Namibia's Foreign Reserves: Strong Enough to Weather Global Storms-☕ # ISSUE 35

In today’s issue, we bring you a snapshot of Namibia’s economic resilience and innovation, alongside important national developments shaping the country’s future.

Namibia’s foreign reserves remain strong at nearly N$60 billion, providing a solid buffer to sustain the Namibia dollar amid global economic uncertainty. The Bank of Namibia and financial watchdog Namfisa are set to release their 2025 Financial Stability Report, assessing the robustness of the country’s financial system against domestic and international shocks.

In a move to promote community safety, FNB Insurance has partnered with Lefa Transportation Services to offer clients safe travel options through a voucher-based road safety initiative, initially focused in Windhoek.

On the global tech front, the AI market is booming, with generative AI leading rapid growth toward a projected $1 trillion industry by 2030. This surge is driving governments and businesses worldwide to focus on AI policy and workforce development.

Finally, all eyes will be on the President’s upcoming State of the Nation Address, expected to outline key priorities and strategies for Namibia’s continued growth and stability.

Stay with us as we unpack these stories and what they mean for you and Namibia’s future.

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BUSINESS & ECONOMY

Namibia's Foreign Reserves: Strong Enough to Weather Global Storms

Despite heightened global tensions, the Bank of Namibia (BoN) assures that its international reserves remain robust enough to support the local currency against external pressures.

Key Points:

• Healthy Reserves: At the end of March, international reserves stood at N$59.7 billion. While this is a decrease from the N$64.3 billion recorded in January, the BoN attributes the decline to increased imports and government payments.

• Adequate Import Cover: The current level of reserves translates to 3.9 months of import cover, which is deemed adequate to maintain the peg between the Namibia dollar and the South African rand, as well as meet the country’s international financial obligations. This figure exceeds the international benchmark of three months, according to BoN Governor Johannes !Gawaxab.

• Repo Rate Steady: The BoN’s Monetary Policy Committee (MPC) has decided to maintain the repo rate at 6.75%. This decision aims to safeguard the currency peg and support the domestic economy amid ongoing global uncertainty.

• Economic Review: The MPC’s decision followed a thorough assessment of current and expected domestic, regional, and global economic developments.

• Subdued Credit Extension: Private sector credit extension (PSCE) has remained unchanged at 3.8% since the previous MPC meeting. Commercial banks are expected to maintain prime lending rates at 10.50%.

• Global Uncertainty: !Gawaxab acknowledged the challenging global landscape, stating, "We are facing uncertain times and turbulence, and trade tariffs will directly and indirectly impact Namibia and the global economy."

• GDP Growth: Real gross domestic product (GDP) expanded by a solid 3.7% in 2024, compared to 4.4% in 2023. The merchandise trade deficit narrowed to N$4.6 billion.

• Currency Depreciation: Since the start of April, the Namibia dollar has depreciated against major currencies due to heightened global trade tensions and uncertainty. !Gawaxab noted that recent exchange rates are weaker than those observed at the previous meeting.

• Rising Inflation: The inflation rate has edged up to 4.2% in March 2025, compared to 3.2% in January 2025. Key drivers of inflation include housing, food, transport, and alcoholic beverages.

• Revised Inflation Forecasts: The average inflation forecasts for both 2025 and 2026 have been revised upwards to 4.2% and 4.5%, respectively. This adjustment reflects a weaker exchange rate and higher administered price assumptions, according to !Gawaxab.

The Bottom Line:

Despite a slight dip in international reserves and rising inflationary pressures, Namibia’s financial position remains stable. The Bank of Namibia is committed to using monetary policy tools to maintain currency stability and support economic growth amid ongoing global uncertainty.

Source: The Namibian

Namibia's Financial Stability Under Scrutiny in New Report

The Bank of Namibia (BoN) and the Namibia Financial Institutions Supervisory Authority (Namfisa) are poised to release their annual Financial Stability Report (FSR), offering insights into the resilience of Namibia's financial system amidst a volatile global economic landscape.

Key Highlights:

• Official Launch: The 2025 Financial Stability Report will be officially launched on Thursday, in a collaborative effort between the Bank of Namibia and Namfisa.

