambia and
2.3.3 Rapid growth in income and jobs
Botswana, has also contributed to high
embodied in services export: New evidence
export receipts for Namibia’s transport
Namibia’s Ministry of Trade and Industry services.
reports that although trade in goods is larger

Figure 2.5: Exports Value Added % of GDP
50
45
40
35
30
25
20
15
10
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Box 2.1: Successful experiences in supporting growth and structural transformation

Attempts at industrialization by all regions of the world hark back to the success first of
Great Britain, followed by Western Europe, and thereafter North America during the 19th
and early 20th centuries (Oyelaran-Oyeyinka, 2014). The literature on the experiences of
these countries seems to agree that, although the early-industrializing countries started
out at different stages of growth, they followed a more or less similar format of change that
led to their transformation. Marked by the shift from a subsistence/agrarian economy
towards more industrialized/mechanized modes of production, the hallmarks of industrial-
ization include technological advance, widespread investments in industrial infrastructure,
and a dynamic movement of labor from agriculture in manufacturing (Romer,” 1952). It is
generally accepted that a dynamic process of industrialization is fundamental to overall
economic development of countries, given that it promotes growth-enhancing structural
change, which is the gradual movement of labor and other resources from agriculture to
manufacturing, accompanied by productivity increases. Manufacturing is construed as
critical in most of such explanations because of the empirical correlation between the
degree of industrialization and the per capita income in countries (Szirmai, 2012). Given
that productivity is higher in the case of manufacturing than agriculture, transfer of
resources to manufacturing should normally provide a basis for higher rates of productivi-
ty-induced growth structures.
Source: Ministry of Trade, Namibia

2.3.4 Drivers to accelerate structural flexibility.
transformation
• Urbanization: Urbanization is an essen-
tial feature of Namibia’s structural trans-
Some of the factors driving Namibia’s struc-
formation. Namibia is in the middle of
tural transformation are:
transition from a rural to an urban
• Governance: Namibia consistently ranks society. By 2050, an estimated
among the top sub-Saharan African three-quarters of its population will be
(SSA) countries on good governance living in cities. The share of Namibia’s
metrics. It was ranked 8th out 54 coun- urban population as a proportion of the
tries surveyed on the 2023 Mo Ibrahim total population increased from 50.3% in
Index of African Governance (IIAG) with a 2018 to 53.6% in 2022. Structural trans-
score of 64.1/100. Namibia’s perfor- formation away from agriculture has
mance is strongest on the dimensions of resulted in higher population densities in
“Safety and Rule of Law” and “Participa- urban areas—that is, an increasingly
tion and Human Rights” where it is positive relationship between non-agri-
ranked among the top three countries. cultural employment and population
On the 2023 Corruption Perception Index density. Urbanization is a source of
of Transparency International, Namibia economic as well as social transforma-
ranked 4th out of 180 countries globally, tion. It favors change and innovation
and 5th on the African continent scoring mainly due to its concentration of (skilled)
49 out of 100. As part of financial gover- labor, capital, and economic activities in
nance, public expenditure and financial cities.
accountability assessment (PEFA) for • Technology and human capital:
Namibia indicated progress in public
Namibia’s human capital index is 0.4.
financial management (PFM) reforms.
Namibia ranks 100th out of the 132
Key reforms included the introduction of
economies featured in the GII 2021. The
the Medium-Term Expenditure Frame-
table below shows the rankings of
work (MTEF), programme budgeting,
Namibia over the past three years, noting
integrated financial management sys-
that data availability and changes to the
tems (IFMIS), and improved cash man-
Global Innovation Index (GII) model
agement. These reforms enhanced mac-
framework influence year-on-year com-
roeconomic stability. The labor law in
parisons of the GII rankings. Namibia
Namibia seeks to entrench fundamental
ranks 32nd out of the 34 upper
labor rights and protections, regulate
middle-income group economies.
basic terms and conditions of employ-
Namibia ranks 6th out of the 27 econo-
ment, ensure the health, safety and
mies in sub-Saharan Africa.
welfare of employees, and allow for
Rankings for Namibia (2019–2021)
Year GII Innovative inputs Innovative inputs
2021 110 88 110
2020 104 101 104
2019 101 99 103

Source: Ministry of Communications Science and Technology

• ICT: Namibia has achieved significant km of cape gauge configuration like the
progress expansion of access to ICT rest of the region. The railway network
services. The mobile phone population plays an important role in the movement
coverage and subscription rates have of bulk freight. Namibia’s largest port,
increased significantly, standing at 95% Walvis Bay, has recently undergone
and 103% respectively. expansion and modernization. The
expansion of the port container terminal,
• Transport: Namibia has a relatively which was commissioned in August
well-developed road network covering 2019, is part of long-term plan to position
45,380 km, of which 14% is paved. the country as a logistics and distribution
About 93% is either in good or fair condi- hub for the SADC region.
tion. The rail network comprises 2,382
Box 2.2: Potential and existing opportunities in Namibia

