The Minister of Finance has predicted a GDP growth rate of 4.5% this year and 4.7% in 2026.
Ericah Shafudah said the strong growth is a result of activities in the mining sector, as uranium and gold prices remain broadly favourable.
According to Minister Shafudah, agriculture is expected to further reinforce the positive outlook because of normalising rainfall patterns.
The wholesale sector is also expected to improve on the back of consumer confidence boosted by tax relief measures implemented in 2024.
"While we welcome the strengthening economic activities, we remain acutely aware of the pervasive and entrenched national challenges such as high unemployment, poverty, and income inequalities. The pace at which the economy has been generating jobs remains glaringly inadequate. In line with the new administration's commitment to solving social challenges, we need to redouble our efforts in fostering conditions to promote job growth through accelerating improvements in the business climate, as well as tax and regulatory frameworks."
Shafudah also commended the improved tax collection between April 2023 and February 2025, totalling N$3 billion through various tax categories through the ongoing tax amnesty programme.
She further said that the budget is being presented in a very challenging fiscal environment from a revenue perspective, with notable headwinds experienced.
"In this regard, we estimate total revenues of N$92.6 billion for FY2025/26, a moderate increase of only 1.9% from the revised estimates of the previous year. The substantial strain on revenues emanated from a N$6.9 billion reduction in SACU receipts, which is confirmed at N$21.1 billion. Similarly, activities in the diamond sector remain subdued, resulting in muted contributions to the fiscus."
However, growth is projected at 5.2% over the Medium Term Expenditure Framework, as moderate increases in SACU revenues and several domestic income streams are in line with the forecasted growth context.
Shafudah revealed that the provisions for the adjusted tax brackets will be postponed to the 2926/27 and 2027/28 financial years of the MTEF, which will provide 712.9 million per annum in direct tax relief to taxpayers.
She also announced a reduction in the non-mining tax rate to 28% to improve Namibia's competitiveness.
"Furthermore, to improve Namibia's competitiveness, we confirm the reduction in the non-mining tax rate to 28% during FY2026/27. This is undertaken concurrently with other measures to broaden the corporate income tax base, including introducing a 30% limit on interest deductions, capping assessed losses carried forward and introducing a 10% dividend tax effective 01 January 2026."
The minister also announced that retirees can now withdraw up to N$375,000 from their pension funds that were set at N$50,000.
This, she says, will provide relief to senior citizens and increase their disposable income.