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WINDHOEK (Reuters) - Namibians voted for the second day on Saturday in presidential and parliamentary elections that looked set to keep the ruling party SWAPO in power and hand President Hifikepunye Pohamba five more years at the helm.

Voting closes at 1900 GMT.

The Rally for Democracy and Progress (RDP), which emerged as a breakaway faction of the ruling South West African People's Organization in 2007, is expected to become the new official opposition and could threaten SWAPO's two-thirds majority.

The RDP has tackled some traditional SWAPO strongholds and may present the ruling party with its sternest political challenge yet. Analysts said this would make for a more accountable and transparent government.

"It will be the whole country that will benefit because investors will see stability and no threat of policy reversal, as was the case with Zimbabwe where a single party dominated politics. This will lead to more foreign investment," said Chibamba Kanyama, a political analyst in Zambia.

SWAPO has until now faced little opposition since leading the former German colony and South African protectorate to independence, but criticism of corruption could also threaten its solid majority.

Melissa Basson, a 29-year-old receptionist at a guesthouse in Windhoek, said she voted for the first time this year because she felt that a change in direction was possible.

"We need to ensure that development policies get implemented and Namibians get the services they need including housing, water and health... in all parts of the country," she said.

Rich in resources and located between economic powerhouse South Africa and oil-producing Angola, Namibia has enjoyed a long period of political and economic prosperity that has made its 2.2 million people the envy of many in Africa.

RISE IN POVERTY, UNEMPLOYMENT

Namibia is a big diamond producer and home to 10 percent of the world's uranium output, but the global slowdown has exacerbated poverty and unemployment and widened cracks in the healthcare and education systems.

The economy is expected to contract by 0.6 percent in 2009, before recovering in 2010 on higher commodity prices and a rise in mining output.

Voters said they expected the new government to improve access to clean water, make it possible for children in villages to attend schools beyond primary education and, most important, create more jobs.

While agreeing that the programmes the ruling party has been trying to implement are good, opposition and voters alike have criticised SWAPO's lack of progress.

"SWAPO has been going in the right direction, but we need more of that... especially jobs," said Kennecky Angula, a 46-year-old public service worker.

Voting stations opened on time on Saturday and no problems were reported. "Everything seems to be going very smoothly, very peaceful and according to plan," said Tanki Mothae, a member of the Southern African Development Community (SADC) observer team.

The Electoral Commission of Namibia (ECN) said that for the first time votes would be counted at the polling stations and results would be posted outside them to ensure transparency.

During elections in 2004 in which SWAPO took 55 of the 72 seats, four opposition parties demanded a recount, alleging fraud. The recount confirmed SWAPO as the winner.

Fourteen parties are competing for the 72 seats this year and 12 presidential candidates have been listed.

Initial results will be known a few hours after the polls close. But the ECN said it may take until Wednesday to count all the ballots from the 1.18 million registered voters scattered across the largely desert country, bigger than Texas.