The local economy entered into a technical recession after it contracted by 1.7 percent in both the first and second quarter this year.
In August, Moody's cut Namibia's sovereign credit rating "junk", citing a negative growth outlook and large fiscal deficits.
"After years of exceptional growth, the economy has entered an adjustment phase. Growth is expected to turn slightly negative in 2017," the IMF said in a statement after a mission to Namibia.
The IMF said growth is expected to resume in 2018 and accelerate thereafter to about 4 percent as production from new mines ramps up and manufacturing and retail activities recover.
Downside risks include volatile revenue from the Southern African Customs Union and subdued commodity prices, it said.
It added that strengthening revenue administration, improving budget formulation, expenditure control and carefully managing public enterprises were some of the critical steps to shore up the economy.