Namibia has projected a modest improvement in economic growth alongside a gradual narrowing of its fiscal deficit, as authorities seek to stabilise public finances amid fluctuating global commodity prices and rising development needs.
Presenting the national budget on Thursday, Finance Minister Ericah Shafudah said the southern African country’s economy is expected to expand by 3.1 percent in 2026, slightly higher than the 2.9 percent growth recorded in 2025.
The projected expansion reflects resilience in Namibia’s mining sector, particularly gains from gold and uranium exports, which have partly offset revenue losses caused by weaker global diamond prices traditionally one of the country’s most important sources of foreign exchange earnings.
Namibia’s public finances have faced mounting pressure in recent years due to external shocks, subdued commodity performance, and increased government spending aimed at supporting economic recovery and infrastructure development. The decline in diamond prices has weighed heavily on fiscal revenues, underscoring the economy’s continued vulnerability to global commodity cycles.
Despite these challenges, the government expects fiscal consolidation measures to gradually improve budget performance. The overall budget deficit is forecast to narrow to 5.5 percent of gross domestic product (GDP) in the fiscal year beginning April 1, compared with 6.6 percent of GDP in the current financial year.
According to the finance ministry, continued expenditure controls, improved domestic revenue mobilisation, and economic recovery are expected to support further reductions in the deficit over the medium term. Authorities aim to lower the fiscal gap to 3.8 percent of GDP by the 2027/28 fiscal year and further to 3.3 percent in 2028/29.
Government debt remains a key concern for policymakers. Total public debt is projected to rise to 65.2 percent of GDP during the upcoming fiscal year before stabilising at approximately 67.5 percent over the government’s medium-term expenditure framework.
Shafudah said the administration’s longer-term objective is to gradually reduce the debt-to-GDP ratio to about 60 percent, a level viewed as more sustainable for maintaining investor confidence and preserving fiscal space for development spending.
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Economic diversification remains central to Namibia’s long-term strategy, with authorities increasingly looking beyond traditional mining revenues. The country has attracted significant international interest following major offshore oil discoveries in recent years, raising expectations of a potential transformation of its relatively small economy.
The government is targeting first crude oil production by 2030, a milestone officials believe could significantly boost revenues, strengthen external balances, and create employment opportunities if managed effectively.
Analysts caution, however, that translating oil discoveries into broad-based economic gains will depend on sound governance, investment in infrastructure, and prudent fiscal management to avoid overreliance on resource income.
In the near term, Namibia’s growth outlook will continue to depend largely on commodity market performance, global demand conditions, and domestic reform efforts aimed at improving productivity and private sector participation.
The budget signals authorities’ intention to strike a balance between fiscal consolidation and economic growth, while safeguarding social spending and development programmes in a challenging global economic environment.
As Namibia advances its fiscal adjustment plans, policymakers face the task of strengthening economic resilience while preparing the groundwork for a potential energy-driven expansion later in the decade.
