Economic growth: What to expect in 2024
A look into the year ahead
The reopening of the Langer Heinrich mine may drive growth, while more oil exploration work is expected to be conducted.
The reopening of the Langer Heinrich mine is expected to fuel economic growth in 2024 as uranium prices reach 15-year highs and bring the mine out of care and maintenance. Giving its outlook for the year, PSG Konsult said developments in the uranium market could spur growth in the mining sector in 2024, backed by a renewed interest in nuclear energy following the Conference of the Parties (COP) Summit held in Dubai last year.
“Uranium prices are at a 15-year high, which bodes well for local uranium production, with bullish uranium analysts expecting continued price growth next year on the back of pledges from 20 countries to triple nuclear energy by 2050 following the recent COP28 summit in Dubai. Paladin Energy plans to reopen its Langer Heinrich mine in quarter 1 of 2024, which will bring the number of operating uranium mines in Namibia back to three,” PSG said.
Oil and gas exploration frenzy
Renewed interest in Namibia as an oil and gas exploration destination would also largely see the deployment of drilling rigs to Namibia, PSG said.
“Looking ahead, continued growth in oil exploration is probable, as the Minister of Mines and Energy has stated that as many as five oil drilling rigs could be operating in the Orange Basin at the start of the year – up from a record three in 2023. The Orange Basin could attract further interest from oil companies if TotalEnergies's and Shell's oil well appraisals in the first half of 2024 yield positive results,” PSG said.
The phased closure of the B2Gold’s Otjikoto Gold Mine would affect the mining sector, notably gold production, PSG said. The slow in demand for diamonds would also affect the sector, with expectations that mining company De Beers that is likely to curb supply in 2024.
So long, B2Gold
“We anticipate a slowdown in gold and diamond mining in 2024. The Otjikoto gold mine – one of only two operating gold mines in the country – is scheduled to start a phased closure in 2024, which will hit overall gold production next year. As mentioned before in our Economic Focus report in November, the diamond market is facing low prices and several other challenges, which will prompt De Beers to curb supply to diamond buyers in 2024,” it said.
The tourism sector and demand for credit domestically is also viewed as a factor likely driving growth in 2024, PSG said.
“The robust expansion in the mining sector is gradually paving the way for enhanced activity and improved earnings in the broader economy. While current indicators such as credit demand and domestic tourism may not fully reflect this progress, they are poised for a positive shift. The underlying economy, though currently subdued, holds potential for growth,” PSG said.
Calls to diversify the economy
Simonis Storm in its outlook cautioned that Namibia’s reliance on the mining sector left it vulnerable to external shocks.
“In the third quarter of 2023, Namibia's economy displayed resilience, largely due to the strength of its primary industries, particularly in mining and agriculture. However, this reliance on natural resources also leaves the economy vulnerable to external market fluctuations,” Simonis Storm said.
Policymakers were advised to turn Namibia’s focus towards diversifying its economic activities to guard against future economic shocks.
“Namibia's economic success will depend on diversifying its economic activities, managing external vulnerabilities, and fostering sustainable growth across all sectors. This approach is vital for building a resilient and balanced economy," Simonis Storm said.