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Overview

  • Namibia is a small country of about 2.5 million people, with a long coastline on the South Atlantic, bordering South Africa, Botswana, Zambia and Angola. It is the driest country in Sub-Saharan Africa, and  is rich in mineral resources, including diamonds and uranium.

    Political stability and sound economic management have helped anchor poverty reduction and allowed Namibia to become an upper-middle income country. However, socio-economic inequalities inherited from the past apartheid system remain extremely high and structural constraints to growth have hampered job creation.

    Economic Outlook

    After experiencing average annual growth of 4.4% between 1991 and 2015, Namibia’s economy fell into recession in 2016 and has since struggled to recover. Namibia is largely dependent on investments in mineral extraction and government spending, and has suffered from falling commodity prices, weak growth in key trade partners (Angola, South Africa) and tight fiscal policy on the back of government’s effort to rebalance public finances.

    The COVID-19 (coronavirus) pandemic is set to have an unprecedented impact on Namibia’s economy and has exacerbated preexisting structural challenges. Real gross domestic product (GDP) contracted by 7.4%t year-on-year (y-o-y) over Q1-Q3 2020. The mining sector, which is an important earner of foreign exchange, contracted by 12.2% y-o-y affected by domestic factors and falling global demand (especially diamonds). On the back of local and foreign travel restrictions, the hospitality industry recorded a large contraction of 46.5% y-o-y. Overall, GDP is expected to have contracted by 7.3% in 2020. Going forward, the growth outlook is subject to significant uncertainty given the unknown profile of the pandemic and likelihood of further restrictions in activity if additional infections waves materialize. Structural policy reforms will be required to raise Namibia’s growth potential.

    With an increase of 200,000 in 2020, the number of poor people measured by the upper middle-income poverty line ($5.5/person/day in 2011 Purchasing Power Parity terms) has reached a record-high of 1.6 million. The pandemic mostly affected already vulnerable people, which threatens to widen social gaps further and increase already extremely high inequality.

    Development Challenges

    Since its independence in 1990, Namibia had achieved notable progress in reducing poverty, halving the proportion of Namibians living below the national poverty line to 28.7% in 2009-10 and to 17.4% by 2015-16.

    However, in part due to the negative impact of COVID-19 on livelihoods, poverty rates are projected to increase in the near to medium term, with the upper middle-income poverty rate projected to stay around 64% until 2022. Typically, female-headed households, the less educated, larger families, children and the elderly, and laborers in subsistence farming, are particularly prone to poverty.

    Severe drought conditions experienced in 2019 constrained agricultural output and led to a sharp decline in harvests. The reduction in precipitation also affected the broader economy through lower electricity and water generation, with repercussions on industrial production. These developments, along with lower diamond and mineral production due to reduced global demand and falling prices, in a context of much-needed fiscal consolidation, have created challenging conditions for growth.

    Progress toward reducing inequality has been slow and as a result, Namibia remains one of the most unequal countries in the world. 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 past steady economic growth has not been enough to deal with the country’s triple challenge of high poverty, inequality, and unemployment. The weakening of growth in the last few years combined with the COVID-19 shock further put at risk social development progress.

    Last Updated: Mar 16, 2021

  • The Country Partnership Strategy (CPS) FY14-17 is the first, full World Bank Group (WBG) country strategy for Namibia, and was extended through the Performance and Learning review, an update on the progress of CPS implementation.

    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.

    The World Bank and the government 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.

    The Systematic Country Diagnostic, which identifies the most important challenges and opportunities a country faces, is being finalized, and will guide the development of a new CPS.

    Last Updated: Mar 16, 2021

  • 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 International Finance Corporation and the Multilateral Investment Guarantee Agency.

    Furthermore, through the Satellite Monitoring for Forest Management initiative, the World Bank provided support to the Namibia’s Directorate of Forestry in its work to establish and capacitate a satellite monitoring unit to produce forest cover and forest change maps that inform forest policy and management.

    In addition, the World Bank is also providing critical analytical support on forest, water and agricultural resources to help inform Namibia’s Nationally Determined Contribution (NDC) to the Paris Climate Agreement, through the Integrated Land and Water Initiative. This cross-sectoral engagement is assessing how climate adaptation, resilience building and greenhouse gas mitigation can support targeted interventions in the forestry, crop and livestock,  and water subsectors.

    Outputs of this work include an agriculture sector risk assessment, identification of risk management strategies and investment proposals for strengthening resilience building and mitigation in the livestock and horticulture subsectors, a hydro-met assessment, and identification of livelihood diversification strategies for communities living in Namibia’s forest and for whom climactic shocks are especially acute.  

    Last Updated: Mar 16, 2021

  • Partners include specialized agencies of the United Nations system, the African Development Bank (AfDB), the New Development Bank, the International Monetary Fund (IMF).

    Last Updated: Mar 16, 2021

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

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*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
Sr. External Affairs Officer
South Africa
+27-12-742-3107
zratshitanga@worldbank.org
For project-related issues and complaints
namibiaalert@worldbank.org