Peace, political stability and good governance: Namibia has been politically stable
since independence, with relatively strong governance institutions.
Proximity to and integration with South Africa: Namibia has easy access to a range
of South Africa’s expertise, advanced technology, developed infrastructure, relatively
advanced intermediate inputs and goods markets, capital and financial markets, and
investment resources.
The currency peg with the ZAR ensures exchange rate stability. This factor provides an
opportunity to connect to South Africa’s supply chains and the region.
Abundant natural resources: Namibia is rich in mineral deposits. It also has fishing
grounds with potential sustainable yields of up to 1.5 million metric tons/year, as well as
unique flora and fauna, an opportunity for value-added manufacturing and bolstering
tourism.
Potential to become a regional logistics hub through Walvis Bay port: The
deep-water port facilities and a network of trunk roads and railway that cross its
borders, position Namibian well as a regional logistics hub.
Preferential access to markets: Namibia’s membership of SACU, COMESA and

SADC, as well as new regional and continental trade deals (Tripartite Free Trade Area
and AfCTA) provide access to a potentially huge market.
Source: AfDB, CSP 2020-2024
2.3.5 Key bottlenecks to fast-paced modern manufacturing and improve low

structural transformation agricultural productivity (AfDB 2018). In the
specific case of Namibia, the following are
The African continent is facing a myriad of
some of the bottlenecks to fast-paced struc-
challenges in its drive for structural trans-
tural transformation:
formation, in particular climate change,
informality, capital flight, financing • Climate change: Greenhouse gas (GHG)
constraints, an estimated USD 93 billion per inventories indicate that emissions from
annum infrastructure gap, inadequate human agriculture, forestry and other land uses
capital development, and a weak technologi- (AFOLU) are responsible for about 24%
cal base that is not sufficient to support of global GHG emissions, of which

agricultural production alone is responsi- determinants of revenue performance
ble for more than half (IPCC 2014b). (Drummond et al., 2012). Such factors
Climate change has led to droughts and are believed to influence tax revenue
floods, thereby affecting agricultural through their contribution to tax evasion,
production and productivity. improper tax exemptions, and weak tax
• Informality: Namibia’s informal economy administration. Public institutions are not
is also characterized by numerous functioning at their optimum, thereby
undocumented and unregulated undermining their credibility.
businesses and employment similar to all
other developing countries. Namibia’s
informal sector has been recorded to be 2.4 Financing to fast-track
the country’s largest employer and Namibia’s structural transforma-
contributes about 24% to the country’s tion: The financing gap and the
gross domestic product (GDP). Yet, it is
country’s commitment to struc-
not accounted for in formal statistics.
Despite this huge contribution, the sector tural change
presents challenges in terms of labor
rights, social protection, tax evasion, 2.4.1 Structural change strategy in the
economic stability, and lack of access to National Development Plan
finance. The absence of labor rights and The fifth National Development Plan (NDP 5)
lack of financing hinder their transition recognizes that structural transformation is a
from the informal to the formal sector and key strategy in Namibia’s graduation to a
a shift of resources from the traditional to high-income nation. Improved systems of
modern sectors and from low productive governance will facilitate the collaboration of
to high productive sectors. The absence many sectors in achieving structural transfor-
of labor rights discourages skilled work- mation. Special attention will be paid to the
ers from taking up jobs because their implementation and monitoring of inclusive
rights are not protected. economic growth through the provision of
• Political issues: Minority ethnic groups in high-quality government services including
Namibia accuse the Government of favor- water, sewage, electricity generation, trans-
ing the majority Ovambo ethnic group in port, housing, and land use planning.
allocating services. The nomadic San
people experience disproportionate 2.4.2 Financing needs and financing gap
poverty and societal marginalization.
The AEO 2024 estimates that the total
• Financing constraints: There are financ-
financing needs for achieving SDG 4 for by
ing constraints owing to financial exclu- 2030 is USD 0.14 billion, with a financing gap
sion, capital flight, and institutional of USD 0.02 billion. The total financing needs
factors.
for SDG 7 is USD 0.09 billion, with a financ-
• Financial exclusion: Despite the ing gap of USD 0.04 billion. The total financ-
existence of a well-developed financial ing needs for SDG 8 is USD 0.06 billion, with
system, there have been concerns a financing gap of USD 0.05 billion. The total
regarding financial exclusion. According financing needs for SDG 9 is USD 9.50
to the FinScope consumer survey (2012),
billion, with a financing gap of USD 9.36
31% of the Namibian population were
billion. The total financing needs to achieve
excluded from financial services.
all the SDGs is USD 9.786 billion, with a
• Institutional factors: Institutional factors, financing gap of USD 9.429 billion. The total
such as the quality of institutions, public financing needs for SDG 4 by 2063 is USD
governance, rule of law, rent-seeking 0.02 billion, with a financing gap of USD
tendencies, and regulatory frameworks 0.003 billion. The total financing needs for
have also been identified as important SDG 7 is USD 0.02 billion, with a financing

gap of USD 0.076 billion. The total financing with a financing gap of USD 1.63 billion. The
needs for SDG 8 is USD 0.01 billion, with a total financing needs for all the SDGs is USD
financing gap of USD 0.01 billion. The total 1.71 billion, with a gap of USD 1.65 billion
financing needs for SDG 9 is USD 1.66 billion, (Figure 2.6).
Figuer 2.6: Fianicng Needs and Gaps

