Government debt stock declines

The rise in nominal gross domestic product (GDP) relative to the government’s debt stock has resulted in a marginal decline in Namibia’s debt obligations for the month of June.

This is according to the Bank of Namibia’s (BoN) second quarterly bulletin, which shows that Namibia’s debt was able to slow to 61.3%.

“On the fiscal front, the central government’s debt stock and loan guarantees as a percentage of GDP stood lower at the end of June, compared to the same period a year earlier,” BoN said.

“The government debt stock declined to 61.3% of GDP at the end of June from 62.4% during the corresponding period in the previous year, owing to faster growth in nominal GDP compared to the rise in debt over the period under review,” it added.

In terms of the breakdown of government’s debt, in nominal terms, central government debt rose by 8.3% to N$157.6 billion at the end of June on the back of a rise in the issuance of both Treasury Bills (TBs) and Internal Registered Stock (IRS) as well as a rise in external debt.

“The increase in external debt was attributed to the disbursement of loans from [Germany's] KfW Development Bank and a loan from the African Development Bank to finance the deficit,” the central bank noted.

According to the BoN, the government’s total loan guarantees as a percentage of GDP also declined slightly on a yearly basis by 0.5 percentage point to 3.3%. “The decline was due to repayments of domestic loans that were guaranteed by the government for some institutions in the agricultural and transport sectors. Moreover, the decline in foreign loans that were guaranteed for institutions in the communication and transport sectors contributed to the decrease in total government loan guarantees."