The Bank of Namibia will start accumulating gold as part of its foreign exchange reserve management strategy.
Governor Johannes !Gawaxab said the move to include gold, targeting 3% of net forex reserves, aligns with global central banking trends, given gold’s strategic value in hedging against inflation and enhancing resilience during economic shocks.
!Gawaxab, who met the presidency on Friday, May 2, 2025, said the real gross domestic product (GDP) growth slightly moderated to 3.1% in the fourth quarter of 2024, compared to 3.2% in the preceding quarter.
He said, nevertheless, the economy maintained a positive growth trajectory in the first quarter of 2025, supported mainly by strong performance in the mining sector, particularly uranium, gold and zinc, as well as notable gains in construction, wholesale and retail trade, communication and tourism.
According to the April 2025 economic outlook, the domestic economy is projected to grow by 3.8% and 4% in 2025 and 2026, respectively, from a 3.7% estimated in 2024.
The latest projections for 2025 and 2026 reflect a downward revision of 0.2 and 0.5 percentage points from forecasts published in the December 2024 economic outlook update, reflecting heightened uncertainty emanating from global trade policy shifts.
“Inflation accelerated to 4.2% in March 2025, largely driven by increases in food, alcoholic beverages, transport, and housing prices,” said the Governor. “Looking ahead, we have revised our average inflation forecasts for 2025 and 2026 upwards to 4.2 and 4.5%, respectively.
At the same time, our foreign reserves declined by 5.2% quarter-on-quarter to N$59.7 billion, with the import cover currently estimated at 3.9 months, or 5.2 months, when excluding oil and gas-related imports financed externally.
The Governor further noted that the resulting volatility has placed pressure on the Namibia Dollar, remarking that the depreciation will likely raise the cost of imports, fuel inflationary pressures, and widen the current account deficit if left unchecked.
He underscored the importance of proactively pursuing a more diversified export strategy and deepening engagement in global trade diplomacy to safeguard Namibia’s economic resilience in shifting global dynamics.