12
10
0
2030 2063
Need Gap
2.4.3 Closing the financing gap through improve internal efficiency, reduce waste and
domestic resource mobilization realize internal savings as important facets for
The Government recognizes the need for public finance management in the medi-
enhanced revenue mobilization and has um-term” (Ministry of Finance, 2013). The
stated thus: “the imperative to fund critical required increase in tax/GDP ratio to close
national priority needs calls on Government to the estimated annual financing gap in Namib-
strengthen revenue mobilization strategies ia in 2030 is 83.6% and 14.6% by 2063
and increasingly harness measures to (Figure 2.7).

Figure 2.7: The required increase in tax/GDP ratio to close the estimated annual financing
gap in Namibia in 2030 and 2063
90
80
70
60
50
40
30
20
10
0
2030 2063
Source: AfDB, ECMR
Box 2.3: Bank support for Namibia’s structural transformation

The ERSP supported the Government to implement reforms that helped to create an
enabling environment for private sector development. The reforms include the approval
of industrial development regulations to simplify business registration procedures, as
well as the approval of a USD 117 million industry support facility to provide financing to
private sector beneficiary entities and eventually help to create jobs. The Government is
reforming its business climate through the Doing Business reforms roadmap: (i) the
Industry Development Act and Trade Regulations 2020 allow for over-the-counter
issuance of licenses and registration certificates; (ii) the FDI incentive package includes
low corporate tax rates, transfer duty waivers, and temporary property tax exemptions;
(iii) an investment facilitation law designed to attract private investments is being
prepared; (iv) an investment board is being established to resolve investor bottlenecks;
and (v) the Public Procurement Act is in place.
The Government is working on a stand-alone PPP Bill that will cover several aspects,
including procurement under PPP arrangements. The Bank is also supporting the
implementation of the PPP programme of the PPP Unit within the Ministry of Finance,
through budget support and an MIC grant facility.

2.4.4 Domestic resource mobilization for • Pension funds: The Government could
structural transformation also use pension contributions from
public-sector workers such as the
The Government is resorting to the following Government Institutions Pension Fund
policy options to boost domestic resource (GIPF) to finance productive investments
mobilization: which generate good return.
• Boosting domestic savings and
• Oil: Namibia discovered oil and gas in
promoting investment on a sustained
2022. It is expected that the country will
basis: The Government is boosting
exploit 11 billion barrels of oil and 2.2
private savings by promoting linkages
trillion cubic feet of natural gas reserves,
between formal and informal financial
which will transform the socioeconomic
institutions, which would improve access
landscape of the country. Some analysts
by small and medium-sized enterprises
have made bold predictions that the
(SMEs) to financial services, and further
Namibian economy will double by 2040,
develop the nascent Namibian capital
and that Government could earn more
markets. One way of promoting invest-
than USD 3.5 billion (approximately NAD
ments is to reduce the high costs of doing
53.5 billion) annually in royalties and taxes
business which discourages private
at peak production from oil finds.
investment, thereby generating negative
effects on income and savings. • Public financial management: Namibia
can improve PFM to create more fiscal
• Fighting capital flight: To minimize any space. The 2020 Public Expenditure and
possible capital flight, a lasting solution Financial Accountability Assessment
lies in continued political stability, (PEFA) for Namibia indicated progress in
improved governance, and stable macro- public financial management (PFM)
economic conditions in the form of low reforms. Key reforms include the intro-
inflation and stable exchange rates. duction of the Medium-Term Expenditure
Framework (MTEF), program budgeting,
• Judicious external borrowing: In integrated financial management sys-
November 2012, the Namibian Govern- tems (IFMIS), and improved cash man-
ment listed and issued the first non-South agement. The use of IFMIS has improved
African sovereign bond on the Johannes- the timeliness of financial reporting, while
burg Stock Exchange in the value of NAD debt management has been further
850 million. More of such listings could be enhanced by the adoption of a new debt
used to raise the much-needed financial management strategy. A new Public
resources for development projects. Financial Management Bill has been draft-
ed to replace the State Finance Act of
• Innovative utilization of remittances: 1991. In tandem, a new Internal Audit Bill
Namibia receives worker remittances has been drafted to align with interna-
from nationals working in the diaspora. It tional best practices. The GRN is also
constitutes about 0.6% of GDP. The taking steps to strengthen efficiency in
remittances can be packaged into private revenue administration, including the
equity funds with a guaranteed rate of establishment of a semi-autonomous
return. Such an arrangement would revenue authority.
boost inflows and could go a long way in
financing development projects in the
country.

