The Governor of the Bank of Namibia (BoN), Johannes IGawaxab, alongside Deputy Governors, Leonie Dunn and Ebson Uanguta, convened with President Netumbo Nandi-Ndaitwah last week in a high-level statutory meeting to address Namibia’s economic trajectory and strategic financial reforms. The engagement, attended by Vice President Lucia Witbooi, Deputy Prime Minister Natangwe Ithete, and other senior officials, underscored the central bank’s efforts to navigate global uncertainties while advancing domestic stability and inclusive growth.
Namibia’s economy demonstrated resilience despite moderating slightly to 3.1% real GDP growth in the fourth quarter of 2024, down from 3.2% in the previous quarter. The first quarter of 2025 maintained momentum, buoyed by robust activity in uranium, gold, and zinc mining, alongside gains in construction, wholesale and retail trade, communication, and tourism. However, the BoN’s April 2025 Economic Outlook revised growth projections downward to 3.8% for 2025 and 4.0% for 2026, reflecting heightened risks from global trade policy shifts, including U.S. tariffs impacting key trading partners.
Inflation emerged as a pressing concern, accelerating to 4.2% in March 2025, driven by rising costs of food, alcoholic beverages, transport, and housing. The central bank adjusted its inflation forecasts upward to an average of 4.2% for 2025 and 4.5% for 2026. Concurrently, foreign reserves declined by 5.2% quarter-on-quarter to N$59.7 billion, reducing import cover to 3.9 months, or 5.2 months excluding externally financed oil and gas imports. Governor IGawaxab emphasized the need for vigilance in managing reserves to buffer against external shocks.
The Governor highlighted broader risks stemming from recent U.S. tariffs, which, while not directly targeting Namibia’s limited exports to the U.S., threaten to destabilize global value chains and weaken demand from major partners like China, the European Union, and South Africa. Such disruptions could erode Namibia’s export competitiveness, exacerbate currency depreciation, and widen the current account deficit. A weaker Namibia Dollar risks inflating import costs and fueling inflation, prompting calls for a diversified export strategy and proactive trade diplomacy to mitigate spillover effects.
In response to these challenges, the BoN unveiled strategic measures to bolster economic resilience. A pivotal decision involves accumulating gold as part of its foreign exchange reserves, targeting 3% of net reserves. This aligns with global central banking trends, leveraging gold’s role as a hedge against inflation and economic volatility. Additionally, two flagship projects aim to modernize Namibia’s financial infrastructure: the Central Securities Depository (CSD), now fully licensed and progressing toward implementation, is poised to enhance market efficiency and attract offshore investment. Meanwhile, the Instant Payment Programme (IPP), developed by subsidiary Instant Payments Namibia (IPN), will introduce a real-time payment platform to reduce transaction costs, boost financial inclusion, and streamline government-to-person (G2P) payments, including social grants.
The Bank reiterated its commitment to evidence-based policymaking, spotlighting ongoing research into rural economic development, global agricultural value chains, fisheries outcomes, water scarcity, and the socio-economic potential of recent oil discoveries. These initiatives aim to drive job creation, poverty alleviation, and equitable growth. Governor IGawaxab affirmed the BoN’s dedication to macroeconomic stability, emphasizing alignment with national development goals despite global headwinds.
The meeting underscored cross-sectoral collaboration, with participation from key figures including Special Advisor Christine //Hoebes and Ministry of Finance Executive Director Dr. Michael Humavindu. Their presence highlighted the multifaceted approach required to address economic challenges and harness opportunities in sectors like mining, energy, and digital finance.
As Namibia navigates shifting global dynamics, the BoN’s strategic reforms—from gold reserves to digital payment systems—signal a proactive stance in safeguarding stability while fostering innovation. With inflationary pressures and trade uncertainties looming, the central bank’s focus on diversification, resilience, and inclusive growth remains critical to anchoring the nation’s long-term prosperity.