Local banks bridge N$6 billion Eurobond gap

Namibia has successfully redeemed its US$750-million (approximately N$14.3-billion) Eurobond, issued in 2015 at a 5.25% coupon rate, marking the largest single debt maturity in the nation’s history.

According to the Ministry of Finance, a sinking fund accumulated US$444 million (around N$8.4 billion) towards the repayment.

To close the remaining US$306 million (approximately N$5.9 billion) funding gap, the government has invited proposals from local commercial banks, resulting in Standard Bank Namibia providing N$3 billion, FNB Namibia offering N$1.5 billion, and Bank Windhoek, in partnership with Absa, contributing another N$1.5 billion towards the redemption.

Finance minister Ericah Shafudah says the settlement reaffirms Namibia’s fiscal credibility and the strength of its domestic financial system.

“This redemption represents our unwavering commitment to fiscal discipline, strategic foresight, and prudent debt management,” she says.

Shafudah commends the local banking sector for its support, describing the process as a vote of confidence in the country’s fiscal direction.

“The response from our local commercial banks was robust and competitive, reflecting confidence in Namibia’s fiscal direction,” she says.

The 2015 Eurobond followed Namibia’s first international issuance in 2011, which raised US$500 million at 5.5% and was redeemed in 2021. Unlike the earlier bond, the 2015 issue was settled through a combination of savings and domestic borrowing rather than new foreign debt.

“Through prudent fiscal management, we established a sinking fund that accumulated US$444 million to meet our obligations without compromising service delivery or macroeconomic stability,” Shafudah says.

She says financing the bond domestically avoided exposure to volatile global markets and helped protect Namibia’s foreign reserves.

“This strategy preserved our foreign reserves, reduced exchange-rate exposure, and reinforced investor confidence in Namibia’s creditworthiness,” the minister says.

Following the payout, Namibia’s debt profile is expected to shift to an 85:15 ratio, with domestic debt now exceeding foreign obligations.

“Our domestic financial system continues to evolve into a more resilient, competitive, and dynamic market capable of supporting long-term development,” Shafudah says.

Bank of Namibia deputy governor Ebson Uanguta describes the redemption as a milestone that strengthens Namibia’s reputation in global markets and lays the groundwork for future financial innovation.

“The timely redemption of the Eurobond is a financial transaction, yes, but it is also a very powerful signal of our country’s resolve to honour its obligations, safeguard its creditworthiness, and create a stable platform for future growth,” he says.

He stresses that credibility remains Namibia’s “ultimate currency” amid global financial tightening and shifting capital flows.

“The redemption of the Eurobond is not an end in itself. It is an inflection point, a bridge between the stability we have built and the transformation we now desire. Our journey with capital markets continues,” he says.

Uanguta urges policymakers to promote innovation in Namibia’s financial system, including the adoption of green finance and sustainability-linked instruments that align debt management with climate and development goals.

“Our journey with capital markets must now be guided by new ambitions to mobilise capital for sustainable growth, to pioneer green finance instruments, and to align debt policy with climate and development goals,” he says.

He also emphasises the need for continued fiscal prudence, debt management discipline, and structural reforms to attract private investment and support job creation.

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