Local banks shield Namibia from Eurobond need
The Ministry of Finance mobilised US$306 million, or N$5.2 billion, to enable Namibia to avoid accessing a third Eurobond under what it described as unfavourable market conditions, finance minister Ericah Shafudah said following the successful redemption of a US$750 million, or N$13 billion, Eurobond obligation due this month.
Shafudah made the remarks after the bond redemption and said Namibia had followed a prudent debt management strategy to ensure it could meet its obligations.
“To bridge the remaining gap of US$306 million, we issued a Request for Proposal to local commercial banks. I am pleased to announce that the response was robust and competitive. The following institutions were awarded participation: Standard Bank, N$3 billion; FNB, N$1.5 billion; and Bank Windhoek in partnership with ABSA, N$1.5 billion,” Shafudah said.
“This strategy allowed us to avoid re-entering the Eurobond market under unfavourable global conditions. It preserved our foreign reserves, reduced exchange rate exposure, and reinforced investor confidence in Namibia’s creditworthiness,” she added.
Protection
The strategy further protected Namibia against currency fluctuations, as 85% of Namibia’s debt is now held in South African rands (ZAR).
“As of now, following the redemption of the Eurobond, the overall government debt portfolio is expected to reflect a ratio of 85:15, with domestic debt surpassing foreign debt. It is also important to note that approximately 90% of the foreign debt is denominated in ZAR. This strategic positioning contributes to an overall government debt portfolio that is 99% protected from exchange rate risks,” Shafudah said.
The bond redemption means that the government’s foreign reserves will decline slightly.
“While foreign reserves are projected to fall from N$63 billion at the end of 2024 to N$47 billion by the end of 2025, we anticipate a moderate recovery in 2026, supported by sound fiscal planning and continued economic resilience,” Shafudah said.
The redemption also signals that efforts will continue to rein in Namibia’s debt.
“As we move forward, our focus remains on consolidating fiscal gains, enhancing domestic revenue mobilisation, and investing in sectors that drive inclusive growth. Let this moment serve as a reminder: Namibia keeps its promises. We borrow wisely, we invest strategically, and we repay responsibly.”
Namibia accessed its first Eurobond in 2011, valued at US$500 million, and the second in 2015. Both have been successfully redeemed.
Shafudah made the remarks after the bond redemption and said Namibia had followed a prudent debt management strategy to ensure it could meet its obligations.
“To bridge the remaining gap of US$306 million, we issued a Request for Proposal to local commercial banks. I am pleased to announce that the response was robust and competitive. The following institutions were awarded participation: Standard Bank, N$3 billion; FNB, N$1.5 billion; and Bank Windhoek in partnership with ABSA, N$1.5 billion,” Shafudah said.
“This strategy allowed us to avoid re-entering the Eurobond market under unfavourable global conditions. It preserved our foreign reserves, reduced exchange rate exposure, and reinforced investor confidence in Namibia’s creditworthiness,” she added.
Protection
The strategy further protected Namibia against currency fluctuations, as 85% of Namibia’s debt is now held in South African rands (ZAR).
“As of now, following the redemption of the Eurobond, the overall government debt portfolio is expected to reflect a ratio of 85:15, with domestic debt surpassing foreign debt. It is also important to note that approximately 90% of the foreign debt is denominated in ZAR. This strategic positioning contributes to an overall government debt portfolio that is 99% protected from exchange rate risks,” Shafudah said.
The bond redemption means that the government’s foreign reserves will decline slightly.
“While foreign reserves are projected to fall from N$63 billion at the end of 2024 to N$47 billion by the end of 2025, we anticipate a moderate recovery in 2026, supported by sound fiscal planning and continued economic resilience,” Shafudah said.
The redemption also signals that efforts will continue to rein in Namibia’s debt.
“As we move forward, our focus remains on consolidating fiscal gains, enhancing domestic revenue mobilisation, and investing in sectors that drive inclusive growth. Let this moment serve as a reminder: Namibia keeps its promises. We borrow wisely, we invest strategically, and we repay responsibly.”
Namibia accessed its first Eurobond in 2011, valued at US$500 million, and the second in 2015. Both have been successfully redeemed.
