With political stability, good economic management and a welcoming attitude towards foreign investment, Namibia presents many investment opportunities, particularly in natural resources. The country’s medium-term growth will be driven in the main by capital-intensive investment projects in the mining and infrastructure space, while key exports such as diamonds and uranium will benefit from gradually improving demand conditions in key markets.
We keep our clients informed of the latest market moves and political developments in Namibia, as part of our 'top-down' and 'bottom-up' perspective. Clients also benefit from in-depth analysis on 11 of Namibia’s most important industries. We provide interactive data and forecasting alongside detailed and risk-assessed analysis from our results-proven research teams. Our aim is to keep you ahead of the curve, so you can feel confident doing business in Namibia.
Namibia Country Risk
Namibia's economy will face dual headwinds of low global demand and prices for its key commodities exports. This will have knock on implications for investment in the mining sector. We forecast growth to slow from 3.9% in 2015 to 4.1% in 2016 and pick up slightly to 4.4% in 2017.
The landslide victory for president-elect Hage Geingob and the ruling SWAPO in Namibia's general elections on November 28 2014 augurs for broad political stability and a pro-business economic agenda. The result means that SWAPO will expand on its two thirds majority in the national assembly. Hopes for a shift towards a more inclusive electoral landscape continue to prove elusive.
Namibia's fiscal position will deteriorate further in the next two years as a contraction in the mining sector - which accounts for around 58% of export...
Namibia Operational Risk Coverage (9)
Namibia Operational Risk
Namibia Operational Risk
BMI View: Namibia's labour market offers a number of opportunities to businesses looking to invest in Sub-Saharan Africa. A relatively high life expectancy, good rates of female participation in the labour force, strong literacy rates, low labour taxes and minimal severance pay costs make the country a highly attractive location for businesses to invest in. However, the country does pose risks in terms of its low enrolment rates in secondary and tertiary education, high unemployment and uncompetitive annual leave costs. These risks increase costs to businesses due to the need to employ foreign workers, train unskilled labourers and compensate for holiday leave. ...
Namibia Crime & Security
Namibia Crime & Security
From a regional perspective, Namibia is a safe and politically stable country. Although crime in the form of pick-pocketing, purse snatching and burglaries are relatively common, crimes to the person tend to be forms of domestic violence as opposed to targeted attacks. In addition, the country has an extremely low terrorism risk and a capable military. The country is considered low risk by the UK Foreign and Commonwealth Office Travel Advice, although it is advised that travellers exercise a sensible degree of caution. Consequently Namibia scores 66.7 out of 100 for its Crime and Security Risk, ranking it second in the Sub-Saharan African region behind Lesotho.
Crime in the capital city of Namibia, Windhoek, is high, with muggers often targeting foreign tourists. Attacks can take place in busy city centre locations in broad daylight, as well during late night journeys home. There have also been cases of credit card skimming at some hotels and...
Namibia Labour Market
Namibia Labour Market
BMI View: Namibia's labour market offers a number of opportunities to businesses looking to invest in Sub-Saharan Africa. A relatively high life expectancy, good rates of female participation in the labour force, strong literacy rates, low labour tax and minimal severance pay costs make the country a highly attractive location for businesses to invest in. However, the country does pose risks in terms of its low enrolment rates in secondary and tertiary education, high unemployment, and uncompetitive annual leave costs. These risks increase costs to businesses due to the need to employ foreign workers, train unskilled labourers and compensate for holiday leave. Scoring 4...
With one of the most highly ranked logistics networks on the continent, Namibia has become a regional transport hub, particularly for its landlocked neighbours, which benefit from its well-developed port and road infrastructure. Significant investments are being poured into ongoing projects to further boost the country's port, airport, road and railway infrastructure in an effort to increase its international appeal, but businesses remain burdened by Namibia's lengthy and burdensome trade governance processes, which multiply costs, lead times and delays. The country's limited utilities capabilities also present a notable source of risk, particularly in Namibia's vulnerability to droughts, its expensive Internet services, and its dependence on power and fuel imports. As such, Namibia scores 46.4 out of 100 for Logistics, ranking fourth in the region, between Seychelles and Ghana.
Namibia's economic and trade growth represents a major source of...
Namibia Trade & Investment
Namibia Trade & Investment
BMI View: Namibia is a regional outperformer for Trade And Investment Risk thanks to its openness to trade and a regulatory environment that is both clear and favourable towards foreign investors. The country is ranked seventh out of 48 countries in Sub-Saharan Africa, with a score of 50.2 out of 100. We attribute this to the high risks stemming from high levels of red tape when it comes to opening a business and registering property, and lower FDI levels than its regional peers.
Namibia's openness to trade and investment flows have seen the country's economy expand rapidly in the past decade, with real GDP rising from USD3.37bn in 2002 to USD13.4bn in...
Namibia Industry Coverage (12)
BMI View: We believe the rising incomes and population of South West Africa will see the region enjoy long-term growth in production in the corn sector. While there will be bumps along the way, we are ultimately predicting the region to see output growth outpace consumption growth over our forecast period to 2019. Meanwhile, in the sugar sector we see production in the key markets of Angola and Zambia beginning to slow over the forecast period as cheap imports from Brazil and China compete with local production.
Key BMI Forecasts
Angolan corn production from 2014/15 to 2018/19: 6% to 1.97mn tonnes. Although less than the bumper 2014 crop, we expect above-...
