Namibia’s sovereign credit rating remains positive

Namibia’s sovereign credit rating has remained stable and positive, according to Moody’s and Fitch ratings.

Moody’s rated Namibia with a B1 earlier this month.

This positive rating comes from the prospect of hydrocarbon and renewable energy resource developments.

Additionally, Moody attributed the positive outlook to an increased likelihood that new industry developments will help bolster growth in other sectors.

“This is while helping to sustain primary budget surpluses and a continued decline in the debt-to-gross domestic product (GDP) ratio,” reads the Bank of Namibia report.

Meanwhile, Fitch gave the country a BB-rating, which means stable.

“Namibia’s rating was supported by governance indicators, institutional frameworks, and fiscal financing flexibility, which were reinforced by its large non-banking financial sector,” reads the report.

According to the report, Namibia’s rating was weighed against a larger budget shortfall and high levels of government debt compared to other similar countries.

“Fitch supports a stable outlook with the view that the government debt-to-GDP ratio will stabilise over the medium term due to positive growth prospects,” reads the report.

A sovereign credit rating is an assessment of the creditworthiness of a country’s ability and willingness to meet its financial obligations, including repaying its debts on time.

The rating provides investors with insights into the level of risk associated with investing in Namibia’s debt.

As of the end of February, Namibia’s total debt stock stood at N$165.9 billion.

This represents more than 60% of GDP.

Included in the tabled 2025/26 national budget is N$13.7 billion in loan repayments.

The International Monetary Fund (IMF) has recommended that an acceptable debt-to-GDP ratio, a common benchmark for developed countries, is around 60%, with 40% suggested for developing and emerging economies.

The country will also have to pay off its Eurobond of US$750 million (about N$14 billion) on 29 October.

Currently, the government has saved up US$463 million (about N$8.6 billion) in the sinking fund over the past financial years.

The government plans to add N$3 billion to the sinking fund during the course of the 2025/26 financial year before the maturity of the bond.

This will leave a balance of N$2.3 billion.

In addition to redeeming the Eurobond, the government is also making substantial principal repayments to settle the IMF Rapid Financial Instrument financing to the tune of N$2.3 billion in the 2025/26 financial year and the final tranche of N$1.2 billion in the 2026/27 financial year.