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A significant portion of government debt is due for repayment over the medium term.

The N$14.3 billion Eurobond, due on October 29, 2025, is the largest single-day debt maturity in the history of Namibia.

Tabling the national budget in the National Assembly, Finance and Public Enterprises Minister Iipumbu Shiimi pointed out strong growth in the gross domestic product, supported by improvements in tax collection measures by the Namibia Revenue Authority. These, he said, have led to significant improvements in several revenue streams. 

Shiimi noted that the government is committed to redirecting part of the increase in revenues towards a sinking fund to manage the rollover risk and contain increases in future debt service obligations.

"This will ensure that we minimise a potentially significant future drain on resources that are desperately needed for infrastructure development, poverty reduction, and combating climate change, among others. Accordingly, the government will transmit at least N$3.5 billion during FY2024/25 and some N$2.0 billion in FY2025/26 of the SACU receipts to the sinking fund to place us in a position to retire two-thirds of the Eurobond (US$500 million) at maturity. Consequently, the remaining one-third of the bond (US$250 million) will be refinanced using the most cost-effective instrument in the next financial year, cognizant of the prevailing high-interest rate environment and the need to manage debt servicing costs. In this regard, consideration will also be given to the domestic markets as well as financing from Development Finance Institutions (DFIs)."

According to the Finance Minister, difficult economic conditions over the past years have culminated in a reduced pace of public investments, as evidenced by a persistently small and falling development budget.


"As a result, there has been significant underinvestment in critical infrastructure. Subsequently, a key priority over the MTEF is to make the necessary provisions to accelerate infrastructure development and unlock lasting social and economic value for the country."

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Author
Peter Denk