Local borrowing drives overall public debt

Namibia’s overall government debt is mainly driven by domestic debt, according to data provided by the Ministry of Finance.For the financial year (FY) 2022/23, domestic debt stood at N$105.8 billion, representing 74% of overall government debt (N$142.7 billion). External debt stood at N$36.9 billion in the previous financial year.When finance minister Iipumbu Shiimi tabled the budget for the financial year 2023/24 in February, public debt stock was estimated at N$150.9 billion, which comprised domestic debt of N$113 billion and external debt of N$37.9 billion.During the mid-term budget review, Shiimi stated that public debt stock is projected to increase to N$153.8 billion, equivalent to 66.0% of gross domestic product (GDP), a slight improvement from 67.9% in the previous financial year. Interest payments are projected to increase to N$11.8 billion for the current financial year, of which N$9.3 billion is domestic, while N$1.9 billion is foreign. In the previous financial period, total interest payments stood at N$9.4 billion. “Despite the stabilising ratios owing to improved GDP outcomes, the high public debt levels should still remain central in fiscal policy considerations over the medium term. We will continue to carefully balance between making the necessary provisions to attend to our developmental objectives while maintaining fiscal sustainability,” Shiimi said.Debt managementAccording to Simonis Storm, in the fiscal landscape of Namibia, debt management emerges as a critical concern that warrants immediate and strategic attention.This surge in debt service obligations is particularly concerning as it threatens to crowd out critical social expenditures, such as those in health and social protection sectors, which are pivotal for the nation's long-term development.The Bank of Namibia’s (BoN’s) quarterly report released in September indicated that total government debt stock stood at N$145.6 billion at the end of June 2023, representing an increase of 11.4% during the year under review. The increase on a yearly basis was driven by a rise in the issuance of both Treasury Bills (TBs) and Internal Registered Stock (IRS), coupled with a rise in external debt due to exchange rate depreciation. The Rand, US Dollar and the SDR were the top three currencies in the government’s total external debt stock at the end of June 2023, accounting for percentage shares of 40.6%, 38% and 12.7%, respectively, the central bank said.“The weakening Namibian Dollar, with a USD/N$ rate of 18.75 in the first quarter of 2023/24 from 16.25 in the first quarter 2022/23, exacerbates foreign debt service costs,” Simonis Storm said.-phillep@nmh.com.na

Local borrowing drives overall public debt

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Republikein 2025-09-16

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Local borrowing drives overall public debt

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