Walvis Bay was administratively part of Southwest Africa from 1922 to 1977, so it was included in OTL census totals for 1960.
The total permanent population of this state would be around 219,873 in 1960. Though given OTL population growth that figure would be around 800,000 at the present.
That's more people than Luxembourg or (geographically a bit more comparable) more than twice as many as Iceland. So, yeah, definitely big enough to be a state.
(I'll note Western Sahara is less insignificant than it used to be: it's increased something like 20-fold since 1960, and the latest estimate is over 600,000. How many of these are immigrants from Morocco or Mauretania, I dunno.)