Namibia’s public debt is forecast to increase from N$144 billion in FY2023/24 to approximately N$168 billion by FY2025/26, according to Simonis Storm.
Junior Economist at Simonis Storm, Almandro Jansen, said the rise comes despite incremental gains in GDP growth and a moderate recovery in reserve buffers, reflecting ongoing structural pressures in the fiscal landscape.
He noted that this projected trajectory implies a debt-to-GDP ratio between 68% and 68.5%, with the risk of breaching the 70% threshold by FY2026/27.
Furthermore, such levels raise concerns over long-term fiscal sustainability and whether financial markets can continue absorbing high volumes of government issuance.
This comes as Namibia’s fiscal pressures have been driven by three consecutive years of elevated borrowing aimed at financing recurring budget deficits, settling external debt, and advancing delayed infrastructure projects.
Between FY2023/24 and FY2025/26, gross borrowing is expected to more than double, deepening the country’s exposure to domestic debt markets.
In FY2023/24, borrowing requirements stood at N$10.1 billion, 73% of which was raised through domestic issuances.
This rose to N$15.3 billion in FY2024/25, with N$12.8 billion sourced locally. For FY2025/26, the government expects to borrow N$29.8 billion, N$21.2 billion from domestic bonds and N$8.6 billion through external instruments.
“We are seeing a compounding effect from multiple structural factors, not just a wider deficit. This includes debt service crowding out development spending, concentrated redemption risks, Eurobond amortisation pressure, and frontloaded infrastructure execution,” said Jansen.
The debt service burden is projected to reach N$13.7 billion in FY2025/26, exceeding the total development budget.
“This reflects a rising stock of debt, paired with a shift toward more costly market-based, non-concessional financing. Meanwhile, maturing benchmark instruments such as GC25 and GI25 will require refinancing to maintain liquidity and yield curve integrity,” noted the firm.
Meanwhile, Namibia’s 2015-issued US$750 million Eurobond will also mature in October 2025.
Jansen noted that while the Sinking Fund is expected to cover approximately US$463 million of the obligation, a residual funding gap of N$2.3 to N$2.5 billion must be closed through new issuance or concessional finance.
“Interest payments in FY2025/26 are projected to reach N$13.7 billion, now surpassing total development expenditure. The rising interest burden reflects both a growing debt stock and an increasing share of market-based, non-concessional financing,” said Jansen.
He added that these maturities represent one of the most significant liquidity challenges on the 2025 sovereign calendar.
Capital expenditure has been accelerated after prolonged delays in FY2022/23 and FY2023/24, with spending ramping up in critical sectors such as roads, energy, and water infrastructure.
While this supports near-term GDP growth, the firm noted that it also increases financing needs and places additional stress on the fiscal position.
Simonis Storm noted that the country’s fiscal buffer has narrowed significantly, with borrowing increasingly reliant on rollover mechanisms.
Going forward, Simonis Storm advises that Namibia anchor investor confidence and restore debt sustainability by reducing the fiscal deficit to between 3.0% and 3.5% of GDP by FY2026/27.
“To secure investor confidence and anchor debt sustainability, we believe Namibia through better revenue mobilisation and controlled non-productive spending; accelerate capital budget execution; link borrowing more directly to growth; diversify the funding base; modernise the tax framework; and mitigate contingent risks,” said Jansen.
