Economist Mally Likukela unpacked the potential effects and challenges of the 2024/25 budget review tabled by the Minister of Finance, Iipumbu Shiimi, in October last year.

According to him, the budget review is well aligned with the fiscal policy processes.

The minister revised the country's growth projections, lowering them from 4% to 4.6%. 

Likukela, in his analysis, highlighted factors he believes contributed to the downward adjustments.

He elaborated that the Namibian economy is at the mercy of the global demand.

Meaning that, if the global demand is weakening, there is a direct impact on Namibia's economy.

"So when the minister was reviewing for the remainder of the year, he looked at what will happen to the global demand, which is the key driver of our economy. In their assumptions, they have highlighted that the biggest risk to the Namibian economy going forward is weakening global demand. The countries to which we export are not demanding as much as they did, or they will not demand as much as they did because of the challenges they are facing. This weakening demand will lead to lower exports, which will harm the growth of our economy."

Another factor highlighted by Minister Iipumbu Shiimi, which Likukela agrees with, is the drought Namibia faces, stating that Namibia's agriculture sector is drought-sensitive and will not perform as well as anticipated.