‘New AfDB loan no bailout’

Jo-Maré Duddy – Finance minister Calle Schlettwein yesterday said government’s latest N$2-billion loan approved by the African Development Bank (AfDB) was planned for and wasn’t an emergency attempt to finance the budget deficit.The AfDB on Wednesday released a statement saying its board of directors approved a loan of US$129.4 million or about N$2.011 billion to finance the Namibia Economic Governance and Competitiveness Support Programme (EGCSP).Schlettwein yesterday told Market Watch the bulk of the loan will be used to fund the deficit, while rest will be invested in water infrastructure.Following the latest loan, government’s debt at the AfDB now stands at around N$12 billion, he said.Schlettwein emphasised that the new loan will be paid back in rand and that Namibia therefore would not be exposed to an exchange rate risk. He added that the terms of the loan is “similar” to that of the previous one.‘Good deal’According to the minister, the domestic market didn’t have the capacity fund the loan. The money was lend at favourable rates, he said.“It’s a good deal.”The loan is included in the existing budget and won’t add to government’s debt, Schlettwein said.In his mid-term budget review tabled in October, the budget deficit for 2019/20 was estimated at about N$8.15 billion.Total debt for the current fiscal year was estimated at nearly N$96.3 billion or 48.9% of gross domestic product (GDP). Debt in the coming fiscal year was projected at nearly N$105.1 billion or 51% of GDP. Government’s debt ceiling is 35% of GDP.Schlettwein said he will table the new budget before the end of this month.The director of the governance and public financial management coordination office of the AfDB, Abdoulaye Coulibaly, said the bank was satisfied with government’s progress under the first two phases of the EGCSP programme, “despite the significant economic challenges caused by declining commodity prices, persistent drought and subdued economic activity in Namibia’s main trading partner economies”.jo-mare@republikein.com.na

‘New AfDB loan no bailout’

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Republikein 2025-05-14

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‘New AfDB loan no bailout’

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