Cirrus Capital analyst Pandu Shaduka has warned that Namibia’s financing requirements for the 2026/27 financial year remain substantial, with risks concentrated in short-term debt allocations.
Shaduka raised the concerns during a National Budget in Focus session hosted by Deloitte Namibia and Cirrus Capital in Windhoek.
He said the government’s financing needs for the year are significant, with upcoming debt redemptions and plans to issue longer-dated bonds placing pressure on the fiscal framework. Last year’s debt allocations were heavily front-loaded, which he said placed pressure on market pricing and increased fiscal vulnerability.
“This year’s financing requirement is quite large. In the budget documents, it is around N$17 billion to N$18 billion. Redemptions this fiscal year, including the GC26 and GC27, amount to about N$9 billion,” Shaduka said.
“Last year much of the pressure came across the front end of the curve, which increased fiscal and macroeconomic risk.”
He noted that such an approach effectively pushes the problem into future periods rather than resolving it, while heavy reliance on short-term instruments does little to reduce rollover risk.
Shaduka said efforts to curb deficits and improve fiscal metrics have delivered only marginal improvements. While lower bond yields and tighter deficits offer some relief, weak economic growth continues to weigh on government revenues.
“Lower yields help only marginally, and tighter deficits provide limited relief. Slower GDP growth immediately reduces revenue, so overall improvements remain small,” he said.
He suggested that extending the maturity profile of government debt could provide greater fiscal flexibility, even if it results in higher short-term borrowing costs.
“Extending the debt maturity profile may incur short-term costs, but it creates more room to manage fiscal obligations and achieve the administration’s objectives,” Shaduka said.
He also raised concerns about government’s cash position, noting that a large share of revenue continues to be directed towards debt redemptions, leaving limited fiscal buffers.
“Last year a significant portion of revenue went towards redemptions. Eurobond repayments and contributions to the sinking fund absorbed much of the incoming revenue,” he said.
“This year is similar: bonds, treasury bills and other short-dated instruments take priority, leaving little room for fiscal buffers. Financing government domestically also consumes market liquidity and creates competition for capital.”
Shaduka further warned that Namibia remains heavily reliant on mining revenues to sustain economic growth and government income.
He said the sector is currently in transition, with new gold mines still ramping up production, while the diamond industry and manufacturing sector face ongoing pressures.
“We have passed a threshold where reliance on mining revenue remains significant. Gold mines are coming online but are not yet contributing meaningfully. Diamonds and broad-based manufacturing are under pressure, and consumers are constrained, limiting tax revenue,” he said.
“Mining remains the key contributor to GDP and government revenue. Efforts to broaden revenue sources are under way, but tangible results remain limited.”
Shaduka said Namibia will need to extend debt maturities and diversify revenue sources over time to reduce its exposure to volatile commodity cycles and improve fiscal resilience.
