Namibia could be forced to increase electricity imports and face further tariff hikes if El Niño conditions reduce hydropower generation at Ruacana, adding to mounting energy and food price pressures.
Standard Bank Namibia Group Economist Helena Mboti said expected drought conditions could reduce electricity generation at Ruacana to levels insufficient to meet domestic demand, increasing Namibia’s reliance on imported power.
“Moreover, for Namibia this implies we are unlikely to generate enough electricity at Ruacana to meet domestic needs and would require increased electricity imports, which means electricity tariffs may increase further depending on the length of the drought,” Mboti said.
The warning comes as the World Meteorological Organization forecasts a near-100% probability that El Niño conditions will persist through late 2026 and into early 2027, with further strengthening expected before peaking towards the end of the year.
Mboti said prolonged dry conditions could also put pressure on agricultural production and drive food prices higher across the region, adding another source of inflationary pressure for Namibian consumers.
The potential impact on electricity supply comes as Namibia is already experiencing rising inflation, with annual headline inflation accelerating to 5.0% in August 2026 from 4.4% in July and 3.2% in August 2025.
Transport inflation was the biggest driver, surging to 13.2% in August, while food inflation increased to 4.0% from 3.7% in July.
Mboti said the balance of risks to Namibia’s inflation outlook is increasingly tilted to the upside as energy and food-related pressures build.
Standard Bank expects headline inflation to average above 4% but below 5% in 2026 before rising to around 5% in 2027, with food prices expected to contribute to the increase.
