Key Megatrends Shaping the 2025 Landscape: A Concise Guide for Investors

By Floris Bergh, Chief Economist at Capricorn Asset Management *

In 2025, rapid restructuring became the norm. The globe underwent significant transformation due to geopolitical changes following the impactful 2024 super-election year, technological disruptions, increasing concerns over climate change, and shifting demographic trends.

Nationally, Namibia has embarked on a fresh chapter with its inaugural budget presented by President Netumbo Nandi-Ndaitwah. The fiscal plan for 2025/26 carries the title “Beyond 35: Towards a Thriving Tomorrow,” underscoring the necessity for significant restructuring alongside investments in young people, all while ensuring sustainable levels of public debt.

This article merges eight major global trends with the current state of Namibia and its national budget, enabling our audience to gain deeper insights into these dynamics and adapt their strategies accordingly. The eight overarching themes are titled using compound terms beginning with “D”. Each theme includes relevant keywords and secondary developments.

1. Distancing & Decoupling:

Clashes. Geopolitical division. Alliance building. Deglobalization. Reshoring. In-sourcing.

Global trade and political tensions have intensified. Nations are moving towards greater self-reliance, and economic groups are reshaping their partnerships. In this scenario, Namibia must manage its ties with the BRICS nations, Western powers, and nearby allies within frameworks such as the AfCFTA, SADC, SACU, and the CMA.

Namibia remains focused on enhancing regional connectivity and strengthening trade resilience. In the fiscal year of 2025/26, approximately N$2.7 billion will be dedicated to transportation infrastructure development, encompassing roadways, railways, and rural accessibility projects. Such investments aim to bolster Namibia’s position as a key logistical and export center within southern Africa.

Anticipated opportunities lie within logistics, infrastructure bonds, and industries related to regional integration. Namibia’s balanced diplomatic stance and focus on exports serve as key advantages in today’s fragmented global landscape.

2. Disorder & Donald:

Disjointed administration. Shifts in ideology. Increasing political danger. Elevated policy unpredictability.

Global politics is becoming increasingly unpredictable, with events like the 2024 US elections and changes in leadership across Africa and beyond adding to this uncertainty. Namibia has navigated its leadership change effectively, complemented by a reform-oriented budget aimed at maintaining stability.

In spite of financial constraints, the budget for 2025/26 ensures operational stability along with strategic investments in young people and social welfare programs. The fiscal shortfall remains fairly controlled at 4.6% of GDP, and projections indicate that public debt will decrease to around 62% of GDP.

Namibia continues to exhibit political stability along with relatively consistent fiscal and monetary policies. It would be advisable for investors to stay involved in areas that gain sustained support through long-term policy commitments, particularly in fields such as education, healthcare, and food production.

3. Demographics & Development:

Changing demographic patterns. The importance of empowering young people. Challenges for development.

In developed markets, ageing populations present a sharp contrast to Namibia’s youthful demographic. Given the exceedingly high rate of youth unemployment, there is an immediate and pressing demand for employment opportunities, educational resources, and food security. However, this situation also represents a significant potential for growth and development.

In 2025/26, the budget allocates N$24.8 billion to education and N$1.3 billion for youth development and sports activities. An amount of N$2.6 billion will go towards agriculture, particularly focusing on expanding green initiatives. This funding underscores significant investments aimed at bolstering human resources and ensuring food safety.

Leverage themes related to skill enhancement, agricultural technology, and youth financing. Opportunities exist for collaborations between the private sector in areas such as vocational training, public-private farm initiatives, and financial products tailored towards students’ needs like housing loans or saving schemes.

4. Disruption & Discontent:

Tech disruptions. Climatic instability. Social unrest. Overhaul.

Across all sectors, industries are experiencing swift transformations. Whether it’s payments and retail, healthcare and energy, technological advancements and decentralization are revolutionizing business strategies, even affecting how governments provide their services. Additional factors like climate threats and civil disturbances contribute to this instability. Moreover, one significant point of frustration stems from stagnant individual incomes which fail to match rising living costs, thereby intensifying socio-economic vulnerabilities.

In fiscal year 2025/26, Health receives N$12.3 billion, encompassing N$780 million for developmental initiatives. The funding highlights environmental concerns and food security through investments in water resources with an allocation of N$956 million as well as support for agriculture. Additionally, new purchasing mechanisms along with pilot programs using digital vouchers are introduced.

