Govt successfully raises funds through securities auction

Bank of Namibia

IN a recent move to secure funds, the Namibian government successfully raised N$64 million through its recent auction of internal registered stock (IRS) and inflation-linked bonds (ILBs).

Held yesterday, the auction attracted strong investor interest, with bids totalling N$131 million.

According to the Bank of Namibia, Namibian government securities are issued in the form of treasury bills and IRS.

“Government securities serve as a major means to finance government deficits.

The Namibian government, like any other government, finances its operations largely through taxation and levies.

In cases where revenue received from taxation and levies is less than expenditure, the government finances the difference (the deficit) by issuing government securities.

These securities also provide additional investment avenues for investors,” said the central bank.

The minimum bidding amounts for treasury bills and bonds are N$10 000 and N$50 000, respectively; both increase in multiples of N$10 000.

The government allocated a total of N$64 million to successful bidders out of a pool of 14 bids, with a combined value of N$131 million.

Six bids were successful, five of which received the full amount they requested.

The average terms for successful bids stood at 98,89/9,04.

The ILBs, with various maturity dates like 15 March 2026 and 28 October 2028, saw different outcomes.

Some bonds received full allocation to successful bidders, while others had partial allocations.

The bid to cover ratio, indicating overall demand versus the amount offered, varied across different bonds.

The central bank has said the IRS and ILBs are auctioned off to give both the public and organisations an equal opportunity to invest in government debt.

The Bank of Namibia invites the public to participate in auctions for government debt securities through placing advertisements on its website and forwarding email invitations.

Advertisements are placed one week prior to an auction date and tendering forms are obtained from the central bank’s website and office in Windhoek

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