There is a line regulators should not cross. When trust in an institution depends on independence and consistency, turning on the entities one oversees is more than poor judgement; it is institutional betrayal.
That is precisely what the Bank of Namibia (BoN) has done in its latest monetary policy statement.
After keeping the repo rate unchanged at 6.75 percent, BoN used the final section of its announcement to target commercial banks. Not with data. Not with regulation. With spin.
Namibia, the statement noted, remains the only country in the Common Monetary Area where the prime lending rate sits 3.75 percentage points above the repo rate, instead of the 3.5 percent norm.
BoN then “urged” local banks to fall in line, suggesting they were out of step and, by implication, holding consumers hostage to inflated borrowing costs.
This was not policy. It was a media manoeuvre.
BoN regulates these institutions. It has access to their records, understands their risk models, and signs off on their compliance.
If BoN has a problem with interest margins, it has the tools to deal with it directly, discreetly and properly.
And the story it told was not even accurate.
A Margin That Has Long Existed
The 25 basis point gap is not new. It has existed for years, through multiple repo adjustments, shifting lending cycles and the absence of serious economic reform.
If BoN believed it distorted policy transmission, it had time to act.
Borrowing costs remain high. Inflation is easing, but relief has been slow to reach households.
Rather than confront structural issues—slow courts, weak collateral enforcement, high default risk—BoN chose to shift blame onto the sector it regulates.
Banks operate within the rules BoN sets. They do not invent risk; they respond to it. When that risk includes legal delays, recovery bottlenecks and volatility, margins reflect those realities.
To ignore that context and present margins as unjustified is misleading.
Short-Term Optics, Long-Term Damage
Every headline BoN grabs at the sector’s expense chips away at trust. The consequences go beyond local opinion.
Investors are watching. So are ratings agencies. A regulator that throws its own sector under the bus to ease public pressure does not project strength. It projects fragility.
There is still time to step back. BoN could launch a proper review of retail pricing. It could work with the sector on legal reform and credit constraints.
But it should stop framing banks as the culprit for failures rooted in policy drift and system design.
BoN cannot supervise in private and shame in public.
And the cost is long-term institutional trust.
*Briefly is a weekly column that’s opinionated and analytical. It sifts through the noise to make sense of the numbers, trends and headlines shaping business and the economy — with insight, wit and just enough scepticism to keep things interesting. The views expressed are not our own; we simply relay them as part of the conversation.