2.5 Conclusions and policy rec- a dearth of skilled manpower in Namibia,
ommendations hence the mismatch between the labor
demand and supply. The curriculum in the
2.5.1 The role of the Government educational institutions should be tilted to
cater for the needs of the labor market and
The Government’s role is to build strong industry.
institutions and implement critical mea-
Formalization of the informal sector: The
sures to create a conducive environment
informal sector in Namibia constitutes 24.7%
for accelerating structural transformation.
of GDP, accounting for about USD 11 billion
Namibia needs to formulate and institutional-
at GDP PPP levels. The Government should
ize national development plans and policies
assist the informal sector operators to gradu-
tailored to its comparative advantage. The
ate into the formal sector. This has the advan-
country’s national development plans should
tage of increasing tax revenue and growing
reflect its priorities and comparative advan-
the economy. The Government should also
tage. The country’s diamonds have contribut-
facilitate access of the informal sector to
ed immensely to structural transformation
financing and training.
and development. The discovery of oil will
also give a big boost to the country’s devel- Scale up domestic resource mobilization
opment (DRM) and prioritize prudence in public
financial management (PFM): Domestic
Private sector flows: The private sector
resource mobilization would reduce Namib-
should assume center stage as the engine of
ia’s dependence on external flows which
growth. In that regard, the Government
have been found to be highly volatile, as well
should create an enabling environment for
as give the Government greater flexibility in
growth by facilitating access to information
designing and controlling its development
and credit, as well as improving the legal and
agenda. It also creates a conducive environ-
regulatory environment. An enabling environ-
ment for foreign investments, enhances
ment should help boost private capital flows
national ownership over development
to support Namibia’s structural transforma-
processes, and strengthens the bonds of
tion.
accountability between governments and
Prioritizing investment needs: This financ- their citizens (UNCTAD, 2005). Indeed,
domestic resource mobilization provides
ing gap of USD 9.429 billion to achieve the
developing countries, such as Namibia, with
SDGs by 2023 presupposes that Namibia
the necessary policy space which is often
prioritizes investment needs in education,
constrained under the terms and conditions
energy, productivity, and infrastructure. It
associated with external resources (
should also invest heavily in key sustainable
https://www.ipc-undp.org/pub/IPCWorking-
development goals (SDGs) such as educa-
Paper127.pdf).
tion, health, energy and infrastructure to
achieve structural transformation. Namibia Namibia needs to build and deepen
should invest its resources from diamonds, national and regional markets for goods,
and oil exports in these areas. services, capital, and finance. The African
Continental Free Trade Area comes in handy.
Human capital: Namibia should invest more
It offers Namibia an opportunity to expand its
in human capital to build requisite skills as it export markets beyond SADC. It is also a
prepares for industrialization. It should invest unique opportunity for the private sector to
more in education, nutrition, and health. The boost its textile exports beyond AGOA.
investment should be adapted to local Walvis Bay port, which the country’s major
realities, circumstances, and development port, can serve as a catalyst in boosting
priorities, including adequate skills training to Namibia’s trade with the rest of the continent.
prepare the workforce for the future. There is Namibia, as a producer of diamonds and oil,

needs to invest in natural capital accounting Agricultural Mechanization and Seed
beneficiation and conservation, and include it Improvement Project with expected
in the system of national accounts to expand outcomes of increased agricultural production
the economy. for cereal crops and improved rural employ-
ment, the MIC TSF Grant Feed Africa -
Invest in youth entrepreneurship develop-
Agricultural Transformation Program - feasibil-
ment program: On account of the high youth
ity study to design and prepare good quality
unemployment in Namibia (38.41%), the
and bankable agricultural projects with final
Government should create employment
designs, construction drawings and bidding
opportunities through entrepreneurship
documents, the Agricultural Bank of Namibia
development programmes, specifically by
Line of Credit, and the Humanitarian Emer-
providing skills training and facilitating access
gency Assistance to Mitigate Effects of the
to finance.
2018/2019 Drought. The Climate Finance
support for Namibia’s nationally determined
2.5.2 The role of the private sector
contribution (NDC) in 2021 resulted in a Green
Climate Fund (GCF) concept note being
The Government’s National Development
developed for the agriculture sector. It has
Plan seeks to empower the private sector by
also financed a sovereign guaranteed loan of
establishing value chains to reduce raw mate-
USD 300 million to the Namibian Ports
rial exports and involve MSMEs in produce
Authority (Namport) approved in 2013 to
processing in the country. To that end, the
finance the construction of the new container
Government is working directly with MSMEs
terminal in Walvis Bay port. The project has
and commercial financial service providers to
helped to: (i) increase international and
enable business associations and existing
inter-regional trade and enhanced regional
programs to provide companies with
integration with additional 750,000 twen-
needs-based support. They operate in two
ty-foot equivalent units’ capacity, and reduce
fields of action, namely private sector promo-
container dwell time by more than 30%; and
tion and financial sector development. In
(ii) enable Namibia to fully exploit its unique
both components, training courses are
geographical location as a facilitator of trade
offered to promote the entrepreneurial and
to and from the Southern Africa region.
financial skills of MSMEs in Namibia. This
project has promoted structural transforma-
2.5.4 The role of development financial
tion in Namibia with many MSMEs graduat-
institutions (DFIs) and multilateral develop-
ing into the formal sector. According to the
ment banks (MDBs)
Bank of Namibia, the oil and gas sector
generated NAD 33.4 billion in foreign direct
DFIs in Namibia have played a useful comple-
investment inflows between 2021 and 2023.
mentary role of fill existing gaps with
Foreign direct investment is a phenomenon
long-term financing, especially in infrastruc-
resulting from globalization, which involves
ture, housing, agriculture and SMEs. They
the integration of the domestic economic
have taken higher-than-average risks to fulfil
system with global markets. These, in turn,
their mandates and reduce credit procyclicali-
enhance growth and structural transforma-
ty.
tion.
As specialized institutions, DFIs have provid-

