…but loses factory jobs
Namibia’s economy is showing two very different sides, with new business registrations rising while the manufacturing sector continues to lose jobs and cut wages.
The Bank of Namibia (BoN) says 4 578 new businesses were registered between April and June, an increase of 27.2% compared with the same period last year.
The central bank says the increase, which is partly seen as a measure of business confidence, is largely driven by close corporations.
“The increase was mainly reflected in the substantial rise in registrations of close corporations, which surged substantially by 29.9%,” the bank says.
Registrations of private companies also increased, although at a slower rate of 6%.
The growth in new businesses comes as the government has introduced measures aimed at helping small businesses get off the ground.
BoN says the Small and Medium Enterprise (SME) Fund was launched to provide qualifying Namibian businesses with grants of between N$50 000 and N$100 000, together with business-development support.
The increased business activity was also reflected in the wholesale and retail sector, where real turnover increased by 8.9% year on year during the second quarter.
The central bank attributes the improvement to factors including lower inflation, continued government spending and increased activity linked to oil and gas exploration.
More business activity also translates into some job creation in the sector.
“Employment in the wholesale and retail trade sector rose, year on year, by 1% ,” the bank says.
The sector’s nominal wage bill also increased by 3.6%.
However, the picture was very different in manufacturing, where companies continued to reduce their workforce.
“Employment in the manufacturing sector decreased, year-on-year, by 4.5% during the quarter under review,” the central bank says.
Manufacturing employment also fell by 7% compared with the previous quarter.
“The decline in employment in this sector was mainly observed in non-metallic minerals, basic metals and textiles,” says BoN.
Workers who remained in the sector also face pressure on their earnings.
The manufacturing sector’s total wage bill fell by 7.4% year-on-year, while average wages declined by 3%.
The central bank linked some of the pressure to weak industrial activity, including the continued closure of a copper smelting operation.
“The blister copper smelting plant remained under care and maintenance since September 2025… due to unfavourable global market conditions, particularly the limited availability of copper ore for smelting,” the bank says.
The weakness also affects other parts of manufacturing.
BoN says the decline in the wage bill for non-metallic minerals “largely mirrors weak activities in the diamond processing sector and the closure of the smelting plant, for the base metals, during the period under review”.
Despite the job losses and lower wages, the cost of employing workers in manufacturing declined slightly, which could improve the competitiveness of Namibian-made goods.
“Total unit labour costs for the manufacturing sector decreased marginally by 0.3 percent year on year during the second quarter of 2026,” the central bank says.
Lower unit labour costs generally mean that businesses can produce goods at a lower cost relative to their output.
But the BoN warns that the benefit could be reduced by movements in the local currency.
“The overall year-on-year decline in unit labour costs for the manufacturing sector is generally good for the competitiveness of Namibia’s products in the export market, but this is complicated by the significant appreciation of the local currency over the same period,” BoN notes.
