The World Bank’s Atlas method factors in inflation, exchange rates, population changes, and overall economic performance. For Namibia, slower GDP growth, a decline in diamond output, and a significant population revision were cited as major contributors to the downgrade.
In 2024, Namibia’s GDP grew by 3.7%, down from 4.4% in 2023. Inflation eased from 6.6% to 3.3% during the same period, but this did not significantly boost per capita income. More notably, the mining and quarrying sector, central to Namibia’s economy, contracted by 1.2% in 2024, following a 19.3% surge the previous year, reflecting reduced global demand for diamonds.
Further affecting the country’s income status, the United Nations Population Division revised Namibia’s 2023 population figures upwards by 13.8%. This adjustment led to a 12.9% drop in Atlas GNI per capita, contributing directly to the reclassification.
The late former president Hage Geingob had long criticised Namibia’s upper-middle-income designation, describing it as misleading and unjust. He often argued that the label, based solely on GDP per capita, failed to reflect the country’s entrenched income inequality, largely a legacy of colonial and apartheid-era disparities.
Geingob also lamented that the classification restricted Namibia’s access to concessional funding, including soft loans and grants, which are essential for addressing unemployment, poverty, and inequality.
Source: Africabusinessinsider