Overview

  • Namibia is largely desert, ranchland with a long coastline on the South Atlantic, and borders South Africa, Botswana, and Angola. The country’s natural mineral riches and a tiny population of about 2.5 million (2016) have made it an upper-middle-income country. Political stability and sound economic management have helped anchor poverty reduction. However, this has not yet been translated into job creation, and extreme socio-economic inequalities inherited from the years it was run under an apartheid system persist, despite generous public spending on social programs.

    The economic recession continued in 2018. The real economic activity contracted by 0.4% in 2018, from a deeper contraction of 0.9% in 2017. The depressed economic activity reflects the continuation of the fiscal consolidation process that acted as a major drag on the economy and the tepid growth performance of the neighboring countries that had additional adverse effect on the demand for Namibia’s exports.

    The fiscal consolidation process that started in the middle of FY2016/17 due to the excessive fiscal spending in the previous FYs, continued in FY2018/19, but with slower pace. The primary fiscal deficit was further reduced by 1.1% of gross domestic product (GDP) and was executed mostly through additional reductions in the recurrent expenditures (wage bill and transfers to the parastatals) and capital expenditures.

    Some encouraging signs for possible recovery of the economy came from the mining and construction activity. The mining activity expanded by 11% in 2018 because of higher uranium production as the Husab mine ramps up its production. The construction activity also recovered with annual growth of 10 percent, following a strong contraction in the last two years of 25%, respectively. The revival of the construction activity was driven by the private sector, despite the stall in the public construction projects.

    Economic growth is expected to return gradually in 2019 and reach up to 2% over the medium-term. Medium-term growth recovery will be driven by the mining activity, especially uranium, as the Husab mine ramps up its production as the uranium prices are expected to rise and terms of trade improve. The economic recovery will also be facilitated by the further revival of the construction sector, supported by the planned infrastructural projects financed by the Africa Development Bank. Furthermore, as the domestic demand and the regional trading partners slowly recover, services sector activities are also expected to contribute to the resumption of economic growth. The agriculture will also provide a positive boost to the economic recovery due to anticipated favorable weather conditions.

    Development Challenges

    Namibia has achieved notable progress in reducing poverty since independence in 1990. The country more than halved the proportion of Namibians living below the national poverty line from 69.3 in 1993/94 to 28.7% in 2009/10, and further to 17.4% in 2015/16. Measured at the international poverty lines of 2011 purchasing power parity (PPP) $1.90 per person per day, 14.6% of the population were poor in 2018 following a fall from 22.6% in 2009. The corresponding poverty rate at the 2011 PPP $3.20 per person per day in 2018 was 32.0%, relatively high for an upper middle-income country. Typically, female headed households, the less educated, larger families, children and the elderly, and laborers in subsistence farming, are particularly prone to poverty.

    Progress towards reducing inequality has been slow and as a result, Namibia is one of the most unequal countries in the world and this slows the pace of poverty reduction. The consumption Gini index declined from 64.6 in 1993/94 to 60.1 in 2004; to 59.5 in 2010, and further to 57.6 in 2015.

    Namibia’s relatively steady economic growth has, thus, not been enough to deal with the country’s triple challenge of high poverty, inequality, and unemployment. Unemployment has remained stubbornly high at 34.0% of the working population in 2016 from 27.9% in 2014. Unemployment is even higher among women (38.3%) and the youth (43.4%). A small segment of poor Namibians benefits from employment income, while the majority rely instead on subsistence farming or social grants and other transfers. Slowing economic growth, owing partly to the ongoing fiscal consolidation and slow recovery of the regional trading partners, is expected to further constrain job creation.

    Last Updated: Mar 28, 2019

  • The COUNTRY PARTNERSHIP STRATEGY (CPS) FY14-17 is the first full WBG country strategy for Namibia, currently extended to 2020 through the Performance and Learning review considered by the Board in 2018.  Such an extension would align a follow-on CPF to the next electoral cycle, planned in November 2019.  The first CPS was developed within the framework of Namibia’s National Development Plan 4 (NDP4) and included carefully calibrated expectations and program objectives that were not overreaching. The advisory, technical assistance and knowledge products envisaged in the CPS are grouped within two focus areas: (i) improving capacity for policy design and implementation in strategic areas; and (ii) increasing the private sector’s ability to generate jobs and income. Last Updated: March 2019

    The World Bank and the Government of the Republic of Namibia are currently jointly conducting a diagnostic to identify the binding constraints to the process of poverty reduction which will set a foundation for the successor strategy, the second full WBG framework.

    Last Updated: Mar 28, 2019

  • The Country Partnership Strategy (CPS) FY14–FY17 has delivered on most of the planned advisory activities within its limited program and achieved some important results. Knowledge services and technical assistance were funded mainly by trust funds, such as the Institutional Development Fund, the Trust Fund for Statistical Capacity Building, and the Financial Sector Reform and Strengthening Initiative (FIRST).

    Under Pillar 1, delivery of CPS products and results has been strong, including in economic management (debt management, budget transparency, procurement and public-private partnership legal framework), statistical capacity building and poverty analysis. The report on fiscal policy and inequality jointly produced by the Namibia Statistical Agency and the World Bank in FY17 received wide attention from policymakers and the media.

    Under Pillar 2, the pace of deliveries has been good in the competitive private sector program area (financial sector, investment climate, competition), and substantial progress was made in the infrastructure program, which mainly featured activities of IFC and MIGA.

    Last Updated: Mar 28, 2019

  • Namibia became a member of the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA) in 1990.

    Last Updated: Mar 28, 2019

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LENDING

Namibia: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


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Additional Resources

Country Office Contacts

Main Office Contact
442 Rodericks Street
Lynnwood Road
Tshwane 0081
+27-12-742-3100
For general information and inquiries
Zandi Ratshitanga
Communications Officer
South Africa
+27-12-742-3107
zratshitanga@worldbank.org
For project-related issues and complaints
namibiaalert@worldbank.org