PDM’s Hengari alarmed by country’s debt burden

Popular Democratic Movement parliamentarian Inna Hengari says she is concerned about the accelerating debt-servicing burden, calling it an “interest cost trap.”

She said this on Tuesday while contributing to the recently tabled budget in the National Assembly.

Hengari said interest payments are forecast to reach N$16.2 billion in the 2026/27 financial year, equivalent to 17.7% of total revenue, up sharply from N$14.3 billion (16.4%) the previous year.

“Public debt stands at 65.2% of gross domestic product, with 27% held in short-term treasury bills that must be rolled over frequently and at potentially higher rates,” she said.

She added that recent liquidity pressures, such as the N$12.9-billion Eurobond maturity and the N$2-billion International Monetary Fund rapid financing instrument repayment, have already strained reserves and forced difficult trade-offs.

Hengari said this is a classic example, as revenues are under pressure from below while debt costs rise relentlessly from above.

The result, she said, is a shrinking fiscal space that leaves little capacity for counter-cyclical measures, infrastructure renewal, or private-sector stimulus.

She said every additional dollar paid in interest is a dollar unavailable for classrooms, clinics, or job-creating projects.

“If left unchecked, this trajectory risks locking Namibia into a cycle of stagnation where social spending becomes maintenance rather than transformation,”she said.

She said the budget reflects a government under severe strain, attempting to reconcile pressing social needs with weakening fundamentals.

Hengari adds that social allocations show awareness of people’s hardships, yet the structural rigidities, wage-bill dominance and interest payments consume nearly 18% of revenue.

“The N$1.7 billion provided for civil service salary adjustments is overwhelmingly consumption-oriented as it delivers short-term relief but generates almost no multiplier effect toward future growth,” she said.

“Total operational spending now surpassed N$80 billion, accounting for more than 75% of the N$106.1 billion budget envelope.”

By contrast, developmental spending is squeezed to the point of stagnation, she added.

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