Finance Minister Ericah Shafudah says Namibia’s interest payments on debt are expected to reach about N$14.4 billion in the 2025/26 financial year, accounting for roughly 15% of total government revenue.
Addressing lawmakers during her response to parliamentary debates on the Mid-Year Budget Review (MYBR), Shafudah said government is implementing targeted measures under its Debt Sustainability Strategy to manage and gradually reduce the country’s debt burden.
“Concerns were raised about the growing debt and interest payments. We have noted the concerns raised, and the suggestions are being considered as we implement Debt Sustainability Strategies. Indeed, debt servicing or interest payments are consuming a growing share of the budget, approximately N$14.4 billion for FY2025/26, about 15% of revenue,” she said.
Shafudah explained that the government’s approach focuses on phased deficit reduction, smart spending, and continued protection of social programmes, with the goal of lowering interest costs without stalling economic growth or triggering public discontent.
Following the redemption of Namibia’s Eurobond on 29 October 2025, she said the country’s foreign-to-domestic debt ratio has improved to 85:15. She added that 90% of foreign debt is rand-denominated, resulting in a 99% exchange-rate-free debt portfolio, which shields the budget from volatility in currency markets.
Responding to concerns that government borrowing may be used to fund consumption, Shafudah said domestic revenue remains sufficient to cover operational expenditure. She noted that Namibia’s performance in revenue mobilisation compares favourably to regional peers, reflecting the effectiveness of ongoing fiscal reforms.
“Honourable Speaker, Honourable Members, turning to the low execution rate on capital projects, the Ministry of Finance, together with the National Planning Commission, is working on measures to improve the execution rate of capital projects. In addition, envisaged Public Expenditure Reviews will be critical to support the optimisation and speedy delivery of projects in an effective and efficient manner,” she said.
Turning to sectoral priorities, Shafudah said green-scheme irrigation projects will be restored to full capacity through public-private partnerships to improve food production, create jobs, and stimulate growth.
She added that funding for water infrastructure has been secured in the current budget to ease shortages in affected regions, with implementation to be undertaken by NamWater and the Ministry of Agriculture, Water, Fisheries and Land Reform.
In education, Shafudah said an additional N$663 million allocated during the MYBR will strengthen the Namibia Student Financial Assistance Fund (NSFAF) and support the rollout of free tertiary education.
Further budgetary support will be considered in the 2026/27 National Budget and Medium-Term Expenditure Framework (MTEF).
Providing an update on the Sovereign Wealth Fund, the Minister reported a 16.05% annualised return, driven purely by investment performance since its initial N$267 million seed capital in 2022.
She said the Sovereign Wealth Fund Bill is with legal drafters and will soon be tabled in Parliament.
Shafudah concluded that the Ministry of Finance will present a detailed progress report on economic diversification, revenue performance, and the fiscal policy stance, including the debt matrix, during the tabling of the 2026/27 National Budget.
