Central government loan guarantees have declined by more than N$2 billion over the past five years, signalling a sustained reduction in government exposure to contingent liabilities, according to data from the Bank of Namibia (BoN).
BoN figures show that the total stock of loan guarantees peaked in the early part of the period under review before following a steady downward trend through to the 2024/25 financial year.
In 2020/21, central government loan guarantees stood at approximately N$11.4 billion, reflecting heightened support for state-owned enterprises and strategic projects during a period of economic strain.
Guarantees rose slightly in 2021/22 to around N$11.9 billion before the trend reversed.
By 2022/23, total guarantees had declined to about N$10.4 billion, marking the first significant contraction in the stock of guarantees during the five-year period.
The decline continued in 2023/24, with total guarantees falling further to approximately N$9.1 billion.
According to the latest BoN data, central government loan guarantees declined again in 2024/25 to just under N$9 billion, confirming a cumulative reduction of more than N$2 billion since 2020/21.
The composition of guarantees also shifted over the period. BoN data show that foreign loan guarantees consistently accounted for the larger share of total guarantees, while domestic guarantees declined steadily, both in nominal terms and as a proportion of gross domestic product (GDP).
As a share of GDP, total loan guarantees trended lower throughout the period, reflecting both the decline in guarantee values and growth in nominal GDP.
BoN figures indicate that guarantees fell from above 6% of GDP in the early years of the period to around 3% or lower by 2024/25.