BMI View: A tightening private credit market will lead to slower growth in new passenger vehicle sales in 2016. Infrastructure investment and commodity production will drive growth in the CV segment over our forecast period 2016-2019.
|Vehicle Sales, Units|
|e/f = BMI estimate/forecast. Source: Bank of Namibia, BMI|
|* Tightening of private credit will lead to slower growth in new passenger vehicle sales in 2016 as vehicle...|
Namibia Commercial Banking
|Date||Total assets||Client loans||Bond portfolio||Other||Liabilities and capital||Capital||Client deposits...|
Food & Drink
Namibia Food & Drink
BMI View: We have a positive outlook on Namibia's food and drink industry, as economic growth will boost consumer spending. However, we forecast staple foods and alcohol sales to come under pressure due to increasing prices. The 2015 alcohol tax hike will increase alcohol price, wile increasing maize import prices will raise food prices.
|Food And Drink Spending|
|f = BMI forecast. Source: BMI, national...|
Namibia Freight Transport
BMI View: Our forecast for the Namibian freight transport sector is positive, in both the near and longer term. Domestic economic growth and an expanding mining sector will continue to drive demand within the country, while continuing investment in freight transport links - both road and rail - with hinterland countries such as Botswana and Zimbabwe will see transit volumes grow. The outlook for Namibia's economy for the next few years is positive and we expect relatively stable real GDP growth of 4.1% in 2016 and 4.4% in 2017. Fixed investment growth will increase due to new regulations of minimum investment into unlisted assets. However, private consumption will decrease over the next few years due to stricter lending conditions in order to curb credit demand and this has the potential to weigh on road freight volume growth in 2016.
BMI View: Weakening government stimulus amid lower commodity prices will weigh on infrastructure growth over coming years, with our forecasts seeing a notable slowdown in the construction sector's real growth. However, Namibia's positioning as a regional logistics hub and key export route for landlocked neighbours, as well as ambitions to lower dependence on South Africa for electricity will help maintain growth. Furthermore, we have revised upwards our 2015 sector outlook from 11% growth to 14% this quarter after stronger than expected H115 growth was reported, driven by residential construction, a key element of the current development plan.
The key drivers of Namibia's construction industry growth over the short-term will be the projects awarded during the 2011-2014 Targeted Intervention Programme for Employment and Economic Growth (TIPEEG), as well as the port of...
BMI View: Both Namibia's life and non-life insurance segments are set to enjoy rapid growth over the period from 2015 to 2019, which will in large part be due to the development and distribution of micro-insurance products. Both major segments are dominated by large players which are wholly-owned by South African insurance groups. Unsurprisingly, Namibia therefore shares many characteristics with its neighbouring country.
The Namibian insurance sector is characterised by its close connection with South African insurance companies. Both Namibia's life and non-life segments are dominated by wholly-owned subsidiaries of large South African groups, and because of this, trends in both segments mirror those of their counterparts in South Africa. Accordingly, the incumbents are adept at producing and delivering...
BMI View: Namibia's mining sector will continue to be negatively affected by low mineral prices and subdued metals demand. The country's diamonds and uranium production contracted in 2015, as well as key base metals such as copper. While production levels will remain under pressure through the coming quarters, we expect the country to remain an important destination for mining investment over the long term.
Pharmaceuticals & Healthcare
Namibia Pharmaceuticals & Healthcare
BMI View : Updated storage requirements for pharmaceutical distributors demonstrate an improving regulatory environment in Namibia. We expect the three main players Nampharm, Geka Pharma and Erongomed to increase their market share either via acquisitions or as a result of smaller players going out of business. Namibia's pharmaceutical market is small but attractive, as demonstrated by an impressive presence of patented medicines.
Headline Expenditure Forecasts
Pharmaceuticals: NAD2.14bn (USD198mn) in 2014 to NAD2.34bn (USD192mn) in 2015; +9.2% in local currency and -2.9%% in US dollar terms. Forecast unchanged from last quarter.
BMI View: Namibia will remain a net electricity importer throughout our forecast period up until 2024. Delays in gas-fired projects, due to political indecision and low gas prices, are keeping investors wary. The renewables sector is still small, but our positive outlook on growth is supported by the first project coming online and more in the pipeline.
BMI View : BMI 's Southern Africa report analyses the latest industry, regulatory and macroeconomic developments in the telecoms markets in Angola, Botswana, Mozambique, Mauritius and Namibia. It also contains our estimates based on the latest market data and updated five-year forecasts to 2020 for the mobile, fixed-line and broadband sectors. From the five states, Mauritius and Mozambique stand out as dynamic and higher performing markets in terms of penetration and 3G/4G developments along with growth rates.
Latest Updates & Industry Developments
Important downward revisions were made to Angola's...
BMI View: Namibia is set to see steady growth throughout its tourism sector. Inbound arrivals will significantly increase, as economic conditions continue to improve in key source markets. With the vast majority of arrivals coming from other African nations however, the sector is heavily reliant on the continued economic security of its neighbours, especially countries such as South Africa and Angola. Namibia's main draw for tourists is the abundance of national parks and game reserves and the wildlife watching opportunities they provide. In order to maximise this potential it is clear that much funding and effort must be put into improving and expanding the travel infrastructure within the country. This could be an area of the tourism sector that provides good investment opportunities in the coming years. Although there is some presence from the major international hotel groups, these are almost exclusively found...