Namibia has been ranked sixth among African countries with the least external debt burden, latest data from the International Monetary Fund (IMF) shows.
The IMF data shows that in 2024, Namibia’s external debt amounts to only 17.21% of its total GDP.
According to the IMF, the size of a country’s debt can be a cause for concern, but the most important factor is how that debt compares to the country’s economic output (GDP).
On the other hand, a country that brings in much more money than it owes is not only in a sustainable position but also inspires confidence from investors.
This leads to less worry and fewer economic problems when it comes to repaying debt.
Namibia’s external debt is projected to be about N$343.07 billion (US$17.2 billion) in 2024, a decrease from 2023, when it was about N$339.3 billion (US$18 billion) and the GDP was N$494.1 billion (US$26 billion).
Namibia’s external debt is expected to increase by N$54.77 billion (US$2.9 billion) between 2024 and 2029, reaching around N$224.32 billion ($11.29 billion) by 2029.
The government has set aside N$12.8 billion to meet debt service obligations in the 2024/2025 fiscal year, about 14.2% of the revenue and 4.7% of GDP.
According to the Minister of Finance, Iipumbi Shiimi, a large portion of the government’s debt needs to be repaid within the Medium Term Expenditure Framework (MTEF) timeframe.
The biggest upcoming repayment is a US$750 million (N$14.3 billion) Eurobond maturing on 29 October 2025, which is the largest single debt repayment in the country’s history.
“In this regard, we are committed to redirect part of the increase in revenues towards the sinking fund to manage the rollover risk and contain increases in future debt service obligations. This will ensure that we minimise a potentially significant future drain on resources that are desperately needed for infrastructure development, poverty reduction and combating climate change, among others,” Shiimi said at the 2024 budget review.
He further explained that the government will transfer at least N$3.5 billion during the 2024/25 financial year and N$2.0 billion in 2025/26 from SACU receipts to the sinking fund. This aims to repay two-thirds (US$500 million) of the Eurobond at maturity.
The remaining US$250 million will be refinanced using the most cost-effective method in the next financial year, considering the current high-interest rate environment and the need to manage debt servicing costs.
The government will explore options in both domestic markets and through financing from Development Finance Institutions (DFIs).
Meanwhile, Equatorial Guinea has the lowest external debt burden among the listed countries, at 8.23% of GDP.
Botswana follows closely with an external debt of 9.13% of GDP. Zimbabwe has the highest external debt burden on this list, at 20.28% of GDP.
