Namibia’s economy grew by 3.7% in 2024, exceeding expectations, with strong performances in the secondary and tertiary sectors offsetting a decline in primary industries.
The Gross Domestic Groduct (GDP) rose from N$155 billion to N$157.4 billion – slightly higher than the 3.5% forecast for the fourth quarter of 2024.
According to FNB Namibia economist Helena Mboti’s GDP review for February 2025, the country’s economy exceeded expectations in 2024, with the Namibia Statistics Agency’s annual national accounts revealing a stronger than expected GDP growth rate of 3.7% year on year (y/y).
“This positive surprise was largely driven by a stronger performance in the secondary and tertiary sectors, although it was partially offset by a notable slowdown in the primary industry,” she says.
Mboti says the primary sector contracted sharply (-1.8%) in 2024, driven by lower mining output and a weak agricultural sector.
In this regard, the mining and quarrying output declined to -1.2% y/y in the fourth quarter of 2024, following exceptional growth of 19.3% y/y during the same period the previous year.
The downturn was broad-based, with diamond mining contracting by -3.7% y/y and uranium mining decelerating significantly to 1.8% y/y in the fourth quarter of 2024 from 29.6% in fourth quarter of 2023.
The steepest drop was recorded in other mining and quarrying activities, which collapsed to just 0.4% in 2024 from 35.4% y/y in 2023.
“The contraction in the mining sector highlights the volatility of extractive output, however, it is worth noting that GDP excluding exploration activity remained notable at 3% in the fourth quarter of 2024, compared to 2.8% in the third quarter of 2024, therefore, economic activity outside direct exploration activity remains relatively robust,” the analyst says.
She says going forward, the mining sector is expected to remain the main engine of domestic growth driven by increased uranium, gold and other metals production in 2025, which should offset the persistent decline expected in diamond production.
“We also expect the resumption of oil and gas activities in 2025, which were halted temporarily from the third quarter of 2024, to further support the rebound in the primary sector,” Mboti says.
The analyst says the secondary sector expanded by 3% y/y in 2024, up from 2.4% y/y in 2023, largely supported by a turnaround in manufacturing and a strong recovery in construction activity.
Manufacturing grew by 2.8% y/y in 2024, rebounding from a contraction of 2.1% y/y in the fourth quarter of 2023.
“The recovery was led by notable increases in beverage production recording 13.8% y/y in 2024 from -26.1% y/y in 2023; leather and related products (4.8% y/y from -10.9% y/y), non-metallic mineral products (2.6% y/y from -6.2% y/y), and basic non-ferrous metals (40.2% y/y from -4.8% y/y).”
The tertiary industry expanded by 4.9% y/y in 2024, accelerating from 3% y/y in 2023, reflecting a growing demand for services.
“Growth in wholesale and retail trade surged to 9.1% y/y from 5.8% y/y during the period under review,” Mboti says.
Meanwhile the transport and storage sector recorded robust growth of 11.4% y/y in the fourth quarter of 2024, up from 8.5% in the fourth quarter of 2023, driven mainly by a sharp increase in storage services to 20.1% y/y from 9.4% y/y.
“Despite the optimism, continued weakness in the primary sector and persistent household pressures will weigh on growth, therefore, we maintain our GDP forecasts for 2025 and 2026 at 3.5% and 4.8%, respectively,” the analyst says.
– email: matthew@namibian.com.na
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