Namibia's economy is exhibiting a mixed trend, with a significant increase in new business registrations and a decline in factory jobs. According to the Bank of Namibia, 4,578 new businesses were registered between April and June, representing a 27.2% increase compared to the same period last year. This growth is largely driven by close corporations, which saw a substantial rise of 29.9% in registrations.
The increase in business registrations is seen as a measure of business confidence, with the central bank attributing the growth to the introduction of measures aimed at supporting small businesses. The Small and Medium Enterprise Fund was launched to provide qualifying Namibian businesses with grants of between N$50,000 and N$100,000, along with business-development support. This initiative is expected to help small businesses get off the ground and contribute to the country's economic growth.
The growth in new businesses is also reflected in the wholesale and retail sector, where real turnover increased by 8.9% year-on-year during the second quarter. The central bank attributes this improvement to factors such as lower inflation, continued government spending, and increased activity linked to oil and gas exploration. Additionally, employment in the wholesale and retail trade sector rose by 1% year-on-year, with the sector's nominal wage bill increasing by 3.6%.
However, the manufacturing sector tells a different story, with companies continuing to reduce their workforce. Employment in the manufacturing sector decreased by 4.5% year-on-year during the quarter under review, and by 7% compared to the previous quarter. The decline in employment was mainly observed in non-metallic minerals, basic metals, and textiles. Workers who remained in the sector also face pressure on their earnings, with the manufacturing sector's total wage bill falling by 7.4% year-on-year.
The weakness in the manufacturing sector is attributed to various factors, including weak industrial activity and the continued closure of a copper smelting operation. The blister copper smelting plant has remained under care and maintenance since September 2025 due to unfavorable global market conditions. This has had a ripple effect on other parts of the manufacturing sector, with the decline in the wage bill for non-metallic minerals mirroring weak activities in the diamond processing sector.
Despite the job losses and lower wages, the cost of employing workers in manufacturing declined slightly, which could improve the competitiveness of Namibian-made goods. Total unit labor costs for the manufacturing sector decreased marginally by 0.3% year-on-year during the second quarter. This decrease could provide some relief to manufacturers and help them remain competitive in the global market.
The mixed trend in Namibia's economy highlights the need for continued support for small businesses and the manufacturing sector. While the growth in new business registrations is a positive sign, the decline in factory jobs and wages is a concern. The government and the central bank will need to work together to address these challenges and promote sustainable economic growth.
Key points
- New business registrations in Namibia increased by 27.2% in the second quarter.
- The manufacturing sector in Namibia experienced a 4.5% year-on-year decline in employment.
- The cost of employing workers in manufacturing decreased by 0.3% year-on-year.
