Photo: Reuters
Photo: Reuters

Public debt to moderate to 56.4% by 2027

Ogone Tlhage
Namibia’s public debt is expected to moderate to 56.4% by the end of the 2027 fiscal year, on account of the rise in nominal gross domestic product (GDP).

This assessment was made by the Bank of Namibia (BoN), which said public debt would come down to 60.1% of GDP by the end of this fiscal year.

“Going forward, the total debt stock is anticipated to moderate to 60.1% of GDP at the end of fiscal year 2024/25, but then, given the primary surpluses on the budget with a faster rise in nominal GDP and some large debt redemptions coming up, total debt as a percentage of GDP is estimated to moderate every year to reach 56.4% of GDP at the end of 2026/27,” it noted.

Despite the expectations in debt reduction, the debt stock of the central government continued to increase during the first quarter of the fiscal year 2024/25, across both domestic and external debt.

“The total government debt stock stood at N$157.6 billion at the end of June, representing an increase of 8.3% when compared to the corresponding period in the previous fiscal year."

According to the central bank, the increase on a yearly basis was driven by a rise in domestic debt owing to the issuance of both Treasury Bills and Internal Registered Stock in line with the government's borrowing requirement. “Meanwhile, the rise in external debt mainly was ascribed to the disbursement of a KFW loan for budget support as well as for direct project financing,” the BoN said.

On a quarterly basis, total central government debt rose by 2.5% from N$153.8 billion, mainly owing to a rise in domestic debt. Total debt as a percentage of GDP declined by 1.1 percentage point on a yearly basis to 61.3% at the end of June, owing to faster growth in GDP compared to the rise in debt over the period under review.

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Namibian Sun 2024-11-14

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