• Namibia:
• Economy

Namibia - Economy

Overview: Namibia’s economy is driven by mining and fish processing. Since independence in 1990, exports of diamonds, uranium, zinc and fish products have grown strongly. Most people in rural areas of this vast country, however, remain largely unaffected by these activities. Government policy is to raise per capita income, to develop the private sector, and to encourage diversification into manufacturing activities, such as clothing and textiles, and eco-tourism. It is also committed to restraining growth in public spending and controlling inflation.

Having fallen short of the national development plan target of 5% p.a., due to environmental factors such as drought and the finite stocks of fish in the latter 1990s and early 2000s, growth picked up in 2002 rising to 6.7%; it has been consistently robust for the period 2002–2006 averaging 5.1% owing to increased diamond production, the opening of a new zinc mine and refinery, and increased textiles output.

After peaking at 18% in 1992 due to drought, inflation was kept to single figures during the latter 1990s and 2000s, except in 2002 when it rose to 11.3%, and came down to under 5% p.a. in 2004–05. Since the end of 2005 inflation has been on an upward trend averaging 5.1% p.a. for 2006 and peaking at 7.2% in July 2007. Much of this is attributed to the high and volatile international oil prices which have affected Namibia as a net-oil importing country.

Trade: Exports of goods and services account for 46% of GDP and manufactured exports for around 41% of total merchandise exports (2004). Namibia’s main exports are diamonds, fish, fish products, uranium, copper, zinc, gold, cattle, sheep, goats and animal products. The main imports are transport equipment, fuels, machinery, chemicals and industrial raw materials. Main export partners are: the UK for diamonds, beef and canned fish; South Africa for live cattle and sheep, meat products, canned fish, fishmeal and minerals; and Spain and other EU countries. South Africa is its main import partner.

Mining: The sector is the largest source of export earnings, diamonds alone accounting for more than 40% export value. Namibia has great mineral wealth, including diamonds, uranium, copper, zinc, gold and silver. Onshore reserves of diamonds are becoming depleted, but offshore output has risen quickly, helped by new mining technology. The large Rössing uranium mine has deposits to last until at least 2020. Zinc production rose rapidly from the mid-1990s.