Government Must Give Namibia’s Economy Breathing Space

I understand that government cannot simply wish away the realities of international markets. Namibia imports virtually all of its petroleum products, and we therefore remain exposed to movements in international oil prices, shipping costs, geopolitical tensions and the exchange rate.

But I also understand something else: when the operating environment becomes exceptionally difficult, government has a responsibility to create breathing space for the economy.

That is why the decision by South Africa to temporarily reduce its fuel levy deserves serious consideration in Namibia.

South Africa is not pretending that it can control the international price of oil. It is recognising that when an external shock threatens households and businesses, government has instruments at its disposal to soften the blow.

From November 4, South Africa will temporarily reduce the fuel levy by R3 per litre on diesel and R1.50 on petrol, before gradually reducing the relief through January 5, 2027. The intervention will be funded through R10 billion redirected from the Central Energy Fund. It follows an earlier fuel-tax intervention between April and June.

The question for Namibia is simple:

Why can’t we do something similar?

This is not an argument for reckless spending or an open-ended fuel subsidy. Nor is it an argument that Namibia should copy South Africa mechanically. Our fiscal circumstances are different, our market is smaller and our fuel-pricing architecture is different.

But the economic problem confronting businesses and households is remarkably similar.

Namibia has already experienced a dramatic increase in fuel prices during 2026. Petrol at Walvis Bay was N$19.58 per litre when the Middle East conflict began in February. By October, it had reached N$26.58. Diesel 50ppm rose from N$19.63 to N$27.86, while diesel 10ppm went from N$19.73 to N$27.96.

That is not a marginal increase.

For a business that operates vehicles, generators, earthmoving equipment, trucks or agricultural machinery, fuel is not a luxury. It is an input cost.

And when that input cost rises dramatically, it does not remain at the fuel station.

It travels through the economy.

The trucker pays more. The farmer pays more. The construction company pays more. The mine pays more. The manufacturer pays more. The retailer pays more. Ultimately, the consumer pays more.

We are already seeing this transmission.

Transport was identified as the biggest contributor to Namibia’s recent inflation increase, with transport prices rising 13.2% year-on-year. Petrol and diesel prices were 25.1% higher than a year earlier, while public transport fares increased by 14.9%.

For businesses, the consequences are even more immediate.

A construction company cannot simply decide to use less diesel when its excavator is required to complete a project. A transport operator cannot tell a truck to consume less fuel while travelling the same distance. A mine cannot switch off its haul trucks because international oil prices have risen.

These businesses can improve efficiency, but there is a limit to efficiency.

As Cirrus Capital economist Ida Williams has pointed out, transport and logistics companies often operate close to maximum efficiency, leaving little room to reduce fuel consumption. Agriculture and mining are similarly exposed because much of their machinery is diesel-dependent.

This is why I believe Namibia should seriously examine a temporary fuel-relief mechanism.

And there is an important precedent within Namibia itself.

Government already reduced fuel levies by 50% between April and June 2026. That intervention cost more than N$1 billion, according to reporting based on the fuel-price breakdown.

In other words, Namibia has already demonstrated that it can use the fuel-levy system as a counter-cyclical instrument.

The issue now is whether we can use it intelligently.

I would therefore appeal to the government to consider a temporary reduction of selected fuel levies for three months, with a review after each month.

It need not be as dramatic as the South African intervention.

It could be calibrated according to fiscal capacity.

For example, government could consider temporarily reducing the fuel levy, road-user charges or other components under its control, particularly on diesel, which is so critical to productive sectors of the economy.

The intervention could also be structured differently for petrol and diesel.

The objective should not be to make fuel artificially cheap. The objective should be to prevent an extraordinary international shock from becoming an extraordinary domestic economic shock.

And there is another reason why this deserves consideration.

Namibia has already taken steps to reduce the underlying cost of importing fuel.

The government’s bulk-supply arrangements have reportedly generated substantial savings. The Vitol arrangement was estimated to have saved between N$400 million and N$700 million, while TotalEnergies, which will supply Namibia from November to January, offered discounts estimated to save approximately N$220.5 million.

This is precisely the kind of intervention that should be built upon.

If government can negotiate better bulk procurement terms and simultaneously provide temporary fiscal relief, the combined effect could offer meaningful breathing space without creating a permanent hole in the fiscus.

But transparency must accompany such intervention.

Any fuel-relief programme should clearly state how much it costs the taxpayer, how long it will last, which levy or levies are being reduced, where the money is coming from and what conditions will trigger its withdrawal.

There must be an exit strategy.

This is particularly important because Namibia also needs the revenue generated from fuel levies to maintain its roads. Government’s own budget framework recognises that fuel levy revenues are allocated to the Road Fund Administration to finance road infrastructure.

We therefore cannot solve today’s fuel crisis by creating tomorrow’s infrastructure crisis.

But neither should we protect today’s fiscal position at the expense of tomorrow’s businesses.

That is the balance government must find.

As entrepreneurs, we are not asking government to remove all risk from doing business. Risk is part of entrepreneurship. We are asking for an economic environment in which viable businesses have a reasonable chance of surviving extraordinary external shocks.

Government itself has already recognised the importance of cushioning industry. In October, it kept diesel prices unchanged despite higher import costs, specifically acknowledging diesel’s importance to factories and producers.

That logic should now be extended.

A temporary fuel-relief programme would not only assist motorists. It would help contain transport costs, protect business margins, support construction, agriculture and mining, and potentially moderate the inflationary pressure being passed on to consumers.

Most importantly, it would send a message to the productive economy:

Government understands what you are facing and is prepared to share some of the burden during an exceptional period.

South Africa has decided that R10 billion can be deployed temporarily to cushion households and businesses from the fuel shock.

Namibia is obviously not South Africa. We cannot spend like South Africa, nor should we.

But we can learn from the principle.

When circumstances are extraordinary, policy responses sometimes have to be extraordinary too.

I therefore appeal to government, as an entrepreneur and as someone invested in the success of the Namibian economy: look at the numbers, examine the available fiscal space, engage business, consult the fuel industry and consider a temporary, transparent and targeted reduction in fuel-related levies.

Not forever.

Not recklessly.

Not as a political gift.

But as an economic bridge until international conditions normalise.

Because when the price of fuel rises by nearly 40%, the question is no longer simply what it costs to fill a tank.

The real question is what it is costing Namibia to keep its economy moving.