N$121,1m available for struggling businesses

The Bank of Namibia (BoN) has N$121,1 million left for its small and medium enterprise (SME) economic recovery loan scheme.

The fund initially received N$500 million, with N$378,9 million having already been disbursed to struggling businesses.

“The funds have been allocated to key sectors, including agriculture, manufacturing and retail and services, providing much-needed financial relief and enabling these enterprises to sustain operations, protect jobs and contribute to overall economic recovery,” BoN governor Johannes !Gawaxab said during an engagement between the bank and the parliamentary standing committee on economics and public administration yesterday.

!Gawaxab provided an update on domestic and global economic forecasts, with growth projected to slow to 3,7% in 2024 due to factors like drought and a weak global demand for minerals.

However, a recovery to 4,1% is expected in 2025.

Globally, the outlook is for steady growth, but below pre-pandemic levels, posing challenges for Namibia’s exports.

The governor said the repo rate and inflation levels are currently significantly lower than those seen in the 1990s and 2000s.

“The lower repo rates observed before and during the Covid-19 period have contributed to the perception that the recent increases in the repo rate are unprecedented,” !Gawaxab said.

“However, the recent decreases in inflation are encouraging and if this trend continues, it could create a more favourable environment for relief in the future,” he said.

According to !Gawaxab, Namibia’s financial system remains resilient, stable and sound despite slower economic growth.

“The banking sector, in particular, maintained a strong position throughout 2023, exceeding capital and liquidity requirements. Profitability also remained solid due to higher net income, especially from interest earnings,” he said.

The governor said the bank is currently in the final year of its strategic plan (2022-2024) and has made significant progress in four key focus areas.

These include regulatory improvements, legal framework enhancements, strong stakeholder engagement and organisational efficiency.

“The bank has achieved regulatory improvements, legal framework enhancements and strong stakeholder engagement,” !Gawaxab said.

The discussions also covered the implementation of new financial regulations, such as the Payment System Management Act, the Virtual Assets Act and the Banking Institutions Act.

According to the statement issued by the bank, the parliamentary committee inquired about its role in advising the government on oil and gas ventures and the impact of public debt on the country’s finances.