• Report Theme: Themed "Safeguarding Financial Stability in a Changing Global Landscape," the report provides a comprehensive analysis of the risks and vulnerabilities facing Namibia’s financial system.

• Systemic Assessment: The FSR assesses the financial system's ability to withstand both domestic and global shocks, providing a detailed overview of its overall health.

• Key Indicators: The report highlights trends in financial soundness indicators of domestic banking institutions, presents results of stress test simulations, and explores key developments within the non-bank financial institutions sector.

• Commitment to Stability: "The release of the FSR reaffirms the commitment of the bank and Namfisa to protect the integrity and stability of Namibia’s financial system, promote transparency, and strengthen public confidence in financial oversight," the institutions stated jointly.

The Bottom Line:

The upcoming Financial Stability Report from the Bank of Namibia and Namfisa will provide a crucial assessment of the country's financial system, offering stakeholders insights into its strengths, weaknesses, and ability to navigate an increasingly uncertain global economic environment. The report underscores the commitment of both institutions to maintaining a stable and transparent financial system for the benefit of all Namibians.

Source: The Namibian

FNB Insurance and Lefa Partner for Road Safety Initiative

FNB Insurance Namibia has joined forces with Lefa Transportation Services to launch a road safety initiative, providing FNB clients with safe travel options through a voucher-based benefit system.

Key Highlights:

• Partnership Aim: The collaboration between FNB Insurance and Lefa aims to promote road safety among FNB Insurance clients by offering them access to safe and reliable transportation services.

• Voucher System: FNB Insurance clients will receive two Lefa vouchers per month, enabling them to use Lefa drivers for safe transportation to their homes or other destinations.

• Windhoek Focus (Initially): While the benefit is currently focused on Windhoek, it is available to all FNB Insurance clients with vehicle coverage.

• Safe Transportation: The initiative allows clients to have a safe way to get home after socializing or to utilize the service for family benefits, such as transporting children safely.

• Responsible Driving: Lefa’s marketing manager, Iyaloo Magongo, emphasized the company’s passion for making urban mobility safer and more convenient, highlighting the partnership’s role in promoting responsible driving.

• Support for SMEs: Lefa founder Melkisedek Ausiku expressed gratitude to FNB Insurance for supporting local small and medium enterprises (SMEs), encouraging more corporations to partner with SMEs.

• Community Safety: FNB Insurance marketing manager Ileni Shithigona highlighted the broader purpose of the partnership, stating, “This is about more than just adding value for our clients. It’s about doing our part to keep all Namibians safe on our roads.”

The Bottom Line:

FNB Insurance Namibia's partnership with Lefa underscores a commitment to road safety and community well-being. By providing clients with accessible, safe transportation options, the initiative aims to reduce road accidents and promote responsible behavior, while also supporting local SMEs.

Source: The Namibian

TECH

AI Market Boom: Trillion-Dollar Growth, Generative AI Leads the Charge

The artificial intelligence (AI) industry is experiencing explosive growth, with projections showing the global market could surpass $1.8 trillion by 2030, driven by a compound annual growth rate of over 36%. Estimates from multiple research firms suggest the market will easily top $1 trillion by the end of the decade, fundamentally reshaping economies and industries worldwide.

Generative AI is the Fastest-Growing Segment

Generative AI—technologies that create new content, code, and data—is accelerating faster than any other segment, rapidly being adopted across enterprises and creative industries. Despite this momentum, the sector faces persistent hardware shortages and a global talent gap, which could slow deployment in some regions

Policy and Skills Take Center Stage

Governments and companies are responding by prioritizing AI policy, regulation, and workforce upskilling to meet surging demand. Countries in North America, Asia-Pacific, and Europe are investing heavily in AI education, ethical frameworks, and infrastructure to ensure they remain competitive and can harness AI’s economic benefits.

The Bottom Line

AI is not just a trend—it’s a transformative force poised to add up to $15.7 trillion to the global economy by 2030. As businesses rush to integrate AI into operations, and policymakers race to develop responsible guidelines, the next five years will determine who leads in the AI-powered future.

Source: Statista

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