Members of the Bankers Association of Namibia make a substantial, yet often overlooked, contribution to the economy through job creation, tax payments, pension fund investments and reinvestments into the financial system.
The banking sector remained well capitalised, profitable and liquid during the third quarter of 2025, and total assets of the banking sector increased by 3.1% to N$184.7 billion during that reporting period.
There is no doubt that the financial industry’s contribution extends beyond assets. Beyond corporate tax, the sector also collects and remits pay-as-you-earn from employees, staff pay value-added tax when they make purchases, dividends are paid to domestic shareholders, there is pension fund income from bank investments, as well as other contributions spread across multiple sources.
Quantifying the sector’s total economic contribution is challenging, as it would require examining extensive documentation and information that is not always publicly available.
Research provides some insight. A paper published last September in the Journal of Social Sciences found that between 2016 and 2021, the financial and insurance services industry contributed 4.2% to gross domestic product (GDP), making it the third-largest sector.
Over a longer period from 1996 to 2021, the average GDP contribution of the financial sector was 4.2%, ranking it fourth among tertiary industries. The research also noted that the financial and insurance services industry accounted for a large portion of jobs, ranking second out of all tertiary industries between 2012 and 2018.
The Bank of Namibia’s own information indicates that the financial sector contributed on average about 7.1% to the country’s GDP between 2015 and 2024. The central bank defines the financial sector broadly, including commercial banks, non-bank financial institutions, financial markets and payment systems.
A more tangible picture comes from looking at the real impact our members have on daily lives.
The Bank of Namibia’s financial sector transformation strategy for the next decade provides useful insights into the sector’s contribution, which has been growing steadily over the past 13 years.
One measure is looking at how much banks lend to businesses and people compared to the size of the economy.
In 2011, these loans were about 48% of GDP, and in 2024 they remained at 48%. On average between 2011 and 2024, bank loans made up around 53% of the economy.
Another measure looks at all the money in the economy, including cash and savings in banks. In 2024, this was about 64% of GDP, almost the same as in 2011. This is higher than the sub-Saharan Africa average of 54%, showing that Namibia’s financial sector is strong and active.
When we consider employment, more than 6 000 people are employed in the banking sector alone. The combined annual salary bill across five major commercial banks amounts to N$1.842 billion, with N$500 million in annual employee tax contributions to the fiscus to help fund socio-economic projects.
Banks are significant formal employers in Namibia, with people working in head offices, branches, call centres, information and communication technology departments and back offices.
Profitable banks sustain payrolls and can expand hiring in underwriting, digital channels and compliance, while also investing in digital infrastructure to expand access to financial services, especially in rural areas.
In addition, banks offer staff pension schemes that reduce household vulnerability, allowing employees to retire in a far better financial position. Our members also play a role in managing investments, as pension funds and other large investors often own shares or bonds in banks. The profits and interest they earn go back into investments, helping grow retirement savings.
Profitable banks retain earnings to build capital buffers, which supports lending growth, investment in branch and digital infrastructure, and funding for mortgages, small companies and corporates.
As the Bank of Namibia puts it: “A well-developed and deepened financial sector is critical to the effective operation of the Namibian economy.”
However, the health and stability of the financial sector will be meaningless if its overall impact on poverty, inequality and unemployment remains inadequate.
Namibia needs to build on the sound foundation of its financial system to support development in areas with potential for economic structural transformation and inclusive impact.
The Bank of Namibia’s strategy emphasises that, as a well-functioning, inclusive and innovative financial sector, our members can be a fundamental driver of transformation that unlocks opportunities for all Namibians, regardless of their geographic location, income level or economic circumstances.
Our members give back in ways that are often unseen.
Beyond employing staff and contributing to pension funds, they reinvest profits to grow the banking ecosystem and expand access to financial services for all.
As a stable sector, we contribute to economic growth and development – a continuing commitment that we share with the central bank as we seek to help Namibia grow even further.
– Dantagos Jimmy is the chief executive of the Bankers Association of Namibia.
