Namibia’s post-pandemic economic resurgence, fuelled by a record influx of foreign direct investment (FDI), is shadowed by a stark reality: the country is losing billions in repatriated profits as multinational firms channel earnings abroad. According to the 2025 Namibia Foreign Direct Investment Report, dividend and interest payments to foreign investors skyrocketed from N$1.2 billion in 2020 to N$9.3 billion in 2024, raising concerns about the long-term sustainability of growth driven by extractive industries and capital-intensive sectors.
Namibia’s FDI inflows have rebounded dramatically since 2021, reaching a cumulative N$114.9 billion by 2024. This surge, largely driven by oil and gas exploration in the Orange Basin, has positioned Namibia as Africa’s seventh-largest FDI destination. However, the composition of these investments reveals a reliance on resource extraction, with 69% of FDI classified as “natural resource-seeking” under economist John Dunning’s framework. Mining and quarrying dominate, accounting for 67.7% of inward FDI stock, followed by financial services (16.5%) and manufacturing (6.2%).
While these sectors have bolstered GDP growth and export earnings, their capital-intensive nature limits job creation and local value retention. The mining sector, for instance, employs just 15,653 workers despite absorbing 67.7% of FDI stock. Meanwhile, profit repatriation—dividends and interest paid to foreign investors—has surged, reflecting the extractive nature of these investments.
Profit repatriations soared over five years, with dividends alone climbing from N$1.2 billion in 2020 to N$9.3 billion in 2024. Key sectors driving this outflow include: Diamond and gold mining firms, grappling with global demand shifts and competition from lab-grown gems, repatriated 30.9% of total dividends; banks and insurers, buoyed by high interest rates and fee income, contributed 39.3% of dividends, though the sector employs only 8,016 workers and improved consumer demand lifted this sector’s dividend share to 18.5%, despite its labor-intensive profile.
Geographically, South Africa received over 50% of dividends, reflecting its ownership stakes in Namibian banks and retailers. Mauritius (28.1%) and the UK (6.1%) followed, linked to gold mining and hydrocarbon ventures.
The surge in repatriations underscores a structural imbalance. While FDI inflows have stabilized Namibia’s balance of payments and supported infrastructure projects like the Walvis Bay port expansion, outflows strain foreign reserves and limit reinvestment in local economies. The Bank of Namibia notes that FDI stock as a percentage of GDP reached 84.3% in 2024, yet retained earnings—profits reinvested locally—amounted to just N$4.3 billion, a fraction of total repatriations.
This dynamic exposes Namibia to external shocks. For example, diamond miners faced reduced dividends in 2024 due to weak demand from China and the U.S., while rising interest rates globally increased debt servicing costs for firms reliant on intercompany loans.
The Namibia Investment Promotion and Development Board (NIPDB) acknowledges these challenges, prioritizing economic diversification through ten sectors, including renewable energy, agriculture, and tourism. Initiatives like the N$500 million Cleanergy green hydrogen pilot and the N$1.1 billion Namibia Berries blueberry farm aim to attract efficiency- and market-seeking FDI that generates jobs and retains earnings. However, such projects constitute only 19.7% of the NIPDB’s N$174.9 billion pipeline, overshadowed by mining and oil ventures.
Experts argue that policy reforms are critical. The report highlights delays in land allocation, permit approvals, and incentive frameworks as barriers to high-value FDI. Streamlining these processes, coupled with incentives for local reinvestment, could redirect profits into sectors like manufacturing and agro-processing. For instance, the Hylron green iron project in Arandis, though small-scale, demonstrates potential for value-added exports.
Namibia’s FDI trajectory mirrors broader African trends, where resource wealth attracts capital but often fails to translate into inclusive growth. The country’s rise to third place in Africa’s Greenfield FDI Performance Index signals investor confidence, yet reliance on volatile commodities and repatriation-heavy sectors poses risks.
For policymakers, the challenge lies in leveraging FDI to build resilient, diversified economies. As global investors pivot toward sustainability, Namibia’s renewable energy and agriculture sectors offer avenues to align profit motives with national development goals. However, without structural reforms to enhance local retention and job creation, the current FDI boom risks becoming a double-edged sword—fueling growth on paper while draining resources needed for long-term prosperity.
In this delicate balance, Namibia’s ability to convert foreign capital into sustainable gains will determine whether its FDI story becomes one of enduring success or fleeting opportunity.