South Africa occupied the German colony of South-West Africa during World War I and administered it as a mandate until after World War II, when it annexed the territory. In 1966, the Marxist South-West Africa People's Organization (SWAPO) guerrilla group launched a war of independence for the area that became Namibia, but it was not until 1988 that South Africa agreed to end its administration in accordance with a UN peace plan for the entire region. Namibia has been governed by SWAPO since the country won independence in 1990, though the party has dropped much of its Marxist ideology. Prime Minister Hage GEINGOB was elected president in 2014 in a landslide victory, replacing Hifikepunye POHAMBA who stepped down after serving two terms. SWAPO retained its parliamentary super majority in the 2014 elections and established a system of gender parity in parliamentary positions.
Namibia’s economy is heavily dependent on the extraction and processing of minerals for export. Mining accounts for 11.5% of GDP, but provides more than 50% of foreign exchange earnings. Rich alluvial diamond deposits make Namibia a primary source for gem-quality diamonds. Marine diamond mining is increasingly important as the terrestrial diamond supply has dwindled. The rising cost of mining diamonds, especially from the sea, combined with increased diamond production in Russia and China, has reduced profit margins. Namibian authorities have emphasized the need to add value to raw materials, do more in-country manufacturing, and exploit the services market, especially in the logistics and transportation sectors.Namibia is the world's fifth-largest producer of uranium. The Chinese-owned Husab uranium mine is expected to start producing uranium ore in 2017. Once the Husab mine reaches full production, Namibia is expected to become the world’s second-largest producer of uranium. Namibia also produces large quantities of zinc and is a smaller producer of gold and copper. Namibia's economy remains vulnerable to world commodity price fluctuations and drought.Namibia normally imports about 50% of its cereal requirements; in drought years, food shortages are problematic in rural areas. A high per capita GDP, relative to the region, obscures one of the world's most unequal income distributions. A priority of the current government is poverty eradication. Despite a drought, real GDP growth remained strong in 2015 around 5.3% because of construction in the mining and housing sectors coupled with expansionary fiscal policy. GDP growth in 2016 slowed to 1%, however, due to contractions in both the construction and mining sectors, as well as the ongoing drought. Growth is expected to recover modestly in 2017 and 2018.A five-year Millennium Challenge Corporation compact ended in September 2014. As an upper middle income country, Namibia is ineligible for a second compact. The Namibian economy is closely linked to South Africa with the Namibian dollar pegged one-to-one to the South African rand. Namibia receives 30%-40% of its revenues from the Southern African Customs Union (SACU); volatility in the size of Namibia's annual SACU allotment and global mineral prices complicates budget planning.