2.5.3 The role of regional institutions
ed a range of specialized financial products
and services to meet the specific needs of
A regional institution, such as the African
targeted strategic sectors. Ancillary services
Development Bank, has been assisting
in the form of consulting and advisory services
Namibia in financing its development agenda.
have also been provided by DFIs to nurture
More recently, it supported Namibia in a
and develop the identified sectors. DFIs there-
number of areas, including the Namibia
fore complement the banking institutions and

act as a strategic conduit to bridge gaps in universal definition for small and medi-
the supply of financial products and services um-sized enterprise. Despite this important
to identified strategic areas for long-term role, small and medium-sized enterprises
economic development. encounter many challenges, particularly lack
of access to financing. To circumvent this
Successful DFIs do two things well: first, they challenge, Namibia has established develop-
perform their jobs as development finance ment financial institutions, namely the Devel-
institutions, in that they finance development opment Bank of Namibia and the Small and
projects effectively. Secondly, they play key Medium Enterprise Bank, to ease access to
roles as facilitators, arrangers, idea banks, or funding. These two institutions have been
financiers, in the broader industrialization and established to finance projects or activities
economic development strategies of their from which commercial banks may shy away.
countries. The establishment of these two institutions is
supposed to lead to significant growth and
Small and medium-sized enterprises play a increase in the number of small and medi-
very significant role in the economy by creat- um-sized enterprises in Namibia’s economy.
ing jobs and value addition. There is no

FINANCING STRUCTURAL
TRANSFORMATION IN
NAMIBIA: THE NEED
3
FOR REFORM OF THE
INTERNATIONAL
FINANCIAL ARCHITECTURE
KEY MESSAGES
• Namibia has been classified as an upper –middle income country. Since then, it has not
been eligible for concessional resources, thereby limiting its capacity to access resources
at scale. This is a cause for concern for the country.
• For example, Namibia was allocated an amount of SDR 183 million out of a total allocation
of SDR 650 billion. This amount is grossly inadequate to meet Namibia’s development
challenges.
• There is need for reform of the international aid architecture to make more resource avail-
able to Namibia and other African countries.
• Reform of the international aid architecture could significantly increase financing for Namib-
ia’s structural transformation and catapult the continent to a higher level of economic devel-
opment.

3.1 Introduction ty Index, Namibia ranks second in the top 10
of the list, only second to South Africa since
Overall, there has been very little, if any, struc- 2015 as one of the countries with the highest
tural transformation of the Namibian econo- wealth inequality in the world. To undertake
my, as evidenced by the slow pace of change structural reforms rapidly, Namibia needs
in the manufacturing sector. Manufacturing’s more sustainable and predictable financing
share in GDP ranged from 7% in 1990 to 11% for development. Practical actions also need
in 2022. Agriculture’s share varied even less, to be taken on the issue of debt restructuring
ranging from 8% to 9%, while services’ share and forgiveness, debt-for-nature swaps, and
declined from 54.2% in 1990 to 26.1% in debt for development swaps. Sustainable
2022. and predictable financing is the bedrock for
all Namibia’s development priorities. In
Although Namibia is an upper middle-income essence. international financing institutions,
country, it faces many of the same challenges such as the World Bank, need to review their
as low-income countries owing to its past. capital adequacy ratios so as to unlock more
The global financial architecture has failed to capital for lending to low- and middle-income
provide adequate resources to support countries for more sustained financing for
Namibia’s development. development.
Namibia has therefore joined international Reform of the international financial archi-
calls for reform of the international financial tecture will benefit Namibia as follows:
Namibia needs architecture. Namibia’s ranking as an upper
more sustainable middle-income country has placed the coun- ◦ Additional resources: Additional
and predictable try in a precarious position. The President of resources will be available to Namibia
financing for Namibia, Nangolo Mbumba, has argued that when the IMF changes its allocation
development. his country continues to be unfairly labelled as system, which is currently based on
an upper middle-income country, limiting quotas rather than needs. This will enable
Practical actions
access to concessional capital, without a just Namibia to scale up its development
also need to be interventions. Fiscal incentives for the
recognition of the Gini coefficient inherited
taken on the issue from the past. He has further asserted that his private sector will also provide more
of debt restructur- country is now under pressure to devise new resources to the country.
ing and forgive- ways to access capital, suggesting more ◦ Debt restructuring: Namibia is in dire
ness, debt for sustainable and predictable financing for need of debt restructuring given the
nature and debt development. magnitude of its debt. Debt restructuring
for development will enable the country to achieve debt
swaps. 3.2 Namibia’s stand on the sustainability.
need for reform of the internation-
◦ Alleviation of financial shocks: Namibia
al financial architecture should be able to ease its financial
shocks through financial instruments as a
Namibia needs to transform rapidly and
climate-prone country.
become more inclusive to allow all citizens to
benefit from any growth and development. ◦ Direct private capital to where it is
The United Nations Population Fund (UNFPA) needed most and create investment
has noted that 43% of the country’s popula- pipelines: Localized incubators,
tion is experiencing multidimensional poverty. start-ups, and businesses should be able
According to the UNFPA 2022 annual report, to identify and target sectors with quick
the Gini coefficient index shows that income wins.
inequality in Namibia stands at 57.2%.
◦ Key areas for financing sustainable
According to the World Bank Wealth Inequali-
development priorities: Sustainable

