Namibia’s annual inflation rate eased to 4.2% in March 2025, down from 4.5% a year earlier, offering a mixed picture of price stability as underlying pressures in essential categories continued to strain household budgets. According to the latest report by Simonis Storm, the moderation reflects a delicate balance between stabilizing global supply chains and persistent domestic cost drivers, particularly in food, housing, and utilities. On a monthly basis, consumer prices rose by 0.5%, slightly outpacing February’s 0.4% increase, signalling that inflationary risks remain embedded in critical sectors of the economy.
The food and non-alcoholic beverages category, which accounts for 16.5% of Namibia’s consumer basket, emerged as a primary inflation driver, with prices surging 6.2% year-on-year. This marked a sharp acceleration from the 4.9% increase recorded in March 2024, underscoring renewed volatility in global and local food supply chains. Within this category, fruit prices skyrocketed by 17.3%, driven by steep hikes for watermelons (36.5%), citrus fruits (31.9%), and avocados (17.9%). Meat inflation climbed to 7.4%, fueled by rising costs for minced meat, biltong, sausages, and mutton, while bread and cereals reversed a deflationary trend from the previous year, posting a 6.1% increase. Analysts attribute these spikes to climate-related disruptions, logistical bottlenecks, and higher input costs for farmers, suggesting that food inflation may remain elevated in the near term.
Housing, water, electricity, gas, and other utilities—the largest component of Namibia’s consumer basket at 28.4%—recorded a 3.8% annual inflation rate, up from 3.4% in March 2024. Persistent increases in rental costs, maintenance expenses, and municipal service tariffs contributed to the upward trajectory. Monthly inflation in this category stood at 0.2%, reflecting gradual but steady cost escalations despite government efforts to stabilize utility prices. “Housing-related costs are structural and less volatile,” noted a Simonis Storm economist. “Even modest monthly increases compound over time, directly impacting the cost of living for Namibian families.”
In contrast, the transport category provided some relief, with annual inflation slowing to 2.6% from 4.3% the previous year. Subdued fuel price increases—petrol and diesel rose by just 2.5% year-on-year—and a slowdown in vehicle purchase costs (3.2% vs. 8.2% in March 2024) contributed to the deceleration. Public transport services, however, saw a slight uptick to 1.4%, driven by higher bus fares and furniture-moving costs. While improved global oil supplies and stabilized demand have tempered transport inflation, analysts caution that currency fluctuations and geopolitical tensions could reignite volatility in energy markets.
Regionally, inflation disparities highlighted unequal cost burdens across Namibia. Zone 3 (encompassing //Kharas, Erongo, Hardap, and Omaheke) recorded the highest rate at 4.4%, driven by steep food prices in arid regions where logistical challenges inflate the cost of staples like maize meal and bread flour. Zone 1 (northern regions) matched the national average at 4.2%, while Zone 2 (Khomas) posted the lowest rate at 4.1%. These variations underscore the uneven impact of supply chain inefficiencies and climatic conditions on price stability.
The report also flagged external risks, particularly the impact of U.S. tariffs on Namibia’s inflation outlook. A 21% duty on Namibian exports such as diamonds, uranium, and fish threaten to reduce foreign exchange earnings and weaken the Namibia dollar, which is pegged to the South African rand. A depreciated currency could heighten imported inflation for fuel, machinery, and consumer goods, further straining households. “The ripple effects of protectionist policies are far-reaching,” the report warned. “Even sectors not directly targeted by tariffs face higher costs through exchange rate pass-through.”
Monetary policy remains a critical tool in navigating these challenges. The Bank of Namibia (BoN) maintained its repo rate at 6.75% in March, following a 25-basis-point cut in February, signaling a cautious approach to balancing growth and price stability. With core inflation—excluding food and energy—holding steady at 4.0%, policymakers face pressure to avoid premature easing that could exacerbate inflationary expectations. South Africa’s higher repo rate of 7.5% adds complexity, as Namibia’s currency peg limits its monetary autonomy, necessitating alignment with regional trends.
Looking ahead, Simonis Storm projects headline inflation to hover around 4.2% in April 2025, with monthly increases of 0.4% to 0.5%. Food prices are expected to remain volatile, influenced by seasonal demand ahead of winter and ongoing supply chain constraints. Transport costs may ease slightly if fuel prices stabilize, though geopolitical tensions and exchange rate risks loom large. Housing and utilities, meanwhile, are likely to maintain their upward creep, driven by structural demand and rising municipal service costs.
The report emphasizes that Namibia’s inflation trajectory is increasingly shaped by global trade dynamics. U.S. protectionist measures, coupled with shipping disruptions and elevated manufacturing costs worldwide, threaten to amplify imported inflation. Domestic industries reliant on foreign inputs, such as agriculture and construction, face mounting cost pressures that could cascade into consumer prices.
For households, the convergence of these factors means sustained pressure on disposable incomes. While lower transport costs offer marginal relief, soaring food and housing expenses dominate budget constraints. Economists urge targeted interventions, such as subsidies for staple foods and investments in local agricultural resilience, to mitigate the burden on vulnerable populations.
As Namibia navigates this complex landscape, the interplay between domestic policy and global forces will dictate its inflationary path. The central bank’s measured stance, coupled with strategic fiscal support, may provide a buffer against external shocks. However, the nation’s heavy reliance on imports and exposure to commodity markets leaves it vulnerable to sudden shifts in the global economic climate. In the words of Simonis Storm analysts, “Namibia’s inflation story is far from static. The coming months will test the resilience of its policy framework and the adaptability of its economy in an increasingly uncertain world.”