Namibia is blessed with rich natural resources, a well-developed physical infrastructure and political stability. The country enjoys a relatively high GDP per capita of US$1,810 (1998), four times as high as the average for sub-Saharan Africa, which classifies Namibia as a middle-income country.

The Namibian economy heavily relies on the primary and the tertiary sectors. Agriculture, especially large-scale commercial livestock farming, fishing and mining are the backbones of the economy, while services account for a major share of GDP. The manufacturing sector is steadily growing and is mainly based on fish, food and meat processing activities.

Economic performance in Namibia is dictated largely by external factors like the weather, oceanic conditions and international commodity prices. In particular, world market prices for diamonds and uranium, of which Namibia is the fifth and sixth largest global producer by value, respectively, have a determining impact on the whole economy.

Average real economic growth amounted to 3.7% per year. Real national income per capita expanded on average by 1.6% over the first 1- years of independence, from N$4,520 in 1990 to N44,884 in 1999. Current evidence points at prospects for strong and positive economic performance. In particular, growth is expected in fishing and mining output, tourism and manufacturing. The attractive EPZ zero-tax regime has already attracted significant investments in manufacturing and re-export operations.

Over the last ten years, the inflation rate averaged 10%. The last five years of the 1990s saw a reduction with an average of 8.3% per year, with a record low of 6.2% in 1998. Due to external pressure, especially rising oil prices, inflation is expected to rise slightly.

Monetary and exchange rate policy in Namibia is influenced by Namibia’s membership of the Common Monetary Area. Under the agreement, the Namibia dollar is pegged on par to the South African Rand and capital flows freely between Namibia and other CMA countries.
South Africa is Namibia’s major trading partner, accounting for at least 85% of imports and 25% of exports. Other main destinations for exports are the UK, Spain, Japan and Germany. The one-to-one parity between the South African Rand and the Namibia Dollar eliminates exchange rate uncertainty and promotes trade and investment flows between the two countries. In addition, membership in the CMA allows Namibia to override exchange controls with less financial implications, than would otherwise be the case.
Namibia has embarked upon a continuous programme of exchange control relaxation. This momentum started with the abolition of the financial rand system in the CMA in 1995 and recently culminated in the accession of Namibia to Article VIII of the IMF’s Articles of Agreement. International investors can invest in Namibia with the confidence that they are not affected by any exchange control measures. Repatriation of capital and dividends occurs freely. Membership in these arrangements further deepens Namibia’s financial integration into the world financial markets.

Namibia’s balance of payments had been yielding surpluses for most years of the 1990s, with strong current account surpluses outweighing net capital outflows. It was only in 1991 and 1992 that the balance of payments registered overall deficits, mainly due to large capital outflows apparently caused by political uncertainties at the time of independence.
A current account surplus on Namibia's balance of payment of around 2% of GDP was maintained during that decade. This was mainly due to the strong performance of primary exports.

Real Gross Fixed Capital Formation grew at an average of 6.5% per year during the 1990s. Most of the investment, however, was directed to the primary sector.