The International Monetary Fund (IMF) says Namibia’s government debt is expected to decline marginally from 71.8% of GDP in 2022 to 71.7% next year.
The country’s debt to GDP ratio, which was pegged at 68.2% by the Bank of Namibia, is still unsustainably high compared to an average of 55% in sub-Saharan Africa, thus affecting Namibia’s economic growth.
“Public debt has increased steadily in sub-Saharan Africa for more than a decade, rising sharply in recent years owing to increased spending and falling revenues in the wake of the COVID-19 crisis. About half of the countries are expected to undertake some consolidation this year—regionwide deficits are projected to narrow by about ½ percent of GDP after a larger consolidation of about one and quarter percent in 2021, bringing average debt at end-2022 down to around 55% of GDP. Approximately one-third of the region’s economies now have debt levels above 70 percent of GDP,” the IMF said in its latest report.
The IMF report comes a few weeks after the World Bank in its Africa Pulse Report for October 2022 noted that Namibia’s public debt will increase to 78.9% of GDP in 2022.
According to the IMF, Namibia’s real GDP growth is expected at 3% in 2022 and 3.2% in 2023, supported by robust diamond, gold, and uranium production, and rebounding tourism.
“Average inflation would rise to 6.4 percent in 2022 and start to moderate in 2023. The current account deficit would remain large, financed by FDI inflows in oil and gas and one-off transactions. The fiscal deficit is expected to narrow, supported by strengthened tax revenues and fiscal consolidation measures,” the global lender said in its latest Article IV consultations with Namibia.
