CHARMAINE NGATJIHEUE and LAZARUS AMUKESHE MINISTER of finance Iipumbu Shiimi says the African Development Bank’s approval of a N$1,5 billion loan to Namibia comes at an opportune time as the country is starting the process of rebuilding the economy.
He said the funds would, among others, be used to implement the Harambee Prosperity Plan II.
The AfDB approved the loan application to help address the economic fallout from Covid-19, and to enable Namibia to maintain welfare programmes.
The loan is repayable over 15 years and was approved on 17 March 2021.
According to Ministry of Finance spokesperson Tonateni Shidhudhu, the government approached the Abidjan-headquartered bank in June last year seeking financial support through the Covid-19 Rapid Response Facility (CRF).
“This request was unanimously approved by the board of directors of the African Development Bank as a loan to finance the Namibia Governance and Economic Recovery Support Programme (GERSP),” he said.
The approval follows the completion of the Economic Governance and Competitiveness Support Programme (2017-2020), which, according to Shidhudhu, has achieved significant results in the areas of fiscal consolidation, public financial management and improvement in the business environment.
“However, the Covid-19 pandemic threatens to reverse some of those gains. As the country prepares for the post-pandemic era, the government is pursuing reforms in a wide range of areas,” he said.
The proposed economic recovery programme is designed to support the government’s response and to help achieve inclusive post-pandemic economic recovery through improved governance and real sector reforms.
The three main areas of focus are fiscal sustainability, private sector-led agriculture and industrial-sector transformation, and economic and social inclusion.
Shidhudhu said: “It will help to create fiscal space to finance critical development spending, implement reforms that will help to maintain macroeconomic stability, transform key sectors, such as agriculture and industry, and improve economic and social inclusion.”
Shiimi on Friday said the International Monetary Fund (IMF) would respond to the government’s N$4,5 billion loan request in about three weeks.
It has been almost nine months since the government submitted the request to the Washington-based fund for the first time in 30 years since Namibia became a member in 1990.
Shiimi said the state is in talks with the IMF and that there is progress.
Tabling the 2021/22 national budget last Wednesday, Shiimi said debt is still growing, and is expected to reach N$130 billion for the aforementioned fiscal year.
