Namibia’s vital diamond industry, a cornerstone of state revenue and economic development, faces a severe double blow from the global surge in laboratory-grown diamonds and newly imposed punitive US tariffs, Deputy Minister of Industries, Mines and Energy, declared at a high-level ministerial roundtable in Luanda last week. Her stark assessment underscores a period of significant economic vulnerability for the nation, as diamond contributions to GDP plummet and a key export market erects costly new barriers.
Addressing fellow diamond-producing nations, Deputy Minister Kröhne reaffirmed Namibia’s commitment to the ethical and responsible natural diamond sector, a source of “national pride” contributing 6.3% to GDP in 2023 and serving as a crucial pillar for public investment in infrastructure, education, healthcare, and social protection. She highlighted the nation’s successful transformation since the 1999 Diamond Act, evolving from a rough diamond exporter to a globally recognised hub for high-value gem-quality stones, integrated local cutting, polishing, manufacturing, and branding – enhancing value retention and creating skilled employment.
However, Kröhne painted a sobering picture of the current economic reality. “The large-scale producers and the entire diamond industry in Namibia has been significantly impacted by the economic downturn, driven largely by the rise of lab-grown diamonds and the resulting decline in diamond prices,” she stated. This pressure has translated directly into a dramatic fall in government revenue. Illustrating the severity, she cited Debmarine Namibia, a major offshore producer: while contributing nearly N$6 billion to state coffers in early 2023 thanks to its fully operational Benguela Gem vessel, revenues collapsed to just over N$2 billion by mid-year as the diamond market weakened. Kröhne cautioned that this lower contribution level is expected to persist through 2025, with only a modest increase in 2026. A return to the robust 2023 revenue levels is not anticipated before 2027, signalling a protracted period of fiscal constraint for the Namibian government.
Compounding this existing crisis, Kröhne identified a new and immediate threat: the newly announced US Executive Order of 2 April 2025. This order imposes broad tariffs, including a reciprocal 21% duty on Namibian mineral exports – crucially encompassing diamonds – entering the significant US market. “Such tariffs are likely to reduce Namibian exports, create market imbalances and introduce new volatility in global trade, particularly in the natural diamond sector,” Kröhne warned. The tariffs directly threaten the competitiveness of Namibian diamonds in a major consumer market, potentially accelerating the revenue decline already caused by lab-grown competition.
Furthermore, the Deputy Minister expressed deep concern that these US tariffs, and the broader trade environment they represent, jeopardise the potential renewal of the African Growth and Opportunity Act (AGOA). AGOA has historically provided vital non-reciprocal market access for African nations, including Namibia, into the US. Its erosion or non-renewal would represent a further, long-term setback for Namibian export diversification and economic growth beyond the diamond sector.
In response to these multifaceted challenges, Kröhne outlined Namibia’s strategy. Domestically, the government, through the Diamond Board of Namibia, continues to aggressively promote the unique value proposition of Namibian natural diamonds – emphasising their rarity, authenticity, ethical sourcing verified through blockchain technology at the Namibia Diamond Trading Company, and positive community impact. Internationally, she reaffirmed Namibia’s commitment as a founding member of the Kimberley Process to uphold the highest standards preventing conflict diamonds and ensuring legitimacy and transparency. Crucially, Kröhne stressed the urgent need for solidarity and coordinated action among diamond-producing nations. She noted “encouraging developments,” specifically mentioning the De Beers Group CEO’s ongoing dialogue with US authorities aimed at securing a zero-tariff arrangement for diamond imports, a move Namibia strongly supports.
The Namibian government, Kröhne declared, “remains open to bilateral and multilateral dialogue to strengthen trade partnerships and ensure mutually beneficial outcomes.” This dialogue must address not only the immediate tariff crisis and AGOA’s future but also the fundamental challenges of equitable global trade practices, sustainability, ethical sourcing, and the existential competition posed by laboratory-grown diamonds. The Deputy Minister’s statement serves as a stark economic alert: Namibia’s prized diamond sector, a key economic engine, is under unprecedented pressure, demanding innovative domestic strategies and resolute international cooperation to secure its future and protect the national revenue stream it generates. The path to recovery, projected to begin only tentatively in 2026, appears fraught with significant hurdles, both man-made and market-driven.