Namibia’s economy has grown by about N$80 billion in five years, lifting total output to N$270 billion and giving the government more revenue to work with.
But that growth is now running up against rising budget pressure and slow job creation.
President Netumbo Nandi-Ndaitwah has noted that tax revenue increased from N$55 billion to N$76 billion over the same period, keeping Namibia’s tax-to-GDP ratio at 30.5%, which is one of the highest in Africa.
“Through prudent policies and strategic investments, government continues to lay a solid foundation for sustainable economic growth and shared prosperity,” the President said in her state of the nation address last week.
The figures point to a stronger fiscal position, but they also expose a growing strain.
The government is collecting more, yet the demands on that money are rising even faster. Health, education and infrastructure continue to absorb large portions of the budget, forcing difficult trade-offs.
“The government faces fiscal pressures and competing budget priorities,” said Nandi-Ndaitwah.
At its core, the challenge is not just how much the economy is growing, but how it is growing. Expansion remains heavily driven by mining and other primary sector industries that generate high export earnings but relatively few jobs and are vulnerable to global price swings.
“The economy’s ongoing reliance on primary sectors highlights the need to improve economic diversification efforts,” Nandi-Ndaitwah said.
In the 2025/26 financial year, mining generated more than N$64.7 billion in export earnings and N$1.4 billion in royalties, while creating 580 jobs, a reminder of the sector’s strength, but also its limits in absorbing the labour force.
The structure of the sector is also shifting. Uranium and gold have overtaken diamonds as key contributors, supported by strong global demand, while diamond prices have come under pressure from the rise of lab-grown alternatives.
Namibia’s decision to sign the Luanda Accord at the 2026 Investing in African Mining Indaba reflects efforts to protect the natural diamond market and sustain its value.
Government is now pushing to extract more value from its resources. Plans are underway to develop a minerals beneficiation policy and to review the Prospecting and Mining Act of 1992.
A study on the sustainable use of critical minerals is also in progress.
The aim is to move beyond exporting raw materials to producing higher-value goods that can create more jobs and stabilise income.
However, internal constraints continue to slow that transition.
Capacity gaps, delays in implementing reforms and digital systems, and skills shortages remain key obstacles.
Moreover, the President said strengthening institutions and investing in skills and technology will be critical to unlocking growth.
The Bank of Namibia has reinforced this outlook in its latest reports and repo rate decisions, warning that while growth is holding, it is not yet resilient.
The central bank has cautioned that reliance on commodity exports leaves the economy exposed to external shocks and has stressed the need for fiscal discipline and structural reforms.
It has also highlighted the importance of balancing growth with price stability, ensuring inflation remains contained while supporting economic activity.
Figures from the Namibia Statistics Agency (NSA) show that growth is uneven across sectors, with limited job creation despite the expanding economy.
This means the economy is getting bigger, but not broad enough to lift employment at the same pace.
In practical terms, it is like a business increasing its turnover without hiring more staff revenue rises, but the benefits do not spread widely. Growth alone is no longer enough.
What matters now is how that growth is structured, how many jobs it creates, and how resilient it is to global shocks.
“The government remains dedicated to tackling these challenges to create a more resilient, inclusive and future-ready economy,” President Nandi-Ndaitwah added.