#JustIn: Global weaknesses could impact Nam’s financial system

Although Namibia's financial system remained sound and resilient in 2022, there are concerns that possible weaknesses in the global financial system could have an impact on the country's domestic financial system.

According to latest Financial Stability Report, released this morning by the Bank of Namibia (BoN) and the Namibia Financial Institutions Supervisory Authority (Namfisa): “Risks are centred around global and domestic output developments, coupled with anticipated tighter financial conditions globally, as both the global and the Namibian economies are projected to slow down in 2023.”

Despite the decrease in global output, the domestic output in 2022 showed improvement, and the domestic financial system continued to operate effectively and efficiently, the BoN and Namfisa said.

During the reporting period, there was an increase in both corporate and household debt.

The banking sector maintained adequate capitalisation and profitability, and also managed credit risk effectively, while maintaining liquidity levels above the required standard.

Non-bank financial institutions also demonstrated stable, sound and profitable operations.

Additionally, the payment system infrastructure continued to contribute to the efficiency of the financial system.

Overall, the risks to the financial system increased during this period, with a medium probability of persisting and medium impact, the BoN and Namfisa said.