Namibia is nearing its N$9.5 billion (US$500 million) target for the sinking fund intended to repay its maturing Eurobond in October 2025, with only N$1.5 billion (US$80 million) left to secure.
Bank of Namibia (BoN) Governor Johannes !Gawaxab confirmed the progress on Wednesday, stating that strategic planning has ensured the country remains on track to meet its obligations.
“We knew it was coming, so we planned accordingly. By October or November 2025, we need to have approximately US$500 million in the sinking fund we established,” he said.
He noted that currently, around US$420 million has already been accumulated, leaving a final gap of US$80 million to be covered within the next several months.
!Gawaxab added that with the sinking fund nearing full capitalisation, the focus now shifts to the government’s strategy for the remaining portion of the Eurobond repayment.
He highlighted that key considerations include whether to roll over the remaining debt or refinance it locally, depending on market conditions.
“The key decision now is what to do with the remaining amount. Do we roll it over? Do we refinance it in the local market? It will largely be an issue of pricing, so we need to determine where we can secure the best terms,” he explained.
This comes after the Ministry of Finance and Public Enterprises last year said the government is prepared to meet its N$13.8 billion (US$750 million) maturing Eurobond obligation on 29 October 2025.
According to Minister Ipumbu Shiimi, the government has employed a savings strategy that involves setting aside funds specifically designated to cover the upcoming maturity, with N$9.5 billion (US$500 million) from the reserves being used to pay off some of the bond.
“What we have been doing is putting some money aside, and we will continue to do so until the date of repayment. We will pay off some of the bond, close to US$500 million, from these savings that we are putting aside,” he said.
He further explained that for the remaining balance of approximately N$4 billion, the government is exploring domestic borrowing options.
This could involve issuing domestic bonds, potentially attracting local pension funds seeking investment opportunities.
“There will be a remainder of US$250 million; that’s the one we’re trying to see if we should convert it into a domestic bond, for instance, so maybe our pension funds here are looking for some domestic instruments so we can borrow from them and repay the bond,” Shiimi said.
It is reported that paying off a significant portion of the Eurobond will bring the debt-to-GDP ratio down to around 56%, which is better than the international standard of 60%.
This will also lead to lower interest payments and reduce the vulnerability of the total debt and interest payments to changes in exchange rates.
