Business Reporter
“Inflation remains a thorn in the side of policymakers in 2025. In February, it ticked up to 3.6% from 3.2% in January, mainly driven by rising costs of food, transport, and non-alcoholic beverages. Housing inflation has cooled, but price pressures persist, and we expect inflation to average 4.8% this year, assuming external conditions stay relatively stable. But that’s a big assumption. Global trade tensions, a volatile rand, and climbing import costs are making inflation a trickier beast to tame,”.
The above are the words of Economic analyst Almandro Jansen from Simonis Storm Securities, local equities and wealth management firm, which delved into a review of the inflation statistics for February 2025.
Giving a background he added that Namibia’s annual inflation rate edged up to 3.6% in February 2025, from 3.2% in January, but remains well below the 5.0% recorded a year ago.
“This continued moderation reflects easing price pressures across key expenditure categories, particularly transport, housing and utilities, and food and non-alcoholic beverages, which remain the primary drivers of inflation. While the annual trend points to a slowdown in price increases, monthly inflation came in at 0.4%, down from 1.1% in January 2025. The softer monthly increase is largely attributed to stabilizing global supply chains and some relief in fuel prices, even as food price volatility continues to impact consumers. Additionally, the effects of monetary policy easing in 2024 continue to support a broader disinflationary trend, reinforcing stability in price levels,” Jansen said.
He added that Transport, Food, and Housing The transport sector, particularly fuel prices, saw a sharp decline in its inflation rate, dropping from 6.1% in February 2024 to just 1.3% in February 2025. This shift reflects lower global fuel costs amid improved supply conditions and a stable exchange rate environment.
Food and non-alcoholic beverages, however, remain a persistent inflationary force, with prices rising 5.9% year-on-year in February 2025, compared to 5.8% a year prior. Key contributors include bread and cereal products, meat, and fruit, with notable price increases in beef, maize meal, and bananas.
Looking ahead, Jansen said that price volatility in essential food categories could persist, with weather-related disruptions and fluctuating import costs posing further risks to price stability.
“These factors are particularly concerning for lower-income households, which allocate a significant portion of their income to food expenditures. Close monitoring of global and domestic supply dynamics will be crucial in assessing the trajectory of food inflation and potential affordability challenges in the months ahead,” Jansen said.
He added that Namibia’s food inflation is directly tied to the rand and South African imports, and any currency depreciation or supply shocks could filter through to local prices in the months ahead.
“The fuel price hike in March is set to push transport inflation up by another 1.0% m/m, marking the second straight month of rising fuel-related costs. This isn’t just about petrol—it feeds into logistics and freight costs, which could drive up retail prices across multiple sectors. With global oil prices still volatile, and a real possibility of further fuel levy increases, we don’t see transport inflation easing anytime soon,” Jansen said.
He added for now there is now quick fix to underlying pressures.
“Protectionism is back in full swing, and Namibia will feel the impact. US tariffs on Chinese goods, supply chain bottlenecks, and rising global shipping costs are already pushing up import prices, particularly for fuel, machinery, and consumer goods. In our view, this is one of the biggest risks to inflation staying higher for longer. Namibia’s currency moves with the rand, and right now, a weaker rand means higher import costs. If SARB holds off on rate cuts, we could see more currency pressure, keeping inflation elevated well into the year. Simply put: if the rand weakens further, Namibia’s inflation outlook worsens,” Jansen said.
He concluded that as we push further into 2025, Namibia’s monetary policy remains a fine balancing act—supporting economic growth without losing sight of financial stability in a world that’s growing more unpredictable by the day.
“The Bank of Namibia (BoN) has kept the repo rate at 6.75%, holding the prime lending rate steady at 10.75%. It’s a measured stance—not too tight, not too loose—giving the economy room to breathe while keeping inflation in check,” Jansen concluded.
Picture for illustrative purposes only.
