Rich in both natural resources and natural wonders, Namibia’s name is derived from what is considered the oldest desert in the world, the Namib. The Atlantic Ocean marks the country’s western boundary, while it shares terrestrial boundaries with Zambia and Angola to the north, Botswana to the east, and South Africa to the south and east.

The south-west African nation was inhabited by various indigenous peoples – among them the San and Herero – prior to European colonisation; then in the late 19th century, it became a German colony, known as German South West Africa.

After World War I, Namibia came under South African rule, and its indigenous populations faced harsh apartheid policies. The South West Africa People’s Organisation led a long struggle for independence, supported by the UN. Namibia finally gained independence in 1990, and has since established a multi-party democracy with political stability. Income inequality and land reform issues, however, remain challenges.

Namibia’s economy relies predominantly on mining, agriculture and tourism, and its top export commodities include diamonds, uranium, copper, gold and fish products, primarily destined for China, South Africa, Botswana, Belgium and Zambia.

‘Namibia’s natural capital is abundant with natural resources stocks – diamonds, uranium, copper, magnesium, zinc, silver, gold, lead, semi-precious stones and industrial minerals; land (8.1% forest cover, as of 2020); and a significant aquatic ecosystem with over 1 570 km of coastline,’ according to a 2023 AfDB report, which adds that the country ‘is endowed with vast renewable energy potential that includes solar, wind, bioenergy, hydropower and green hydrogen’.

Mining accounts for around 10% of Namibia’s GDP annually. Last year saw significant growth of Namibia’s mining industry, which a report by Research and Markets attributes to a 44% surge in diamond production that positively impacted both its turnover and contribution to the GDP. ‘The industry also saw an uptick in exploration expenditure, driven by heightened global interest in Namibia’s critical minerals, influenced by the ongoing global energy transition, as well as the uranium sector, which faces an anticipated supply deficit,’ the report states.

Diamond mining in the country dates back to the early 1900s, when the coastal town of Lüderitz in the south-west became the site of a diamond rush, following which mining magnate Ernest Oppenheimer merged the diamond mining firms in the region into a single entity in 1920. Called the Consolidated Diamond Mines of South West Africa, it was later renamed as CDM, and subsequently became a part of De Beers.

CDM was granted the exclusive right to extract diamonds in Sperrgebiet and went on to uncover diamond-bearing rock formations along the coastline extending north of the Orange river, establishing one of the most extensive diamond resources that has been mined for almost 80 years.

The primary method of diamond mining in Namibia is marine mining, conducted along the coast and a few kilometres west into the sea. Marine sources, in fact, contribute to more than 70% of the country’s diamond production. CDM received its initial offshore mining licence in 1961, leading to the development of various innovations for mining – among them vacuum extractors, dredgers, floating treatment plants and probe drilling platforms. Specialised diamond mining vessels were also constructed to operate in the shallow waters along the coast.

In 1994, CDM and the Namibian government entered into an agreement to establish a new company, Namdeb Diamond Corporation, jointly owned with a 50:50 split. This agreement replaced all De Beers Group mining licences in Namibia and related rights with a consolidated mineral agreement.

Namdeb subsidiary Debmarine Namibia became operational in January 2002, and operates in the offshore mining licence area off the southern coast of Namibia. In 2007, De Beers and Namibia formed another joint venture, known as Namibia DTC, which supplies diamonds to local companies for domestic manufacturing purposes.

According to De Beers, Namibia is home to the richest known marine diamond deposits in the world, estimated at more than 80 million ct. They represent the majority of Namdeb Holdings’ total diamond production and 90% of its diamond resources. De Beers’ interim financial results for 2023 show that production in Namibia ‘increased by 21% to 1.2 million ct (30 June 2022: 1.0 million ct), primarily driven by the contribution from the Benguela Gem vessel, which commenced production in March 2022, and the ongoing ramp-up and expansion of the mining area at the land operations’.

