The Public Debt Servicing Bill has increased beyond the levels anticipated in the National Budget.

Finance Minister Iipimbu Shiimi says this is commensurate with a rising debt portfolio coupled with the prevailing tight financial conditions.

Shiimi pointed out that, as a result, interest payments have increased by N$1.7 billion to N$11.8 billion for the 2023–2024 financial year.

This equals 15% of the projected revenues for this financial year.

"Debt servicing costs continue to absorb an increasing portion of the resource envelope, now exceeding expenditure on key social services such as health and social protection. As a developmental state, it is important to always prioritise economic and social development objectives in the design of fiscal policy. The degree to which debt servicing is increasingly crowding out such key developmental objectives adds further impetus to the call to prioritise stabilising the pace of debt accumulation going forward."

Treasury is also concerned about a possible significant drop in revenue from the Southern African Customs Union (SACU) for the next financial year.

The exact share for Namibia from the SACU pool in the next financial year will be known in a few weeks.

"The volatility in SACU revenues further underscores the need for Namibia to aggressively diversify her economy with the view to reducing dependence on SACU receipts."

However, the Finance Minister is optimistic that revenue streams will gradually improve in line with a positive economic outlook for Namibia, while ongoing tax administration reforms and associated gains in improved tax compliance are further expected to boost revenue collection in the medium term.