development priorities are embedded in of BB-. In the event of a downgrade, the
the second national development plan. country would have difficulty in accessing the
The Government should concentrate on international financial market. SADC can also
financing these investment programs bring pressure to bear on the IMF to change
which have a direct impact on the the quota system of allocating SDRs. This will
people. make more resources available to Namibia.
◦ More climate finance: Namibia can SADC can also serve as a voice in the IMF
secure more climate finance under the and World Bank to advocate for better repre-
Bridgetown Initiative launched by Barba- sentation in these institutions. Currently, the
dian PM Mia Mottley in 2022. The Bridge- African countries are under-represented in
town Initiative is a major multilateral push the institutions and therefore their voices are
for financing and trade to support the no heard. They do not take part in decisions
shift towards low-carbon and resilient affecting them. Given Africa’s importance in
economies in the Global South. the world today, it has a lot to give and offer.
The G20 debt resolution framework should

3.3 Mobilizing additional be enhanced. It should be made simpler and
resources for Namibia’s structur- less cumbersome so that a growing number
of African countries can benefit from it. If the
al transformation
experience of Zambia is anything to go by,
reforming the framework would benefit
Given Namibia’s limited fiscal space, it has no
Namibia in the event of a debt crisis.
choice but to depend on external resources.
Unfortunately, both ODA and FDI have
Finally, Namibia should also intensify its
declined in recent years. Pursuing sound
efforts in domestic resource mobilization by
macroeconomic and governance policies can
introducing fiscal consolidation, improving
attract both ODA and FDI into the country.
public financial management, building fiscal
However, the country should also focus on
buffers, enforcing tax compliance, forging
domestic resource mobilization to supple-
public-private partnerships, and eliminating
ment external resources.
waste.
The country can leverage its natural resourc-
es to draw in additional finance. For example, 3.4. Dealing with Namibia’s
Namibia’s discovery of oil has the potential of debt
attracting FDI into the country. A number of
foreign companies have shown a keen Though it was expected that starting from
interest in oil drilling. This is likely to be a 2022, Namibia’s external debt would gradu-
game changer for the country, with oil ally decline as the economy recovered and
revenue estimated at trillions of US dollars. If the current account position would gradually
used judiciously, the Government will be able improve, the country’s gross external financ-
to finance its development without resorting ing needs are expected to remain significant
to external financing. as noted in Chapter 1. The Government
should adopt the following recommenda-
Credit rating agencies have had impact on tions: A series of measures should be taken
many African countries’ access to financing in to contain the country’s debt, including fiscal
international financial markets by giving more consolidation, the tax administration should
than warranted risk profiles. Namibia has be improved, a conservative borrowing policy
been no exception. For example, in May and fiscal rules should be adopted, and
2024, Fitch gave the country a stable outlook public financial management improved. This

