Namibia’s public debt could rise to 70% of gross domestic product (GDP) by the end of the current financial year if the government fails to implement spending reforms.
Bank of Namibia (BoN) governor Ebson Uanguta yesterday issued this warning during the 2026/27 budget reform roll-out workshop in Windhoek.
He said the country’s debt has already exceeded the 60% benchmark and currently stands at 65.2% of GDP.
“If we do not slow down our debt by the end of the year, it is likely to move up to about 70%,” he said.
Uanguta said the government can no longer rely on borrowing to fund expenditure.
“When we are getting that message, we need to wake up and say there is something we need to do,” he said.
The warning comes two weeks after Fitch Ratings projected Namibia’s government debt would rise to 66% of GDP during the 2026 financial year.
Fitch expects interest payments to consume 18% of government revenue.
The central bank says Namibia’s economy grew by only 1.7% in 2025, below its estimated potential growth rate of around 3%.
Uanguta cautioned the government against borrowing against future oil revenues.
“Even if oil is announced today, let us not borrow in the name of oil,” he said.
Prime minister Elijah Ngurare called for stricter spending controls across the government.
Namibia’s public debt currently stands at N$174.6 billion, representing 65.2% of the country’s GDP. He said the government remains committed to reducing the fiscal deficit from 5.5% of GDP this financial year to 3.3% by 2028/29. According to Ngurare, the government will need to save about N$2.3 billion annually during the current medium-term expenditure framework period through tighter spending controls and expenditure restraint.
He said global developments, including the conflict in the Middle East, are putting Namibia’s finances under additional pressure.
Ngurare stressed that reducing expenditure alone would not solve the problem.
He said the government must also invest in projects that create jobs, improve service delivery, and encourage private sector investment.
Ngurare then announced the introduction of outcome-based budgeting at eight ministries from the second quarter of this year.
The pilot programme will cover the ministries responsible for education, health, home affairs, agriculture, finance, industrialisation, environment, and works and transport.
The approach aims to measure government performance based on results rather than spending levels.
“For too long, public sector performance has been measured by what we spend rather than what we achieve,” Ngurare said.
He also warned ministries against moving money allocated for development projects to cover day-to-day operational costs.
“To ensure impactful fixed capital formation, I want to be unambiguous on one point: The virement of resources from development budgets to fund recurrent operational expenditure, as previously communicated, must be brought to an end,” he said.
Ngurare said funds allocated to infrastructure, schools, roads, water projects and digital systems must remain dedicated to those projects.
He also called for reforms in procurement systems, public enterprises, public service operations and digital government services.
“No government can spend its way to prosperity.
Sustainable development requires a thriving private sector, domestic investment, and foreign capital attracted by a predictable regulatory environment,” he said. Ngurare urged ministries to speed up legislative and regulatory reforms aimed at improving Namibia’s investment climate. Last month, Simonis Storm Securities said Namibia’s debt position remains manageable, although pressure on public finances continues to increase as government borrowing requirements grow.
