Namibia has been severely hit by the COVID-19 pandemic but has started to gradually recover. After a sharp contraction in 2020, with worsening fiscal imbalances and socio-economic disparities, a modest recovery began in 2021 and strengthened in the first half of 2022. Mining activity rebounded while manufacturing and tertiary sector activities gradually started to recover. Inflationary pressures have increased, as higher international oil and food prices due to Russia’s war in Ukraine were passed-through. The political context remains stable, with elections scheduled in 2024.
The COVID-19 pandemic has sharply deteriorated Namibia’s short-term macroeconomic outlook, giving rise to urgent balance of payments (BOP) and fiscal financing needs. After an initial outbreak peaked in August, a second wave hit in late 2020. Containment measures have negatively impacted domestic consumption and economic activity, weighing on tax revenues collection. Furthermore, worsening global conditions have hindered mining production and exports, tourism receipts, and investment inflows. The economy is expected to have sharply contracted by 7.2 percent in 2020, and the recovery is set to remain subdued in 2021.