Construction suffers despite N$6.2 billion from government

The construction sector continues to experience slow growth even after the government budgeted an injection of N$6.2 billion for the 2024/25 fiscal year.

The latest economic outlook from the Bank of Namibia (BoN) shows contraction of 0.2% in the sector in 2023.

However, growth of 8.5% is expected in 2025.

“This recovery is expected to be driven by increased construction activities in the mining and electricity sectors, as well as government fiscal projects,” notes BoN.

The construction sector has experienced a sharp decline over the past decade, with its contribution to Namibia’s gross domestic product falling from 3.1% in 2016 to 1.4% in 2023.

Employment within the sector also fell from 63 000 workers in 2016 to an estimated 28 000 today, with many of these workers now employed in the informal sector.

Last month, the City of Windhoek announced that it approved 1 875 building plans valued at N$1.92 billion over the past 12 months.

Additionally, the economy is projected to recover, particularly in the secondary industries sector.

“The outlook for secondary industries is characterised by significant improvement in growth, driven by better performances across the electricity and water, manufacturing, and construction sectors,” notes BoN.

The manufacturing sector, which contracted in 2023, is projected to pick up again through the sale of soft drinks.

“The sector is expected to grow by 3.0% in 2024 and further accelerate to 3.5% in 2025,” notes BoN.

This recovery is primarily attributed to the resurgence of the beverages subsector and improved performance in meat processing and grain milling.

According to BoN, the electricity and water sector, which witnessed growth in 2023, is expected to maintain its positive growth.

“Growth is expected to be 9.4% in 2024 and 4.5% in 2025.”

This is largely due to increased electricity generation from the Ruacana hydro plant and ongoing investments in the sector.