The Namibian government has set aside N$13.7 billion for debt servicing in the 2025/26 fiscal year, representing 14.8% of national revenue and 4.9% of Gross Domestic Product (GDP).
Finance Minister Ericah Shafudah raised concerns over the growing debt burden, emphasizing that the country is spending more on debt servicing than on economic development.
“We remain concerned that we expend more resources on debt servicing than we plough back into the economy to grow our economic potential through the development budget,” Shafudah said while tabling the national budget.
She stressed the need for continued efforts to curb debt accumulation and contain rising servicing costs.
“We are, therefore, committed to maintaining public debt on a reduction path and ensuring that debt is raised in the most cost-effective manner,” she added.
In addition to regular debt obligations, Namibia is set to make substantial principal repayments, including N$2.3 billion in 2025/26 and N$1.2 billion in 2026/27 towards settling the International Monetary Fund (IMF) Rapid Financial Instrument (RFI) loan.
“This is added to the periodic redemption of various domestic bonds. We are confident that the envisaged funding approach will stabilize the debt stock over the medium term,” Shafudah said.
The government has also accumulated US$463 million in its Sinking Fund, approaching its US$500 million target, in preparation for the repayment of the US$750 million Eurobond due on October 29, 2025.
Namibia’s total public debt is projected to decline from 66.0% of GDP in 2024/25 to 62.0% in 2025/26. As of February 2025, the country’s total debt stock stood at N$165.9 billion, or 66% of GDP.
Shafudah highlighted that after settling key foreign currency obligations, more than 80% of Namibia’s debt stock will be denominated in local currency, reducing exposure to exchange rate risks.
“We believe domesticating our debt portfolio will strengthen the domestic capital markets while providing an avenue for deploying domestic capital in the domestic economy,” she said.
Despite some improvements, the finance minister warned that maintaining fiscal discipline remains crucial.
“From a sustainability perspective, growth in nominal public debt has stabilized, although as a ratio of GDP, the metrics have deteriorated due to lower nominal GDP outcomes. Going forward, it remains crucial for the fiscal framework to continue maintaining a primary budget surplus over the upcoming MTEF to contain the pace of debt accumulation,” Shafudah said.
