The roaring conveyor belts in Namibia’s mines tell a story of booming exports and headline GDP growth. But the silence falling over factories from Windhoek to Walvis Bay reveals a more troubling truth about the real state of the nation’s economy. New data exposes an alarming hollowing-out of Namibia’s industrial base, threatening long-term job creation and economic sovereignty.
According to the Economic Association of Namibia’s (EAN) latest Quarterly Review, the manufacturing sector contracted by a devastating 9.7% in the second quarter of 2025. This isn’t merely a slowdown; it is the most severe deterioration among all secondary sectors, a stark reversal from the modest 1.2% growth recorded a year prior. Output plunged across critical areas including cement, copper, beverages, and the once-bright diamond polishing industry.
This collapse has slashed manufacturing’s share of the national GDP from 11.5% to just 9.5%, cementing a dangerous trend of “re-primarisation.” While the mining and quarrying sector’s share surged to 17.4% on the back of a uranium and gold boom, the economy is becoming dangerously lopsided. Namibia is increasingly a dig-and-ship economy, exporting raw materials while its capacity to add value and create stable jobs withers.
“The declining share of manufacturing indicates a weakening industrial base, which is vital for value addition, skills development, and economic resilience,” the EAN report warns. It paints a picture of an economy consolidating around a primary sector boom while its foundational industrial pillars erode. This imbalance, experts caution, makes the nation profoundly vulnerable to global commodity price swings and fails to solve the entrenched unemployment crisis.
The human cost of this industrial retreat is already being felt. For every percentage point drop in factory output, fewer opportunities are available for urban workers. This manufacturing slump directly undermines the nation’s ambitious employment targets outlined in the Sixth National Development Plan (NDP6), which aims for the sector to employ 70,000 people and contribute 18% to GDP by 2030. At its current trajectory, the nation is moving backwards, not forwards.
“Headline growth is modest, and the benefits are concentrated in sectors that are not labour-intensive,” the EAN states, highlighting the core of the problem. The mining boom boosts national revenue but creates far fewer jobs per dollar of output than a robust manufacturing base.
So, what is to be done? The EAN does not merely diagnose the disease; it prescribes a detailed treatment plan. The think tank calls for nothing short of a strategic industrial policy renewal, moving beyond rhetoric to actionable interventions.
The first prescription is targeted industrial support. The report urges policymakers to directly address the specific constraints crippling factories, though it stops short of detailing specific subsidies. This involves creating a more conducive operating environment where manufacturers can thrive without being hamstrung by bureaucratic and financial barriers.
A central pillar of the proposed solution is the strategic channeling of mining windfalls. The EAN proposes that the substantial revenues generated from the booming uranium and gold sectors be deliberately invested into future-proofing the economy. This means using resource wealth to build a more resilient, diversified economic structure rather than perpetuating dependency.
Specifically, the report advocates for the creation of industrial zones and special economic areas. These zones would offer manufacturers fiscal incentives and, critically, reliable utilities, addressing key cost and operational hurdles. The goal is to create clustered ecosystems where industries can benefit from shared infrastructure and synergies.
To unlock the power of the private sector, the EAN emphasizes fostering strategic partnerships. This involves actively facilitating joint ventures between large mining companies and local Namibian firms, promoting skills partnerships with the private sector, and supporting SME integration into industrial supply chains. The aim is to ensure that the capital and expertise from the extractive sector spill over into the broader economy.
Furthermore, the report identifies a critical need to expand affordable credit to productive sectors. While the Bank of Namibia has maintained an accommodative repo rate of 6.75%, credit growth to businesses, particularly in high-impact sectors like manufacturing, remains insufficient. The EAN suggests enhancing credit guarantees and developing blended finance instruments to de-risk lending to manufacturers and SMEs.
The urgency of this manufacturing revival is amplified by other economic pressures. Households are already straining under rising food and housing inflation, with the average grocery basket cost climbing to N$1,102.50. A weak manufacturing sector translates into fewer jobs and less disposable income, creating a vicious cycle that dampens domestic demand and further hurts local producers.
The nation’s recent reclassification by the World Bank to a lower-middle-income country adds another layer of impetus. This shift, framed by the EAN as a strategic opportunity, could unlock concessional financing. Such funding must be strategically deployed to resuscitate the industrial base, focusing on areas like agro-processing and green manufacturing that align with both development and environmental goals.
The path forward is clear. Namibia stands at a critical juncture where it must choose between short-term mineral riches and long-term, inclusive prosperity built on a diversified economy. The solutions, as outlined by the country’s leading economic thinkers, are on the table. The question now is whether there is the political will and execution discipline to stop the rot and rebuild the foundation of a modern, resilient Namibian economy—one that makes things, adds value, and provides jobs for its people. The silence in the factories is a call to action that can no longer be ignored.