The government expects the country’s public debt to reach 69.6% of GDP in FY22/23, peaking at 71.0% in FY23/24 before declining somewhat to 69.8% in FY24/25.

In its Quarterly Economic Review Report, IPPR said the country’s total debt comprises N$101.5 billion domestic debt and N$34.2 billion foreign debt.

The debt, according to IPPR, is composed of Treasury Bills, which is short-term government debt with maturity of up to a year.

"As such Namibia has four classes of T-Bills: 91-day, 182-day, 273-day and 365-day. Together the outstanding amount of T-Bill debt was N$34.5 billion. Others include Index-Linked Bonds (ILBS) which are bonds that pay a rate of return that is linked to the rate of inflation. At the end of September 2022, Namibia had six outstanding ILBS with maturities from 2022 to 2036 worth N$8.7 billion," the report reveals.

Further debt is that of Internal Registered Stock (IRS), which are bonds that pay a rate of return and at the end of September 2022, Namibia had 15 outstanding IRS with maturities from 2023 to 2050, worth N$58.3 billion.

"The total value of T-Bills and bonds outstanding at the end of September was N$101.5 billion. T-Bills and bonds are used to fund the general operations of government and not tied to particular projects, programmes or initiatives," states IPPR.

Multilateral and bilateral debts, according to the report, contribute N$16.041 billion and N$2.602 billion to the hefty debt, respectively.

“Bilateral debt is debt owed by Namibia to individual countries such as Germany or China rather than to multilateral institutions and is generally for particular projects or programmes that have been agreed between Namibia and the partner country. Bilateral debt is generally owed in the currency of the lending country. Namibia owes almost N$2 billion to China in Chinese Renminbi (or Yuan),” according to IPPR.

In addition to taking out loans, the government also provides guarantees for loans taken out by public organisations, primarily State-Owned Enterprises or Public Enterprises and these guarantees are required as security by lenders.

"In total domestic and foreign loan guarantees are N$2 billion and N$8.1 billion respectively. This amounts to 1% and 4.1% of GDP well below Government’s own target of 10% for all loan guarantees domestically. Foreign loan guarantees account for 80% of all loan guarantees. These numbers differ somewhat from those included in the main budget in February 2022 where total guarantees were expected to total N$12.1 billion or 6.1% of GDP," further states the report. 

IPPR notes that Namibia finds itself in a situation where public debt has reached levels the government never foresaw.

"Leaders should in future be much more cautious about taking on new debts. Just because someone offers you a loan does not mean you should take it.”

As a consequence, and in parallel with rising levels of debt, IPPR notes Namibia’s sovereign credit rating has steadily deteriorated.

“This means Namibia is decreasingly seen as a “safe bet” and makes it harder or more expensive to raise funds internationally.”