Net foreign direct investment (FDI) inflows into Namibia fell sharply in the second quarter of 2025, reflecting reduced equity injections into oil exploration activities, the Bank of Namibia has reported.
According to the central bank’s Quarterly Bulletin for September 2025, net FDI inflows stood at N$6.8 billion, down from N$12.7 billion in the first quarter and N$7.3 billion in the same quarter of 2024.
“The decline reflects lower equity injections by oil exploration operators, as drilling activities, particularly in the Orange Basin, have largely declined, with most of the major oil operators now in the appraisal and data evaluation phase ahead of the final investment decisions expected in 2026,” the Bank said.
The Orange Basin has been the main driver of recent inflows after major discoveries in 2022 at the Graff-1 (Shell) and Venus-1X (TotalEnergies) wells confirmed Namibia’s potential as a significant oil and gas frontier. With operators now shifting from drilling to appraisal and data assessment, FDI flows into the sector have slowed.
The Bank noted that the decline was further compounded by weaker uptake of intercompany loans and higher repayments from companies in the mining and transport sectors. “The decline was further exacerbated by lower uptake of intercompany loans and more repayments from companies in the mining and transport sectors, when compared to the previous quarter,” the bulletin stated.
Primary income outflows also remained high, largely due to dividend payments to foreign shareholders. Net outflows stood at N$4.0 billion, compared to N$991 million in the same quarter of 2024 and N$3.9 billion in the first quarter of 2025.
“This outcome was mainly driven by higher dividend payments by entities in the mining and financial sectors under the foreign direct investment income sub-category. In this regard, the income paid to foreign direct investors rose year-on-year by 58.4% and by 3.0% quarter-on-quarter to N$5.1 billion during the second quarter of 2025,” the Bank said.
Namibia’s gross foreign liabilities rose to N$307.3 billion at the end of June 2025, up 1.4% quarter-on-quarter and 7.9% year-on-year. “At the end of June 2025, the market value of Namibia’s gross foreign liabilities recorded increases both quarter-on-quarter and year-on-year, mainly ascribed to a rise in the stock of direct investment,” the bulletin noted.
Gross external debt also increased to N$184.2 billion, reflecting higher intercompany borrowing by mining and transport firms, along with new foreign trade credit taken up by the private non-banking sector. Long-term debt accounted for 87.1% of the total.
“At the end of the second quarter of 2025, Namibia’s gross external debt stock rose on both an annual and quarterly basis, primarily due to increased intercompany borrowing and the incurrence of new foreign trade credit by the private non-banking sector,” the Bank of Namibia reported.
