Namibia

In-depth country-focused analysis on Namibia's economic, political and operational risk environment, complemented by detailed sector insight

Namibia

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:

  • Namibia's economic growth outlook over the next 10 years will be underpinned by key sectors such as manufacturing; tourism and construction, which will be supported by the government. We note that utility shortages will continue to weigh on business operations, especially in the mining industry.

  • Fiscal revenues will remain under strain over the next three years owing to subdued trade receipts. This will prompt a modest cutback in government expenditure over the same period, but this will only gradually ease the country's sizable fiscal deficits in the years ahead.

  • The Bank of Namibia (BoN) will continue hiking the repo rate in the months ahead in a bid to combat elevated food and utilities price growth, and keep its monetary policy trajectory aligned with the South African Reserve Bank. The BoN will hit the top...

Namibia Operational Risk Coverage (9)

Namibia Operational Risk

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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

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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...

Namibia Labour Market

BMI View:

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...

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...

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 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 (11)

Agribusiness

Namibia Agribusiness

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BMI View: Rising incomes and populations will see South West Africa enjoy long-term growth in corn production. While there will be significant bumps along the way, with the 2015/16 forecast especially poor for Botswana and Namibia, the region will see output growth outpace consumption growth through to the end of our forecast period in 2019/20. Meanwhile, in the sugar sector we see production in the key market of Angola beginning to slow over the forecast period as cheap imports from Brazil and China compete with local production.

Key BMI Forecasts

  • ...

Namibia Agribusiness

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BMI View: We believe rising incomes and growing populations in Angola, Botswana and Namibia will see these countries enjoy long-term production growth in the corn sector. While there will be bumps along the way, we are ultimately predicting these countries to see output growth outpace consumption growth over our forecast period to 2020. Meanwhile, in the sugar sector we see Angolan production accelerating over the forecast...

Autos

Namibia Autos

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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
(2013-2019)
e/f = BMI estimate/forecast. Source: Bank of Namibia, BMI
Key Views
* Tightening of private credit will lead to slower growth in new passenger vehicle sales in 2016 as vehicle...

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

Food & Drink

Namibia Food & Drink

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BMI View: We maintain a positive outlook for Namibia's food and drink industry owing to the country's well-developed market that will drive investment. The stability of the political and economic environment will make Namibia an attractive regional market. The gradual rise in inflation will lower consumer spending, although industry growth will remain relatively strong.

Food and Drink Spending
(2013-2020)
f = BMI forecast. Source: BMI, national statistics

Key Trends...

Infrastructure

Namibia Infrastructure

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BMI View: We continue to forecast a slowdown in construction industry growth over our 10-year forecast period as the country struggles to attract private investment in major developments and battles macroeconomic headwinds, owing to the subdued commodities outlook. Growth will be supported by substantial government spending in improving existing transport infrastructure and the energy and utilities sector, as well as increased private interest in the potential of Namibia's real estate sector outside of the capital city.

Forecast & Industry Developments

  • We...

Insurance

Namibia Insurance

BMI View:

BMI View: Namibia's insurance market will be affected by depreciation and squeezed household income. While premiums are set to grow strongly in local currency, over the short-term in US dollars the market will contract before it shows a slow recovery over the remainder of the forecast period to 2020. On the upside, market penetration will remain strong and personal accident insurance will lead growth, albeit at the expense of life insurance. The market is characterised by a broad range of products on offer and strong distribution channels that are well suited to the local market, which is characterised by low income households and a small, widely distributed population.

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Headline Insurance Forecasts (Namibia 2013-2020)
2013

Mining

Namibia Mining

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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.

Namibia - Mining Industry Value
2013e 2014e ...

Pharmaceuticals & Healthcare

Namibia Pharmaceuticals & Healthcare

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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.

  • ...

Power

Namibia Power

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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.

Headline Power Forecasts (Namibia 2014 - 2020)
2014e 2015f 2016f 2017f ...

Tourism

Namibia Tourism

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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...

Latest Namibia Articles

  • We have left our corn forecasts unchanged despite recent price volatility. ...

  • An unsettled political and economic environment in the wake of the Brexit v...

  • We maintain our above-consensus forecast for the year, with Brent and WTI f...

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