Namibia Must Diversify from Diamonds
April 01, 25
(IDEX Online) - Namibia's finance minister called for diversification from diamonds in her budget speech last week (27 March), as she forecast only modest growth in the country's economy.
Ericah Shafudah (pictured) forecast 4.5 per cent growth this year, down from the government's 5.4 per cent figure announced just five months ago.
"The continued weaknesses in the diamond sector and the subsequent adverse impact on domestic activities remain a key source of vulnerability," she said.
"Thus, measures to further diversify the economy will go a long way to lessen the impact [of] external shocks on economic outcomes."
Namibia has exceptional solar energy potential, and could expand its tourism, agriculture and manufacturing sectors.
Tax revenue from diamond sales has declined sharply in response to lower sales, and the Namibia Revenue Agency (NamRA) is forecasting a year-on-year reduction of NAD 6bn (USD 330m) for 2025.
Diamonds account for around 10 per cent of Namibia's GDP, but total revenue from diamonds fell by a half in 2024. Last month Debmarine Namibia, the joint venture between De Beers and the Namibian government, reported a 38 per cent slump in its 2024 revenue.
It blamed weak global demand, especially in China and the US, cheap rough supply from Angola, and the rising popularity of lab growns.