Agriculture also plays a pivotal role in Namibia, providing livelihoods for approximately 70% of the population, primarily in subsistence farming. Key crops cultivated include maize, millet and sorghum.

The country’s agricultural landscape comprises a commercial sector covering 44% of the land but housing only 10% of the population, and a communal sector occupying 41% of the land and accommodating about 60% of the population, according to the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). Challenges in the subsistence sector, such as limited market access and a lack of high-quality drought-resistant seeds, result in low production and income.

Namibia’s livestock industry is both productive and export-oriented, with beef being a significant contributor to livestock exports. Fishing is another vital component of the primary sector, thanks to the rich waters surrounding Namibia. The agricultural sector is a major source of employment, with its contribution to GDP (excluding fishing) ranging from just more than 4% to 6.6% in 2019 over the past five years.

Livestock farming accounts for about two-thirds of agricultural production, while crop farming and forestry make up the remaining third. Additionally, the GIZ notes, meat processing, classified as manufacturing by the Namibian government, contributes an additional 0.2% to 0.4% to GDP.

Another significant contributor to GDP is tourism. With a total area of 824 292 km² and renowned for its diverse landscapes and two UNESCO Heritage sites, the sparsely populated country (just 2.78 million) is characterised by desert landscapes, vast savannahs and rugged coastlines.

Its Namib desert is home to the iconic dunes of Sossusvlei, which stand as some of the tallest in the world. The country also boasts the Etosha National Park, one of Africa’s premier game reserves, teeming with wildlife such as elephant, lion and rhino; the rugged Skeleton Coast, with its shipwrecks and desolate beaches; and the Fish River Canyon.

Eco-tourism, too, is on the rise in Namibia, with responsible and sustainable practices taking centre stage. Community-based conservancies are empowering local populations and contributing to wildlife conservation.

‘The tourism sector is geared towards its recovery with significant and continued increase in the number of international tourist arrivals in the country in the last two years. The government’s and private sector efforts are gradually bearing positive results as the international traveller’s confidence in the destination improves,’ says Pohamba Shifeta, Namibia’s Minister of Environment, Forestry and Tourism. Namibia experienced a 99.4% growth in foreign arrivals in 2022, with a total of 539 601 visitors – up from 270 644 in 2021. Of these arrivals, tourists made up 85.4%, with more than 461 000 international tourist arrivals in 2022.

According to the World Bank, Namibia’s economic growth in 2023 is expected to slow to 2.8% due to factors such as high inflation, monetary tightening and reduced growth in South Africa and Europe. The socio-economic situation hasn’t significantly improved since the 2022 economic recovery, with employment below pre-pandemic levels and high inflation disproportionately affecting vulnerable groups.

The bank adds that global and regional developments, along with reliance on commodity exports and SACU transfers, shape Namibia’s economic performance.

While Namibia has made progress in reducing poverty, deep-rooted issues persist, among them significant inequality and a dual economy, with stark disparities, high poverty, limited human capital and poor access to basic services.

However, with the successful expansion of the Walvis Bay port, Namibia is strategically positioning itself as a conduit to a vast market encompassing more than 345 million individuals in the SADC region and beyond. Its foundational infrastructure, including roads, railways, aviation, energy, and telecoms, is also relatively well-established and modern.

‘The country’s financial markets have been ranked sixth most developed out of 26 African countries evaluated in a 2022 study conducted by the Absa Group,’ according to the Namibia Investment Promotion and Development Board, established by the Namibian government to attract and retain sustainable investment for private sector led and inclusive economic growth.

‘Namibia’s financial system is both robust and profitable, with a wide range of financial markets, instruments, institutions and infrastructure.’

This, combined with a commitment to diversification, investment in human capital and responsible natural resource management, is helping Namibia navigate the path to economic prosperity.

By Nicola-Jane Ford
Images: Gallo/Getty Images