Namibia’s overall investment climate is improving, but the lack of growth in non-mining sectors poses a long-term risk to employment and economic stability, economist Rowland Brown warned on Friday.

Namibia’s mining sector is a cornerstone of its economy, contributing about 50% of merchandise exports and 12% of Gross Domestic Product (GDP), driven by diamonds, uranium, gold, zinc, copper, lithium and rare earth minerals.

Speaking at the Enhancing Namibia’s Competitiveness Through Ease of Doing Business Seminar, Brown said fixed capital investment spending on long-term assets such as factories and mines has shown positive momentum since 2020.

“This is the good type of investment. It creates jobs, pays taxes and stimulates broader economic activity. After years of stagnation, we have started to see a real upswing. Foreign direct investment (FDI) has also rebounded strongly after a sharp decline beginning in 2015, a period he linked to “policy uncertainties,” he said. 

Brown noted that this resurgence in FDI, particularly in onshore mining and oil and gas, is a positive signal for the country’s business climate. However, he cautioned that the picture is less encouraging when mining is excluded. 

“If you strip out mining, the trajectory is very worrying. In recent years, net fixed capital investment outside the mining space has effectively been zero. We’re only replacing existing assets, not creating new ones,” he said. 

This trend, he explained, means that Namibia’s non-mining industries are not expanding capacity in ways that generate employment. “Sustaining investment at this level often means investing in technology that replaces labour rather than creating new jobs,” Brown added. Speaking at the event, chairperson of the Forum of German-speaking Namibians Harald Hecht said the country’s independent judiciary, peaceful political transitions and elections remain some of Namibia’s strongest drawcards for foreign investors. He pointed out that investment interest is particularly strong in renewable energy and oil and gas projects, sectors that Namibia is positioning as future economic drivers.

“Namibia is seen as a stable, peaceful country. With two wars underway in Europe, many are looking to us as a haven for long-term investments,” he said. 

The seminar, described as the first in a series of dialogues, seeks to lay the groundwork for a common vision on how Namibia can improve its ease of doing business and unlock greater investment opportunities.

Key investment interest lies in renewable energy, oil, and gas projects, according to Hecht, with the Namibia Investment Promotion and Development Board (NIPDB) dedicating significant capacity to these sectors. However, interest is also growing in other industries as European investors seek to diversify amid global instability. -pmukokobi@nepc.com.na