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.

Country Risk

Namibia Country Risk

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Core Views:

  • Strong domestic demand and accelerating investment in the mining sector will see economic growth in Namibia average a respectable 4.5% annually over the next five years. Over the near term, export performance will continue to be weighed down by weak global demand and soft commodity prices.

  • We expect the ruling SWAPO to secure a comfortable victory in November's general elections, with the party likely to maintain its broadly pro-business economic agenda in the years ahead. A weak and under-funded opposition will preclude anything other than a minor swing away from the ruling party.

  • Our broad outlook for Namibia's current account over the next few years remains relatively unchanged. We maintain that the country will sustain a sizeable current account shortfall over our 2014-2018 forecast period as demand for imports...

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Namibia Operational Risk Coverage (9)

Namibia Operational Risk

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BMI View: 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 a result,...

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Namibia Crime & Security

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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...

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Namibia Labour Market

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BMI considers Namibia's labour market to offer 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 contributions 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 41.7 out of 100, the country ranks eighth in the region in our Labour Market Risk Index, between Cameroon and Uganda.

With a population size of just 2.2mn, Namibia offers a relatively small pool of employees compared to some other...

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Namibia Logistics

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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...

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Namibia Trade & Investment

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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 eighth out of 44 countries in Sub-Saharan Africa (SSA), with a score of 47.7 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 2012. However, as many of its neighbours, Namibia is highly dependent on primary commodities such as minerals, diamonds and agricultural which leave it vulnerable to...

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Namibia Industry Coverage (12)

Agribusiness

Namibia Agribusiness

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BMI View: We expect food security in South West Africa to improve over the short term, as we expect higher corn production from Zambia in 2014/15. Over the medium term, we see downside risks to sugar production in the region owing a global glut of the sweetener. Even with reduced production incentives, we expect Zambia to easily remain the region's largest corn producer and exporter, while other countries in the region will struggle to maintain production surpluses. We believe that the potential in the Angolan sugar sector due to recent investments coming on...

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Autos

Namibia Autos

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BMI View: According to the BoN, new vehicle sales in Q314 came in at 5,525 units, an increase of 22.7% year-on-year (y-o-y). This brought auto sales for 9M14 to 15,803 units, an increase of 6.9% y-o-y. We have been bullish on auto demand for some time and recent industry sales figures reinforce our view. As a result of the strong momentum in 9M14, we have upgraded our full-year sales forecast and now expect vehicle sales in 2014 to rise 31.0% to 20,822 units. While our Country Risk team expects private consumption growth to slow slightly in 2015 to 4.8% versus 5.0% in 2014, it will by no means derail the positive consumer story in the country. Therefore, we have upgraded our 2015 auto sales growth forecast to 20.0% versus 10.0% previously, which will see sales reaching 24,987 units in 2015.

While our Country Risk team expects private consumption growth to slow slightly in 2015 to 4.8% versus 5.0% in 2014, it will by no...

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Commercial Banking

Namibia Commercial Banking

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Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

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Food & Drink

Namibia Food & Drink

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BMI View: Despite Namibia having a relatively high per capita income of USD5,216 in 2014, the country's income distribution is among the worst in the world. Although we still estimate that around one third of the labour force is unemployed, poverty has been on a downward trend for more than a decade. The Fourth National Development Plan (launched in 2012) aims to tackle these problems with a programme designed to run until 2017. However, the country's relatively small population and rising concerns about a looming energy crisis make Namibia less attractive than a number of other Sub-Saharan African countries for growth-seeking multinat...

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Freight Transport

Namibia Freight Transport

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We forecast positive growth across Namibia's freight modes in 2015, driven by an expanding economy, developing industries and a continued effort to make the country a key transit route for landlocked Southern African states such as Botswana. The Namibian economy will post solid growth of 4.5% in 2015, and expand by the same average pace annually over the next five years, which will naturally drive growth in freight volumes.

This real GDP growth will be driven mainly 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. These industries will support different freight modes. New mining and infrastructure projects will necessitate the import of project cargos and containerised capital goods, driving up total tonnage and box volumes at the country's ports, and on road and rail services. Diamond exports...

