CREATING ENDURING MACROECONOMIC STABILITY TO SUPPORT SUSTAINABLE DEVELOPMENT
It is with great honour that I present the Bank of Namibia 2024 Annual Report, in accordance with Section 67 (1) of the Bank of Namibia Act (No 1 of 2020). The year 2024 has been profoundly shaped by a series of key events that have signifi cant implications for our mandate. Geopolitical tensions and economic fragmentation, coupled with prevailing policy uncertainties on the global stage, have created a complex landscape. Domestically, we faced the demise of the sitting President, Dr Hage G. Geingob, and subsequently welcomed Dr Nangolo Mbumba as our fourth President. Additionally, presidential and national assembly elections were held amid severe drought conditions, which were ultimately declared an emergency.
The year also marks the conclusion of our three-year strategic cycle (2022-2024). Throughout this period, we performed robustly across strategic, operational and fi nancial dimensions. Our key activities align with our strategic themes, focusing on four purpose, stakeholder engagement, talent and transformation and achieving future-fi t organisational effi ciency and effectiveness. In this regard, the pillar of purpose is reflected in the decline of headline inflation, from the high levels of 6.1 percent and 5.9 percent in 2022 and 2023, respectively, to average 4.2 percent in 2024, with projections indicating a further decrease to an average of 4.0 percent in 2025. The banking system remains stable and sound, further supported by the fi nalisation of our Macroprudential Framework, including plans for a national Crisis Simulation exercise set for 2025.
GRegarding digital transformation, we have made notable advances in leveraging new technologies to enhance our operational and supervisory capabilities. Our approach to stakeholder engagement has also evolved, as we strive to bolster public trust and understanding regarding the central bank’s role and functions while effectively communicating monetary policy and immersing ourselves in the community.
As we envision creating a future-fi t organisation, we recognise that while the core and statutory responsibilities of the Bank of Namibia remain steadfast, the methods through which we fulfi l our mandate have fundamentally transformed. In response, we in 2022 established a new department focused on Strategy, Projects and Transformation (SPT) to facilitate this shift, fostering a culture of agility, collaboration and trust.
Intelligent Technologies
The emergence of Intelligent Technologies, including Quantum Computing and Machine Learning, represents a key structural transformation with signifi cant relevance to the Bank. Artifi cial Intelligence (AI) is now at the forefront of how business is conducted, as models have evolved from mere analytical tools designed for specifi c tasks to sophisticated generative AI systems capable of performing human-like functions.
Within Namibia’s fi nancial sector, AI has been employed mainly to detect fraud, enhance compliance and streamline regulatory reporting processes. AI influences the mandate of the Bank of Namibia in two fundamental ways. Firstly, as the steward of the Namibian economy, AI enhances productivity, complements skill sets, and boosts overall economic activity, promoting innovation and growth.
Secondly, the diverse application of AI within the Bank of Namibia encompasses an extensive range of operational functions, particularly in data collection and analysis, economic forecasting, payments oversight, reserves management, banking oversight, fi nancial system supervision, currency production and communication.
As we look to the future, it is imperative that we harness these transformative technologies to safeguard our objectives and ensure that we remain agile and responsive to the everevolving landscape. While AI offers enormous opportunities, it also introduces various risks inclusive of cyber and data governance risks, and it is important that we put guard rails in place to mitigate these risks.
Concluding remark
As we embrace 2025 and beyond, the Bank of Namibia is poised to navigate an evolving fi nancial landscape with a proactive and future-ready approach. Anchored in our statutory mandate, our 2025-2027 strategy sets a clear path toward a smarter central bank, a more inclusive and resilient fi nancial system and embracing a diversifi ed economy. With digital and cultural transformation as enablers, this strategy is not just a vision but a commitment to delivering tangible progress and creating enduring macroeconomic stability.
Key initiatives emanating from this strategy for delivery over the next three years include Namibia’s fi rst Fast Payment System, issuing commemorative currency, reviewing the current banknotes and coins, modernising our headquarters with cutting edge facilities – (money museum, Knowledge Centre, Auditorium, and Innovation Hub) - launching Retail Bonds and implementing a Central Securities Depository (CSD) in collaboration with the Namibian Stock Exchange.
With a strong foundation and dynamic roadmap, the Bank is ready to turn the vision into action, ensuring prosperity for Namibia on the back of enduring macroeconomic stability.
Looking ahead, the Bank remains steadfast in fulfilling its mission through its commitment and dedication to always being a leading central bank committed to a prosperous Namibia. The Bank will strive to fulfil its mission of fostering the stability, integrity, and efficiency of the nation’s monetary, financial and payment systems. Namibia has a small, open economy which is highly exposed to risks arising from various sources, not least climate variability and change, and this requires the Bank to continue to safeguard and maintain price and financial stability for the sustainable economic development of the country.
Johannes !Gawaxab
Governor