Business Reporter
IN the first quarter of 2025, Namibia’s economy expanded by 2.7% year-on-year in real terms, marking the 16th consecutive quarter of economic growth, although this was a slowdown from the 4.8% recorded in the same quarter of 2024.
In nominal terms, GDP stood at N$62.4 billion, an increase of N$4.0 billion from the N$58.5 billion registered a year earlier.
Junior Economist from Simonis Storm Securities, Almandro Jansen, explained that while the overall trend reflects a continued recovery, growth momentum has moderated due to contractions in the primary and secondary sectors. Nevertheless, Jansen said that robust performance in the services sector provided critical support to headline growth.
The primary industries contracted by 3.1% in real value added, driven largely by a 20.1% decline in agriculture and forestry and an 8.7% decline in fishing and fish processing on board.
Jansen added that agricultural activity was severely impacted by drought conditions and the outbreak of Lumpy Skin Disease, which led to sharp declines in cattle marketing and live animal exports.
Secondary industries recorded a year-on-year decline of 0.7%, primarily due to a 1.7% contraction in manufacturing. Several subsectors, including grain milling, meat processing, and fish processing onshore, registered significant declines. However, select industries such as basic non-ferrous metals, leather products, and rubber and plastic goods saw notable growth.
Tertiary industries remained the main driver of economic growth, expanding by 5.1% in the first quarter of 2025, compared to 4.8% in the same period the previous year. The health sector led the way with an 11.4% increase, driven by a rise in public health personnel. Wholesale and retail trade also performed well, growing by 6.5%, supported by higher consumer activity. Financial services rose by 6.0%, buoyed by growth in both banking and insurance, while administrative and support services increased by 5.7%.
Jansen opined that the release of Q1 GDP figures showing real growth of 2.7% prompted Simonis Storm to revise their full-year forecast from 3.8% to 3.3%.
“This revision isn’t just about numbers. It reflects a more measured view of the evolving risks and limitations across key sectors, and the realities of how quickly policy intentions can translate into economic outcomes. From where we stand, three forces are shaping this year’s outlook: a cautiously accommodative monetary environment, uneven sectoral momentum, and the state’s infrastructure-led fiscal stance. Following 75 basis points of rate cuts in 2024, we now expect a further 25bp reduction by the end of 2025, bringing the repo rate to 6.50%. This would offer breathing room for consumers and businesses alike, but transmission will take time. Liquidity is improving, but credit demand remains uneven. Inflation remains contained for now, but any shocks to food or fuel prices could shift that narrative,” Jansen said.
He added that in the real economy, services are doing much of the heavy lifting.
“We believe tourism is on track for a 5.5% expansion, with N$4.6 billion in revenue projected, thanks to aggressive marketing and improving international air access. Agriculture remains the economy’s biggest vulnerability. The 20.1% contraction in Q1 is a stark reminder of our climate exposure. Productivity is low, financing remains constrained, and the sector still lacks a coherent national adaptation plan. Without urgent reforms, agriculture will continue to be a drag on inclusive growth and food security,” Jansen said.
He concluded that externally, the risks are rising.
“Geopolitical flare-ups could push up fuel costs and destabilise trade routes. Protectionism is back on the agenda in major markets, and Namibia must position itself as a reliable, rules-based trading partner. At the same time, China’s gradual recovery offers upside for our minerals but it’s no guarantee. The global environment will remain fragile, and we must stay agile. All things considered, we remain cautiously optimistic. The fundamentals are not broken but they are being tested. Namibia has a window of opportunity to pivot from cyclical recovery to structural transformation. But doing so will require more than just spending and hoping. We need execution discipline, policy credibility, and a willingness to make hard reforms, especially in land, SOEs, energy, and trade facilitation. 2025 may not be the breakout year we once hoped for, but it can still be the year we build the foundation for one,” Jansen said.
