The Bank of Namibia (BoN) is worried about the risks posed to the positive economic outlook by challenges such as water supply disruptions, looming droughts, and infrastructure constraints.

The central bank's top management, led by Governor Johannes !Gawaxab, flagged this during a courtesy call on President Hage Geingob at State House.

Although economic activity improved during the first four months of 2023, challenges including water supply disruption, a looming drought, and infrastructure constraints could impact future projections.

The domestic economy is projected to moderate to 3% in 2023 due to slower growth in primary and secondary industries, not to mention the inflation that is primarily driven by food and housing prices.

Governor !Gawaxab briefed President Geingob that, in response, the Central Bank has taken appropriate, though unpopular, decisions to raise interest rates in order to counter inflationary pressures.

This decision is to further safeguard the one-to-one link between the Namibian Dollar and the South African Rand.

!Gawaxab also shared the central bank's strategic initiatives and their implementation to address financial inclusion in rural areas and the informal economy.

The Bank of Namibia has further initiated strategies, which it says are meant to enhance the uptake of cost-efficient payment services and reduce dependence on cash.