We forecast that real GDP growth will slow to 4.2% in 2011. Diamond output will increase modestly to 1.6m carats and uranium production will expand by 7% to around 5,650 tonnes-less than previously forecast owing to lower ore grades and extraction rates at the Rössing mine. Overall mining output should expand by 6%, as two copper mines, closed at the end of 2009, have resumed production and output of gold, zinc concentrates and fluorspar will increase. The 2010/11 wet season recorded above-average rainfall, but flood damage to crops and livestock in northern Namibia during March-April is likely to affect agricultural output. Despite improved stocks and landings, fishing output, which is largely exported, will again contract, although more modestly than in 2010, owing to weak demand in the main European markets. The commissioning of the Ohorongo cement plant in February and the planned doubling of capacity at the Tsumeb copper smelter will boost manufacturing growth to 6%. These projects, as well as government spending on infrastructure, will raise construction growth to 5%.

In 2012 real GDP growth will increase to 4.6%, provided that demand for minerals continues to grow and prices remain strong. Diamond output will increase only to 1.7m carats, but uranium production will increase by 10% to 6,400 tonnes, owing mainly to Langer Heinrich's full-year Stage 3 output. Copper production from the reopened mines will also increase, and a boost to manganese production is also planned. Without a significant rise in the total allowable catch, the fishing sector will record modest growth at best. Manufacturing growth will rise to 7.5% with the first full year's production by Ohorongo and the expanded Tsumeb smelter, along with higher output by diamond cutters. Construction sector growth will expand to 7% owing to heavy government spending on infrastructure and the likely start of construction at the Husab and Etango-and possibly Valencia-uranium mines. The nuclear emergency at Japan's Fukushima plant will not, we believe, affect China's nuclear power programme, which is driving world uranium demand. Tertiary-sector growth will also remain strong, as high levels of public spending will boost growth in the government sector.