Moody’s Ratings has upgraded Namibia’s sovereign credit rating outlook from stable to positive, maintaining the current rating at B1.
Minister of Finance and Public Enterprises Iipumbu Shiimi said the upgrade reflects Namibia’s improved economic growth prospects, driven by higher commodity prices, renewed investments in traditional mining industries, and potential advancements in hydrocarbon and renewable energy resources.
He highlighted that the positive outlook is a testament to the government’s responsible financial management, low public debt and an investor-friendly policy framework.
“The investment grade rating reflects the government’s track record of responsible financial management and maintenance of low public debt as well as an investor-friendly policy framework, reinforced by political and economic stability as well as steady economic growth prospects,” he noted.
He said this comes after Namibia’s economy, which heavily relies on mineral exports, has faced challenges due to volatile commodity prices.
“Following the 2016/2017 economic recession and the downturn in commodity prices, Namibia’s economy weakened, and public debt levels rose, leading to increased debt servicing costs. This situation resulted in a negative adjustment of the country’s credit outlook and a downgrade in August 2017 from Baa3 to Ba1,” he explained.
He added that the government has since implemented an economic growth strategy and post-COVID-19 policy reforms to revive economic activities and enhance government revenue.
“These efforts have paid off, as evidenced by the nation’s real GDP growth, which rebounded with an average growth rate of 4.4% between 2021 and 2023. Additionally, inflation has decelerated, with the headline CPI inflation around 5.3 % year-on-year as of December 2023,” Shiimi said.
The finance Ministry reforms, including the establishment of an autonomous revenue agency, NamRA, have also boosted revenue recovery. Shiimi said this coupled with the SACU revenue component, has improved both fiscal and external buffers.
“The fiscal deficit has narrowed to around 3.0%, stabilising government debt stock at about 60% of GDP with expectations of further reduction,” the Minister added.
The government’s concerted efforts towards fiscal sustainability and economic recovery, alongside the development of new industries, have produced substantial outcomes.
“Notably, promising oil and gas developments and investments in the renewable energy sector are poised to transform the Namibian economy over the next decade,” stated Shiimi.
He noted that Namibia has engaged with two credit rating agencies, Moody’s Ratings and Fitch Ratings, since 2011 to ensure transparency and credibility in measuring the government’s ability to meet its debt obligations.
