Growth in key mining industries in Namibia is estimated to decrease in 2024 mainly due to a myriad of issues including low production, water interruptions and declining international prices.
According to the Bank of Namibia, growth for diamond mining is estimated to decrease significantly in 2024, partly dampened by low production on the back of declining international prices.
“The diamond mining sector is expected to slow to 2.1 percent growth in 2024 before rebounding to 5.7 percent in 2025. The anticipated significant slowdown in diamond mining is attributed to low production on the back of unfavourable international prices coupled with subdued global demand for rough diamonds. The latest projection represents a downward revision of 7.6 percentage points on 2024 growth and an upward revision of 7.4 percentage points for the 2025 growth,” says Bank of Namibia.
Equally, growth for uranium mining is expected to slow in 2024 before improving in 2025. The uranium mining sector is expected grow by 3.6 percent in 2024, down from a robust growth of 24.5 percent in 2023.
“Despite increased spot prices, the sector is expected to experience water supply interruptions, resulting in uranium mines adjusting their production downwards, coupled with anticipated stripping activities at some of the mines. The latest growth forecast reflects an upward revision of 0.6 percentage point and 7.8 percentage points for 2024 and 2025 compared to the December 2023 Economic Outlook update,” explains Bank of Namibia.
The metal ores sub-sector is also projected to contract in 2024 and 2025. The metal ores sector is expected to contract by 3.5 percent and 0.6 percent in 2024 and 2025, respectively, from a robust growth of 33.7 recorded in 2023.
“The expected contraction in 2024 and 2025 is mainly on account of depletion of ores from the gold sub-sector. The latest projections reflect a downward revision of 11.1 percentage points in 2024 and 4.4 percentage points in 2025.”
Growth for other mining and quarrying (which include oil exploration) is expected to moderate but remain robust during 2024. The other mining and quarrying subsector is expected to grow by 8.7 percent and 4.4 percent in 2024 and 2025, respectively, a significant reduction from growth of 37.2 percent registered in 2023. The anticipated slowdown in 2024 is on account of base effects following intensive oil exploration and drilling in the previous years. These projections reflect an upward revision of 3.7 percentage points in 2024 and 0.3 percentage points in 2025.
Overall, growth amongst primary industries is expected to decelerate in 2024 before rising in 2025. Primary industries are projected to grow by 1.7 percent and 4.5 percent in 2024 and 2025, following a higher growth of 9.7 percent in 2023. The subdued growth forecasted for 2024 stems from a deceleration observed across various mining subsectors, compounded by ongoing downturn in crop farming activities. The latest projections reflect downward revision of 3.0 percentage points on 2024 growth and an upward revision of 2.7 percentage points for 2025, from the December 2023 Economic Outlook update. The downward revision for 2024 growth was mainly on account of worsened drought conditions impacting the agriculture sector.
On the other hand, growth for secondary industries is expected to improve in 2024, and moderate downwards in 2025. Secondary industries are projected to grow by 3.3 percent in 2024, from a 2.0 percent growth registered in 2023. The performance is expected to be driven by manufacturing and resurgence in construction activities for 2024. Furthermore, the sector is expected to improve to 4.0 percent growth in 2025 on the account of the projected recovery for the electricity and water sector. The 2024 growth estimate for the secondary industries was revised upwards by 0.1 percentage point for 2024 and downwards by 0.6 percentage point in 2025, from the corresponding estimates published in the December 2023 Economic Outlook update by the Bank of Namibia.
Growth for tertiary industries is expected to remain robust in 2024 and 2025. Tertiary industries are projected to grow by 4.5 percent in 2024 and by 4.1 percent in 2025, from 2.7 percent registered in 2023. Wholesale and retail trade, hotels and restaurants, transport and storage, financial and insurance service activities, and public administration and defence are expected to lead growth for tertiary industries in 2024. The 2024 growth forecast for tertiary industries was revised upwards by 1.5 percentage points in 2024 and by 0.8 percentage point for 2025, when compared to the corresponding forecasts published in the December 2023 Economic Outlook update.