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Infrastructure

Namibia Infrastructure

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BMI View: Following a mixed 2014, we expect the Namibian economy and the construction sector to continue to perform well, however with a downward revision to our medium-term outlook. Growth rates in 2015 will not be able to match the high double-digit numbers seen over the past years, as the governments stimulus programme terminated at end-2014.

Namibia's construction sector growth is being driven by a number of factors (listed below). The country has great potential and a building boom has seen a flurry of contracts signed and building permits approved. This acceleration in approvals has been filtering through to activity on the ground in 2014. However with overall mixed...

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Insurance

Namibia Insurance

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BMI View: Namibia's insurance market is expanding rapidly, with both life and non-life expected to show robust double digit growth in terms of premiums written throughout our forecast period to 2018. While the life sector will continue to dominate, accounting for around 70% of premiums, growth will be higher in the non-life sector, with motor, property and personal accident insurance expanding particularly rapidly.

The insurance market in Namibia saw healthy growth in premiums in 2014, although currency fluctuations meant that in US dollar terms the market looked more subdued. Moving forward, a healthy domestic economic outlook and stronger Namibian dollar mean we expect to see growth in both US dollar terms and local currency terms throughout the forecast period, with high double digit growth expected in many sub-sectors. Increases in private financial consumption and...

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Mining

Namibia Mining

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BMI View: While Namibia holds substantial diamond and uranium reserves among other minerals, the government's potential to enforce policy to extract greater revenue from the sector remains a key downside risk to investment. Overall, we forecast Namibia's mining industry value to grow on average 4.7% y-o-y from an estimated USD1.5bn in 2014 to USD1.9bn in 2018. This will represent a decline in the mining sector's contribution to GDP from 13% in 2014 to 10% in 2018. On the positive side, we anticipate greater Chinese investment to flow into the country's mining sector.

Fastest Growth In Uranium
Namibia - Select Mineral Production Growth
...

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Pharmaceuticals & Healthcare

Namibia Pharmaceuticals & Healthcare

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BMI View: Recent comments by the public relations officer of the Ministry of Health and Social Services, Ester Paulus, that Namibia is not facing 'that much of a [medicines] shortage' cast fresh doubt on the government's commitment to tackle the pertinent healthcare issues that are affecting Namibians and leaving many without adequate healthcare. Nevertheless, the government's plans to build new healthcare facilities and the recent recruitment of pharmacists into the country are positive developments for patients.

Headline Expenditure Forecasts

  • Pharmaceuticals: NAD2.82bn (USD263mn) in 2014 to NAD3.17bn (USD306mn) in 2015; +12.5% in local currency and +16.4% in US dollar terms.

  • ...

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Power

Namibia Power

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BMI View: Namibia is at a critical juncture in the development of its electricity sector. The country is currently facing a severe crisis in the provision of power due to an extreme reliance on a dilapidated hydropower system, which is vulnerable to breakdown and drought, and on imported electricity from South Africa. Various projects are in the pipeline which will radically transform the country's ability to generate electricity during the course of this decade, above all the Kudu gas-fired power station and the recently announced Arandis power station, as well as further smaller investments in hydropower and solar energy. Together, these will end Namibia's dependence on imports and...

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Telecommunications

Namibia Telecommunications

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BMI View : BMI's Q115 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 analysis of the latest market data relating to the end of September 2014 and an update of our five-year forecasts to 2018 for the mobile, fixed-line and internet sectors.

Key Data

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Tourism

Namibia Tourism

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The Namibian tourism industry is still developing and has an endowment of natural beauty and attractions that will require conservation in the future. The continuing improvement of economic conditions in key source markets such Zambia and Germany will help the tourism industry to grow somewhat in the coming years; however, it will always be constrained unless there is a large investment in infrastructure in the country. Additionally, high levels of poverty and Aids, and a rising level of crime against tourists in Windhoek may all prove a deterrent to potential visitors.

Ultimately, the lack of tourism and travel infrastructure is holding the country back. As it is difficult to get around and with poor hotel investment, there needs to be a concerted effort by the government to improve the roads, airports, and train services within the country to try to attract both foreign tourists and foreign investment to develop properties. Currently, the...

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