• Bank of Namibia has lowered its 2026 growth forecast to 2.6% from 3.8%.

• Weak performance in mining, especially metals and diamonds, is driving the downgrade.

• External shocks, including global demand trends and regional risks, continue to weigh on the economy.

The Bank of Namibia has revised downward its economic growth outlook for 2026, forecasting expansion of 2.6% compared with 3.8% previously estimated in its December outlook update, according to its latest report published on Monday, April 13.

The report attributes the downgrade to weaker-than-expected performance in primary industries, particularly a sharp contraction in metallic mineral production and a continued decline in diamond mining.

An Economy Weakened by External Shocks

“Despite downward revisions compared with the December 2025 economic outlook update, growth in 2026 and 2027 remains moderate, driven primarily by the expected expansion of the secondary and tertiary sectors,” the report said. These sectors include construction, electricity and water, wholesale and retail trade, financial services, as well as public administration and defense.

According to the International Monetary Fund, Namibia’s economy continues to face pressure from declining global demand for diamonds, while the country remains heavily dependent on natural resources. The economy is also experiencing slower livestock restocking following losses caused by the 2024 drought.

Moreover, ongoing conflicts in the Middle East are driving higher fuel prices and weakening global demand. At the same time, outbreaks of foot-and-mouth disease in neighboring countries are posing risks to livestock production and export revenues.

In this context of vulnerability to external shocks, the IMF is recommending stronger fiscal consolidation. The institution is calling for tighter control over current spending, including goods and services expenditure, to limit further increases in public debt.

Namibia has been implementing macroeconomic reforms in recent years to stabilize its economy. In the 2025/2026 national budget, estimated at 106.3 billion Namibian dollars ($6.5 billion), authorities are prioritizing economic development, security, infrastructure and social protection.

Looking ahead, the Bank of Namibia expects a slight recovery in growth to 2.9% in 2027.

Lydie Mobio