Long-term trends such as healthcare systems, online services, and eco-friendly agriculture are key areas to monitor. Investors might want to look into green bonds and mixed financing options that support climate resilience projects.

5. Data & Digitalization:

Artificial intelligence. Control over and access to large datasets. Speeding up of digital transformation.

Artificial intelligence, automation, and digital infrastructure are reshaping economic realities. Namibia can bypass obsolete systems by adopting fintech solutions, electronic government services, and data-driven approaches for delivering public services.

ICT has been allocated N$898 million. The introduction of e-invoicing for VAT-registered businesses is scheduled for 2026. Additionally, VAT collection on imported digital services will commence, ensuring more equitable competition for domestic suppliers.

The digital revolution is unavoidable, spanning areas such as payment systems, data infrastructure, cybersecurity, and technology-enabled advancements in education and healthcare. Businesses aiming for scalability at a local level might discover opportunities in serving regional markets.

6. Debt & Distress:

Financial strain. Increasing debt loads. Limited financing options. Expanded government sector.

Global debt levels remain high, creating pressure on sovereign funding and risk premiums. Governments appear to have an ever-growing appetite for appropriate economic resources, not least of which is for defence spending, while there are clear pockets of debt distress in some regions.

In contrast, Namibia has taken a proactive approach to managing its debts through a well-balanced debt strategy. It is anticipated that public debt will decrease as a proportion of GDP. To retire its $750 million Eurobond due in October 2025, the government plans to use funds from both the sinking fund and borrowings amounting to $125 million from the local capital markets.

The aforementioned amounts along with the deficit lead to a total domestic funding requirement of N$17 billion. Over recent months, the government has witnessed strong interest in its Treasury bills and bonds. However, meeting its financial requirements in fiscal year 2025/26 will require meticulous planning from both the government and its partner, the Bank of Namibia. While we anticipate no immediate crisis, the resultant high yield curve should continue to be appealing when considering risk-adjusted returns. Prospective investors might want to focus on factors such as duration, inflation-linked products, and involvement in infrastructure finance opportunities once they become available.

7. Deflation & Disinflation:

Price increases or decreases. Price hikes have dropped from recent highs. We’re seeing disinflation rather than deflation.

After the COVID-19 pandemic led to inflation and increased interest rates, central banks subsequently relaxed their policies as inflation began to decrease. It remains unclear whether and when economic growth might suffer due to several factors discussed in this report. If such a downturn occurs, there could be a necessity for proactive measures aimed at stimulating the economy to avoid deflation.

By February 2025, Namibia experienced a steady decline in its inflation rate to 3.6%, which provided room for looser monetary policies. This reduction in inflation aids both consumer recuperation and improvement in household financial health. The Bank of Namibia has adopted an accommodating approach consistent with the government budget aimed at boosting local demand and investments.

A reduced-interest-rate setting might bolster stock values, real estate, and long-term debt instruments. It would be prudent for investors to reassess their asset distributions and evaluate if they need to adjust their risk tolerance accordingly.

8. Discount Rate & Discussion:

Increasing interest rates. Non-traditional investments. Changes in capital distribution strategies. Discussion around the riskless return.

Worldwide, investors are reconsidering their conventional approach to asset distribution. There is a renewed focus on yield-generating securities, while demand for alternative investments like private equity, infrastructure, and digital assets keeps increasing.

Namibia’s development budget increased to N$12.8 billion, which remains insufficient and falls short of what is spent on interest payments. This highlights the necessity for the government to consider exploring public-private partnerships and alternative financing methods outside the regular budget for infrastructure projects.

In the future, there will likely be an increasing opportunity for investors to engage in co-investments in infrastructure projects, along with purchasing project bonds and participating in private equity initiatives that align with national priorities. These areas of focus may include housing, energy, transportation, and digital systems.

Turning Realignment into Opportunity:

In light of the global landscape outlined earlier, Namibia’s budget demonstrates both prudent realism and aspirational foresight. By adhering to strict fiscal objectives and concentrating on developmental aims, the nation strives to create a secure setting for investments.

In this evolving landscape marked by decoupling, disruption, demographic imperatives, and digitalization, we feel the greatest prospects emerge from grasping the fundamental transformations rather than merely responding to market fluctuations.

• * Capricorn Asset Management continues as your reliable ally through these transformations. Allow us to assist you in converting today’s adjustments into tomorrow’s opportunities.