An International Monetary Fund (IMF) mission to Namibia for the 2026 Article IV Consultation published its concluding statement, reporting that real GDP growth slowed to 1.7% in 2025 and is expected to remain subdued in 2026 amid weak diamond demand and spillovers from the Middle East conflict. Inflation fell to 2.4% year on year in February 2026 but higher fuel prices are projected to raise inflation over the year. The IMF also noted a modest external improvement in 2025, with the current account deficit narrowing to 13.2% of GDP, while gross foreign reserves declined after the October 2025 redemption of Namibia’s USD 750 million Eurobond, leaving import cover at 3.5 months at end-2025. The statement estimates the fiscal deficit widened markedly in FY25/26 due to a sharp decline in Southern African Customs Union revenues and points to the FY26/27 budget’s planned consolidation through reform of the Public Service Employees Medical Aid Scheme, reduced transfers to public enterprises, and controls on spending for goods and services. It argues that further adjustment is needed to put debt on a firm downward path, including expenditure restraint to contain recurrent spending, improved revenue administration, civil service reforms to limit the wage bill, full implementation of planned medical scheme reforms, and strengthened public sector management and procurement. On monetary policy, the mission highlighted that the Bank of Namibia held the policy rate at 6.5% in February 2026 with a 25 basis point gap to the South African Reserve Bank, and recommended close monitoring and agile rate alignment to protect the currency peg and reserve adequacy amid heightened global uncertainty. On financial sector policy, regulations to implement the Financial Institutions and Markets Act are described as near completion, supporting full implementation by mid-2026, and progress on Anti-Money Laundering and Countering the Financing of Terrorism frameworks is intended to support Namibia’s exit from the Financial Action Task Force grey list this year.
International Monetary Fund 2026-03-27
International Monetary Fund Article IV mission urges Namibia to intensify fiscal consolidation and safeguard the currency peg
An International Monetary Fund (IMF) mission to Namibia reported subdued GDP growth and rising inflation due to weak diamond demand and higher fuel prices. The fiscal deficit widened in FY25/26, prompting recommendations for fiscal consolidation and expenditure restraint. The IMF also noted progress on financial regulations and anti-money laundering frameworks, aiming for Namibia's exit from the Financial Action Task Force grey list.