will ensure debt sustainability. In addition, the and extent. Vision 2030 seeks to facilitate
Government should strengthen the gover- social inclusion by cultivating the spirit of
nance and management of the new sovereign togetherness for a prosperous and industrial-
wealth fund. Moreover, the resources ized Namibia. Gibson et al (2022) list the
borrowed should be utilized productively and drivers of this goal as follows: education,
invested in projects that produce fair returns. science and technology, health and develop-
The quality of public investments should also ment, sustainable agriculture, peace and
be enhanced. social justice, and gender equality. In support
for these drivers, a very comprehensive social
3.5 Financing climate action protection system provides for social assis-
tance, such as cash transfers, to the most
Namibia will need about USD 5.3 billion over vulnerable groups, and social insurance for
the 2021-2030 period to meet its climate public sector workers. The social protection
change targets and an average of USD 565 system has helped to reduce poverty and
million annually to achieve its green growth unemployment over time despite the latter’s
objectives. The private sector needs to play a persistence.
more prominent role in closing the climate
finance gap given the limited fiscal space, with Namibia’s initial NDC submission in 2015
the Government’s budget further constrained committed to reduce economy-wide GHG
by the adverse impact of external shocks on emissions by 89% by 2030 under the BAU
the economy. Several solutions to leverage baseline. In its 2021 NDC submission, Namib-
opportunities for private sector investments in ia increased this goal to 91%. This commit-
green growth and reduce obstacles are ment keeps Namibia on its low carbon path
hereby proposed as follows: (i) accelerate the as it is already a net sink of GHG emissions.
doing business reforms for a conducive The mitigation target is to reduce GHG emis-
private sector investment environment, sions conditionally by 14% (under limited
including measures to sustain macroeconom- domestic and international support) and by
ic stability; (ii) tap into emerging innovative about 77% (with substantial international
private sector financing mechanisms and support) by 2030. Namibia’s 2021-2030
enhance engagement with multilateral green updated NDC Implementation Strategy and
finance institutions for an expanded pool of Action Plan replaces the National Climate
sustainable finance instruments; (iii) increase Change Strategy and Action Plan 2013-2020.
private sector representation in the existing Priority areas for NDC adaptation are water
national coordination structures for green resources, agriculture, forestry, coastal
growth; and (iv) enhance green growth skills zones, tourism, human health, and disaster
and capacity, particularly by mainstreaming risk management. To achieve the updated
green skills development into education NDC targets, Namibia will need approximately
curricula. USD 5.3 billion over 10 years, of which about
10% will be unconditional, provided mainly
The country’s national synergies relating to from domestic public funds. Ninety percent is
climate change provide overarching guidance therefore conditional upon the provision of
to develop and implement appropriate strate- international support. The Government has
gies to reduce Namibia’s vulnerability to demonstrated its political commitment to
climate change and integrate climate change tackling climate change. The climate change
effectively into existing legal frameworks. The unit within the Ministry of Environment,
guidance aims at enhancing capacities at all Forestry and Tourism (MET) is responsible for
levels, ensuring successful implementation of tracking NDC implementation progress. The
climate change response activities, and MET also serves as the approver/focal point
facilitating climate proof development to to the United Nations Framework Convention
reduce the climate change impact magnitude on Climate Change (UNFCCC), and as the

National Designated Authority to the Green reduce Namibia’s dependence on external
Climate Fund (GCF). One major achievement flows which have been highly volatile, and
has been the establishment of the Environ- allow the Government greater flexibility in
mental Investment Fund of Namibia (EIF) designing and controlling its development
which is playing a pivotal role in the mobiliza- agenda. It would also create a conducive
tion of funds from the GCF. The EIF has environment for foreign investments, enhance
partnered with the United Nations Develop- national ownership over development
ment Programme to support the acquisition processes, and strengthen the bonds of
of supplementary grant funding. accountability between governments and
their citizens (UNCTAD, 2005). Indeed,
3.6 Conclusions and Recom- domestic resource mobilization provides
mendations developing countries, such as Namibia, with
adequate policy space which is often
The following recommendations are constrained under the terms and conditions
proposed for the short, medium and long associated with external resources.
terms:
Creating an enabling environment is
Short term crucial for attracting and scaling up exter-
nal financial flows as complementary
Reducing debt burdens through governance sources of financing: Namibia has imple-
reforms to strengthen debt management mented key reforms, including enactment of
capacity: The Government should adopt a the Business and Intellectual Property Bill
conservative borrowing policy and fiscal (BIPB), the Industrial Development Agency
rules. This will avoid over- expenditure and Bill, and the Public Private Partnership (PPP)
control the debt. Bill. The BIPB mainly provides for an online
business registration and licensing platform,
Policies for the medium to long term known as the Integrated Customer Service
Facility, and a “One-Stop-Shop” for investors.
Reforming the current global financial archi- The GRN has also embarked on various
tecture to make it meet African countries’ policy initiatives for small and medium-sized
financing needs: Namibia has a financing gap enterprise(SME) development to drive indus-
of USD 9.429 billion to achieve the SDGs by trialization and job creation; the initiatives
20230. The current global financial architec- include the approval of the SME Policy and
ture constrains Namibia to fill this gap. the SME financing Strategy. However,
Namibia is disadvantaged in terms of access- Namibia needs to deepen regulatory reforms
ing concessional funds, given the current the to improve the investment climate, while
global financial architecture. Consequently, promoting local entrepreneurship to advance
there is need to overhaul the aid and private private sector development.
finance architecture. For example, MDBs
should continue to provide concessional Accelerating structural transformation
financing to countries like Namibia that have efforts and financing its implementation
not graduated to high income status, since will be key to unlocking Namibia’s devel-
many of them continue to be vulnerable to opment potential: Structural transformation
shocks such as COVID-19 and commodity can be accelerated through private capital
price volatilities. The country could also bene- inflows such as FDI and ODA. It can also be
fit from a global stance against illicit financial enhanced through improvements in produc-
flows. tivity. In this regard, investment in research,
innovation, human capital, and technology
Scaling up domestic resource mobiliza- would be necessary.
tion: Domestic resource mobilization would

REFERENCES
African Development Bank, 2020-2024 Country Strategy Paper, Namibia, 2020.

