A decade of decline, recovery and new opportunities
Once a major contributor to economic activity and employment, Namibia’s construction industry has been forced to adapt to changing market conditions while facing persistent challenges including skills shortages, housing demand and project delays.
Namibia’s construction industry entered the second half of the 2010s under significant pressure. Following years of infrastructure expansion, particularly during the government’s large-scale development drive, activity began slowing as public-sector spending tightened and economic growth weakened.
In 2016, construction contributed about 3.1% to Namibia’s gross domestic product (GDP), employing an estimated 63 000 people. However, the sector entered a prolonged downturn as government capital expenditure declined and private investment slowed. By 2023, construction’s contribution to GDP had fallen to around 1.4%, while employment was estimated at approximately 28 000 workers.
The decline reflected wider economic pressures. Namibia’s economy experienced subdued growth after the commodity boom ended, while government infrastructure spending was constrained by fiscal pressures. Large projects that had previously supported the construction sector became less frequent, placing pressure on contractors, suppliers and skilled workers.
The housing challenge
Despite the slowdown, demand for construction remained strong, particularly in housing. Namibia continued to face a significant housing shortage as urban populations expanded and more people moved towards towns and cities in search of employment and services.
Local authorities, especially Windhoek, Walvis Bay, Swakopmund and Oshakati, continued approving residential developments, but affordability remained a major obstacle. Rising material costs, limited access to serviced land and high borrowing costs restricted many households’ ability to enter the formal housing market.
In Windhoek, building activity showed signs of recovery in 2024. Analysis by Simonis Storm Securities indicated that building plan approvals increased by 3.5% year-on-year in the first quarter of 2024 after several quarters of decline. In May 2024, 199 building plans valued at N$164.5 million were approved, with residential additions and new houses accounting for most applications.
The Covid-19 pandemic delivered another setback to an already weakened sector. Construction projects faced delays due to restrictions, supply chain disruptions and rising costs of imported materials.
The pandemic affected the availability of cement, steel and other construction inputs, while companies struggled with reduced cash flow and postponed projects. Smaller contractors were particularly vulnerable, with many facing financial difficulties as private and public projects slowed.
However, the post-pandemic period also created new opportunities as governments and businesses focused on economic recovery, infrastructure development and investment.
A sector seeking investment
Government remains one of the biggest drivers of construction activity in Namibia. Roads, water infrastructure, housing developments, schools and public facilities continue to provide opportunities for contractors.
In the 2024/25 financial year, government allocated billions of Namibia dollars towards development expenditure, including infrastructure projects. However, despite a planned government injection of about N$6.2 billion into construction-related activities, the sector continued to experience slow growth in the short term.
The Bank of Namibia reported that construction contracted by 0.2% in 2023 but forecast stronger growth ahead, supported by increased activity in mining, electricity and government projects. Growth of 8.5% was projected for 2025.
Mining and energy reshape the future
The discovery of major offshore oil prospects and growing investment in renewable energy have created renewed optimism for Namibia’s construction sector.
The energy transition, including green hydrogen developments, has opened opportunities for engineering, civil works, infrastructure development and specialised construction services. Large-scale energy projects require roads, ports, housing, processing facilities and supporting infrastructure.
The mining sector is also expected to remain a key contributor. Expansion projects in uranium, lithium, copper and other minerals require construction expertise, from processing plants and accommodation facilities to transport infrastructure.
Offshore oil exploration has further increased demand for support infrastructure, particularly around ports such as Walvis Bay and Lüderitz. Increased exploration activity has already placed pressure on logistics capacity and created demand for additional industrial facilities.
A growing trend within Namibia’s construction industry is the move towards greener, more efficient buildings.
Architects, developers and engineers are increasingly incorporating renewable energy, water-saving systems, passive cooling designs and environmentally responsible materials into projects.
The country’s harsh climate has encouraged innovation, with energy efficiency becoming a practical necessity rather than simply a design preference. Green building certifications, including ratings from the Green Building Council of South Africa, have gained attention among commercial developers seeking to reduce operating costs and improve sustainability.
Skills and transformation
Despite future opportunities, the construction industry continues to face structural challenges.
A shortage of specialised skills, limited local manufacturing capacity and dependence on imported materials remain concerns. Industry stakeholders have repeatedly called for stronger technical training, improved contractor development programmes and greater participation by local companies.
Youth employment is another key issue. With Namibia facing high unemployment levels, the construction sector has potential to create jobs if investment is matched with skills development and apprenticeship opportunities.
Looking ahead
After nearly a decade of contraction, Namibia’s construction industry stands at a turning point. The sector’s future will depend on whether emerging opportunities in mining, renewable energy, housing and infrastructure translate into actual projects on the ground.
The industry has moved from a period defined by decline and uncertainty to one shaped by cautious optimism. While challenges remain, construction is once again positioned as a critical contributor to Namibia’s economic development.
The next phase will require more than bricks and concrete. It will require innovation, skilled people, sustainable practices and partnerships between government, private investors and communities.
For an industry that has spent much of the past decade rebuilding itself, the foundations for growth are finally being laid.
SOURCES: Namibia Statistics Agency (NSA) – National Accounts and building statistics; Bank of Namibia – Economic Outlook reports; Simonis Storm Securities – Building plan analysis; Reuters – Energy sector infrastructure developments in Namibia.
