Windhoek, Aug 20 (NationPress) Recent tariffs put in place by the United States could significantly impact Namibia's trade balance and government income, especially jeopardizing the nation's polished diamond exports, warned Johannes Gawaxab, the Governor of the Bank of Namibia, on Wednesday.

During a monetary policy discussion, Gawaxab pointed out that the US's imposition of a 15% tariff on polished diamonds may lead to a decline in export volumes and diminish government revenue, as reported by the Xinhua News Agency.

Diamonds contribute approximately 10% to Namibia's Gross Domestic Product (GDP) and account for more than 20% of export income, making them one of the country's most vital sources of foreign exchange and public revenue.

While uranium—another key export—is exempt due to its strategic value to the United States, other products like marble and salt now face increased costs and diminished competitiveness in the US market due to these tariffs, Gawaxab noted.

He cautioned that these trade actions are occurring at a time when Namibia's economy is already experiencing a slowdown, with GDP growth expected to be 3.5% in 2025, a decrease from 3.7% in 2024.

Industry participants at the monetary policy meeting shared similar concerns, indicating that the tariffs could hinder Namibia's export competitiveness in the short run, while advocating for ongoing discussions to assist exporters in overcoming these hurdles.

Beginning August 1, the United States implemented new tariffs on imports from various African nations, including Namibia, under its reciprocal trade policy.

On a more positive note, Namibia's mining sector showed resilience in July, with uranium production surging 36% year-on-year, boosted by stronger gold output and a monthly increase in diamond production, as reported by the Chamber of Mines of Namibia.

The chamber's monthly mining update indicated that uranium continues to be Namibia's leading export, representing 29.3% of the country's exports in May, valued at 3.45 billion Namibian dollars (approximately 196 million US dollars), mainly exported to China.

Additionally, gold production increased by 7% in June compared to both the previous month and the same month last year.

International gold prices averaged 3,352 US dollars per ounce in June, a 44% increase from the previous year, enhancing Namibia's export revenues, according to the chamber.

Diamonds also experienced a 24% monthly increase in production in June; however, annual output continues to decline, with prices dropping 45% since 2022 due to oversupply and competition from lab-grown alternatives.

The chamber noted that diamonds made up 10.2% of exports in May, primarily sold to Botswana, the United Arab Emirates, and Belgium.

Despite the recent reduction of US tariffs on Namibian exports from 21% to 15%, uncertainty remains for exporters due to frequent policy changes.

While this latest adjustment provides some relief, the instability in tariff policies complicates long-term planning and securing trade agreements for Namibian producers.