African Development Bank, Country Diagnostic Note, April 2024.
African Development Bank, African Economic Outlook 2024.
Bertinnelli and Black, Urbanization and Growth, 2004.
Boyce and Ndikumana, Capital flight from Africa: Measurement and Drivers, 2012.
Central Bank of Namibia, Quarterly Economic Brief.
Central Bank of Namibia, Monthly Economic Outlook.
Gollin and Black, Agricultural Productivity Differences across Countries, 2013.
IMF (2020), “Update on the Joint IMF-WB Multipronged Approach to Address Debt Vulnerabili-
ties.” Policy Paper No. 2020/066.
IMF (2023), “Making Public Debt Public—Ongoing Initiatives and Reform Options”, Policy Paper
No. 2023/034, IMF Policy Papers.
IMF (2024). “Policy reform proposals to promote the Fund’s capacity to support countries
undertaking debt restructuring”, IMF Policy Paper.
IPCC, Fifth Assessment Report, 2014.
Republic of Namibia, Finscope Consumer Survey, 2023.
Szirmai, Adam, Industrialization as an engine of growth in developing countries, 1950–2005,
2012
World Bank, Development Indicators, 2020.
https://www.ipc-undp.org/pub/IPCWorkingPaper127.pdf
UN Habitat, Towards a new urban agenda, 2016.

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COUNTRY FOCUS REPORT 2024

Groupe de la Banque africaine de développement

© African Development Bank 2024

COUNTRY FOCUS REPORT 2024 - NAMIBIA 3

CHAPTER 1 : MACROECONOMIC PERFORMANCE AND OUTLOOK 11

CHAPTER 2 : TAKING STOCK OF NAMIBIA’S STRUCTURAL TRANSFORMATION PROGRESS 17

2.5.1 The role of the Government 29

CHAPTER 3 : FINANCING STRUCTURAL TRANSFORMATION IN NAMIBIA: 34

COUNTRY FOCUS REPORT 2024 - NAMIBIA 5

COUNTRY FOCUS REPORT 2024 NAMIBIA 7

COUNTRY FOCUS REPORT 2024 - NAMIBIA 9

10 COUNTRY FOCUS REPORT 2024 - NAMIBIA

COUNTRY FOCUS REPORT 2024 - NAMIBIA 11

12 COUNTRY FOCUS REPORT 2024 - NAMIBIA

1.3.2 Fiscal policy – public debt downgraded Namibia’s rating to B1 in April

COUNTRY FOCUS REPORT 2024 - NAMIBIA 13

Total population (Millions) 2.4 2.5 2.5 2.6 2.6

Life expectancy at birth (years) 63.1 62.8 59.3 58.1 59.5

1.3.4 Social developments ate downwards in 2025. Secondary industries

Real GDP is projected to decline to 3.3% in 1.4.2 Risks

14 COUNTRY FOCUS REPORT 2024 - NAMIBIA

COUNTRY FOCUS REPORT 2024 - NAMIBIA 15

16 COUNTRY FOCUS REPORT 2024 - NAMIBIA

COUNTRY FOCUS REPORT 2024 - NAMIBIA 17

Source: AfDB, Statistics Department.

18 COUNTRY FOCUS REPORT 2024 - NAMIBIA

lesotho Namibia Botswana Africa

Source: AfDB, Statistics Department.

COUNTRY FOCUS REPORT 2024 - NAMIBIA 19

Relative fcator Porductivity Employment Shares

Source: AfDB, Statistics Department.

Figure 2.4: Sectoral Employment Shares 2011-2021

Source: AfDB, Statistics Department.

20 COUNTRY FOCUS REPORT 2024 - NAMIBIA

COUNTRY FOCUS REPORT 2024 - NAMIBIA 21

Source: AfDB, Statistics Department.

Box 2.1: Successful experiences in supporting growth and structural transformation

Source: Ministry of Trade, Namibia

22 COUNTRY FOCUS REPORT 2024 - NAMIBIA

Rankings for Namibia (2019–2021)

Year GII Innovative inputs Innovative inputs

2021 110 88 110

2020 104 101 104

2019 101 99 103

COUNTRY FOCUS REPORT 2024 - NAMIBIA 23

Box 2.2: Potential and existing opportunities in Namibia

Preferential access to markets: Namibia’s membership of SACU, COMESA and

Source: AfDB, CSP 2020-2024

2.3.5 Key bottlenecks to fast-paced modern manufacturing and improve low

24 COUNTRY FOCUS REPORT 2024 - NAMIBIA

COUNTRY FOCUS REPORT 2024 - NAMIBIA 25

Figuer 2.6: Fianicng Needs and Gaps

Source: AfDB, Statistics Department.

26 COUNTRY FOCUS REPORT 2024 - NAMIBIA

Source: AfDB, ECMR

Box 2.3: Bank support for Namibia’s structural transformation

COUNTRY FOCUS REPORT 2024 - NAMIBIA 27

28 COUNTRY FOCUS REPORT 2024 - NAMIBIA

COUNTRY FOCUS REPORT 2024 - NAMIBIA 29

As specialized institutions, DFIs have provid-