Namibia has raised its economic growth forecasts for the current year to 3.5% and for 2024 to 2.9%, an improvement from earlier projections of 3.2% and 2.2%, respectively.
The increase is mainly attributed to a boost in the country's manufacturing output and strong demand for services, according to Namibian Finance Minister Ipumbu Shiimi, who announced the revised figures during a mid-year budget review in Parliament on Tuesday.
Minister Shiimi also reiterated the government's forecast of a 4.2% budget deficit for the current fiscal year. While expressing optimism about Namibia's secondary and tertiary sectors, he warned that primary industries such as mining and agriculture are facing challenges.
"Value addition in the primary industry is projected to trend lower due to reduced output than initially anticipated in the mining sector as well as the agriculture sector, which is expected to be negatively affected by the ongoing drought," Shiimi noted.
The minister also highlighted the risks posed by volatile global commodity prices and water supply constraints.
Namibia is a major global producer of diamonds and has significant reserves of lithium, which is critical for renewable energy storage, and rare earth minerals such as dysprosium and terbium, which are essential for permanent magnets used in electric vehicle batteries and wind turbines.
In June, the southern African country banned the export of unprocessed lithium and other critical minerals. The move was aimed at encouraging local processing and capitalizing on growing global demand for metals used in clean energy technologies.
In addition, Namibia has recently asked neighboring South Africa, the continent's second-largest economy, for help in developing its newly discovered oil fields in an effort to capitalize on its oil resources. Namibia's offshore reserves, discovered in 2022, are reported to contain at least 11 billion barrels of light oil and up to 206.7 billion cubic meters of gas.