The African Development Bank (AfDB) has called on Namibia to strengthen governance and regulatory oversight in its extractive and energy sectors, warning that the country’s natural resource wealth remains underutilised and vulnerable to global market shocks.
In its newly released 2025 Country Focus Report, the Bank said that while Namibia is the fourth-largest exporter of non-fuel minerals in Africa and the world’s fifth-largest uranium producer, natural capital accounts for just 12 percent of the country’s total capital stock.
“The Namibian economy receives revenue through various taxes from the extractive industry, which provides over 15% of the fiscal revenue,” the report noted. However, it warned that “dependence on commodity exports exposes the country to global volatility”.
The AfDB stressed that stronger institutional and policy frameworks are urgently required to manage resources sustainably.
“Namibia needs to strengthen the regulatory capacities for designing and implementing Environmental and Social Impact Assessments in the extraction of natural resources,” the report said.
The Bank also raised concern over the delayed rollout of Namibia’s carbon market framework, attributing the setback to the lack of viable pricing in the voluntary carbon market.
“The framework is delayed due to the voluntary carbon market not guaranteeing economic prices,” it stated.
While acknowledging Namibia’s ambitions to diversify into green hydrogen, oil and gas, and sustainable tourism, the AfDB cautioned that investment alone would not be enough without proper oversight.
“Namibia uses the UN System of National Accounts 1993 last updated in 2018 with limited accounting for natural capital,” it said.
The report underscored the need for public and private sector collaboration to develop long-term governance strategies, particularly in view of the growing interest in upstream oil exploration. “Improved data collection and capacity building will be essential for comprehensive natural capital accounting to support sustainable development and the long-term well-being of the nation,” it added.
The AfDB welcomed government efforts to reduce fiscal risk through the establishment of the Welwitschia Sovereign Wealth Fund and a debt redemption fund. However, it stressed that these efforts must be matched by sound policy alignment, regulatory enforcement, and transparency.
“Balanced monetary policy and countercyclical fiscal policy would ensure continued price and economic stability, while maintaining fiscal sustainability,” the Bank recommended.
The report concluded that Namibia’s long-term economic future hinges on its ability to translate resource wealth into broad-based development. “A comprehensive strategy must aggressively diversify the economy by investing resource revenues in non-extractive sectors, promoting local value addition, and supporting youth/SMEs,” the AfDB stated.
