Government debt rises, external sector shows signs of strain, says Bank of Namibia

Namibia’s central government debt stock has risen significantly in the fiscal year ending in March 2025.

The debt reached N$166.7 billion – an 8.3% increase year-on-year, largely driven by the increased issuance of treasury bills and internal registered stock, according to the Bank of Namibia (BoN).

“As a share of GDP, the total government debt increased to 66.3% by the end of March 2025,” says Bank of Namibia spokesperson Kazembire Zemburuka.

“While this is expected to moderate to 61.4% over the medium-term expenditure framework period, it still exceeds the SADC convergence threshold of 60%,” Zemburuka says.

Despite the overall rise, external debt levels saw a modest decline, aided by repayments to the International Monetary Fund and a stronger Namibia dollar.

Meanwhile, government loan guarantees fell slightly to 3.4% of the country’s gross domestic product, remaining well below the set ceiling of 10%, signalling a low risk of contingent liabilities.

Namibia’s external sector, however, showed signs of pressure.

The current account deficit widened to N$15.2 billion during the first quarter of 2025, up from N$11.2 billion in rhe first quarter of 2024, mainly due to higher outflows related to oil exploration in the Orange Basin and increased dividend payments to foreign investors.

Although the financial account recorded notable inflows, primarily from foreign direct investment, these were insufficient to offset the ballooning current account deficit. Consequently, the stock of international reserves declined by 5.2%, settling at N$59.7 billion by the end of March and further dropping to N$57.4 billion in May 2025.

This translated into an import cover of 3.9 months, or 4.2 months when excluding oil-related external funding.

“The real effective exchange rate appreciated by 3.1% year-on-year, indicating a loss in trade competitiveness of Namibian products,” adds Zemburuka.

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