… as interest costs rise to N$15.4bn
Namibia’s public debt is projected to reach N$201.7 billion during the 2026/27 financial year, equivalent to 68.7% of gross domestic product (GDP), as rising interest payments place additional pressure on government finances.
Finance Minister Ericah Shafudah disclosed the revised debt projections during the Mid-Year Budget Review in the National Assembly on Thursday, revealing that government interest payments are expected to reach N$15.4 billion, consuming 17.5% of total revenue.
“Total public debt is projected at N$201.7 billion, equivalent to 68.7 percent of GDP, while Government guarantees are estimated at N$11.8 billion, or 4.0 percent of GDP,” Shafudah said.
The projected debt level remains above the Southern African Development Community (SADC) convergence benchmark of 60% of GDP, highlighting the continued pressure on Namibia’s public finances.
The revised figures mean that approximately N$17.50 of every N$100 collected in government revenue will be spent on interest payments alone, before any repayment of the principal debt.
The projected interest burden represents an increase from the 16.2% of revenue recorded in the 2025/26 financial year, when the ratio had already risen from 14.7% in 2024/25.
According to the Mid-Year Budget Review, the government expects to record a budget deficit of N$16.3 billion, equivalent to 5.5% of GDP, during the current financial year.
“The budget deficit is estimated at N$16.3 billion, or 5.5 percent of GDP, while the primary deficit is projected at 0.3 percent of GDP,” Shafudah said.
The primary deficit, which excludes interest payments, indicates that debt-servicing costs account for most of the overall fiscal deficit.
The government has also revised its revenue projections downwards by N$1.5 billion, from N$89.6 billion to N$88.1 billion, mainly due to weaker mining receipts, reduced fuel levy collections and lower administrative fees.
The downward revision comes as economic growth for 2026 has been reduced to 2.3%, compared with the 3.1% projected in the main budget.
The combination of weaker revenue collections, slower economic growth and rising interest payments is expected to constrain the government’s ability to reduce its debt burden.
Government guarantees are projected at N$11.8 billion, equivalent to 4% of GDP. These represent contingent liabilities that could create additional fiscal obligations if guaranteed entities fail to meet their commitments.
In the previous financial year, Namibia’s debt-to-GDP ratio declined from 67.3% to 65.4%, despite the budget deficit widening from 4.1% to 5.9% of GDP.
However, the latest projections indicate that the debt ratio is expected to rise again to 68.7% by the end of 2026/27.
Shafudah said the government would continue pursuing fiscal consolidation over the 2027/28 to 2029/30 Medium-Term Expenditure Framework, with the objective of reducing borrowing costs, stabilising public debt and gradually bringing the debt-to-GDP ratio towards the SADC benchmark of 60%.
“The Medium-Term Expenditure Framework (MTEF) for 2027/28 to 2029/30 will remain firmly anchored on fiscal consolidation, with a focus on sustaining a positive primary balance and progressively reducing the budget deficit,” she said.
“These efforts are essential to reduce the cost of borrowing and stabilise public debt and place the debt-to-GDP ratio on a gradual downward trajectory towards the SADC convergence benchmark of 60 percent of GDP.”
The government also plans to develop a Medium-Term Revenue Strategy and a Debt Management Strategy, both of which are expected to be completed before February 2027.
“As announced in the main Budget Statement in February 2026, Government is developing the Medium-Term Revenue Strategy and Debt Management Strategy; both will be completed before February 2027,” Shafudah said.
The revised debt outlook underscores the challenge facing the government as it seeks to finance development priorities while containing borrowing costs and maintaining fiscal sustainability.
