In her recent budget speech, Namibia’s Finance Minister, Ericah Shafudah, emphasized the urgent need for economic diversification as the country faces continued challenges in its diamond sector. She forecasted only 4.5% growth for 2025, a downward revision from the previously projected 5.4%. The diamond industry, which contributes about 10% of Namibia’s GDP, has been facing several headwinds, including weak global demand, particularly from key markets like China and the US, increased competition from Angola’s cheap rough supply, and the growing popularity of lab-grown diamonds.

The slump in the diamond sector has had a significant impact on domestic activities, with total revenue from diamonds halving in 2024. Debmarine Namibia, the joint venture between De Beers and the Namibian government, reported a 38% decline in its revenue last year. This decline has been reflected in the country’s tax revenues, with Namibia’s Revenue Agency (NamRA) forecasting a reduction of NAD 6 billion (approximately USD 330 million) for 2025.

Minister Shafudah’s speech highlighted the urgent need for diversification, with Namibia possessing exceptional solar energy potential, along with opportunities for growth in tourism, agriculture, and manufacturing. By focusing on these sectors, Namibia aims to reduce its reliance on diamonds and build a more resilient economy capable of withstanding fluctuations in global commodity markets.