International Trade in Namibia

News Related to International Trade in Namibia

Business outline for Namibia

Economic Overview

The Namibian economy slowed down significantly following the beginning of the recession, which has lead to a decline in the mining sector demand, as well as in tourism. After shrinking by 0.8% in 2009, growth became again positive in 2010, reaching 4.4% and should become more stable in the coming years.

The Namibian government launched a medium term economic plan in 2008, the Third National Development Plan (NDP3), which covers the period of 2008-12 and aims at transforming Namibia into an industrialized nation by 2030. The 2010-2011 budget, which is as ambitious as the previous one, foresees a budget deficit of 7.1% of the GDP. Emphasis is placed on the development of education, the defense sector and healthcare.

Namibia is a poor country, where income inequalities are amongst the highest in the world. HIV affects almost 20% of the population and the unemployment rate is more than 30%.

FDI in Figures

With government support, foreign investment in Namibia continued to raise in 2008, increasing the FDI stocks in terms of GDP percentage. However, the global recession has caused FDI to diminish since 2007. With the progress of the economic recovery, this trend should be reversed.

The country enjoys great political stability and significant mining resources. Although officially the country welcomes foreign investment, the government favors investors who form partnerships with local companies. Moreover, the expropriation of white-owned farms is a serious deterrent.

The mining sector attracts most of the foreign investment. The main investor countries are South Africa, Great Britain, the USA and Germany.

Foreign Trade Overview

Namibia is very open to foreign trade as witnessed by the goods imports which account for 40% of the GDP. It is a member of the SACU (Southern African Customs Union) and SADC (Southern Afrian Development Community), whose free-trade zone (FTZ) was inaugurated in 2008.   

Government policies have been pro-active in encouraging trade. Some of these initiatives include the Private Sector Development Program, the Foreign Investment Act and Export Processing Zone Act. Customs duties are relatively low and there are no trade barriers. The country's economy is closely linked to South Africa's, with the Namibian dollar being on par with the South African Rand.

Until 2008 and due to the export of its mineral resources, Namibia had a fairlyt balanced trade balance (GDP surplus of 1.2% in 2006 and a 2.0% GDP deficit in 2007). The increase in oil prices in 2008, then the fall in raw material demand have nevertheless made the trade balance deficit plummet, and it is expected to remain negative in the coming years.

The country's main trading partners are the European Union, SADC (Southern Africa Community Development) and China.