Eurobond repaid; costs still soar
Finance minister Ericah Shafudah has vowed to rein in Namibia’s rising debt levels and restore the debt ratio to more sustainable levels, saying she would not want to be responsible for placing the country in a “perpetual debt trap” that would be difficult to escape from.
Speaking at a recent budget discussion hosted by FirstRand, Shafudah admitted that Namibia’s current debt metrics were “too high”.
Public debt has surged from about N$33 billion, roughly 25% of Namibia’s gross domestic product (GDP) in 2015, to approximately N$171.5 billion by mid-2025, equivalent to around 62–64% of GDP. The increase has been largely driven by slow economic growth, persistent fiscal deficits, and emergency spending during the Covid-19 pandemic.
“Fifteen percent debt servicing is a concern, and that is why we are saying we want to pursue fiscal consolidation. We cannot deny that debt servicing costs are high, so we need to ensure our spending is prudent in order to stabilise as we move forward,” Shafudah said.
The original debt-servicing cost figure was later revised upwards.
Eurobond redemption
According to Shafudah, the government’s total cumulative public debt reached N$176.3 billion by the end of September 2025.
“This rising debt stock is compounded by a significant increase in debt-servicing costs, with interest payments totalling N$6.8 billion, a substantial 6.4 percentage point increase compared to September 2024,” she said, following the tabling of her mid-term budget last month.
The Ministry of Finance revised total debt-servicing costs (interest and principal) upwards from N$13.7 billion (14.8% of revenue) to N$14.3 billion (16.1% of revenue). This means that over 16 cents of every dollar the government earns must go towards servicing debt.
The sharp increase is directly linked to the planned redemption of a major external debt. Namibia recently repaid a US$750 million Eurobond - the largest single debt repayment in the nation’s history.
A portion of the funds (US$444 million) was accumulated in the sinking fund over several years, while the remaining N$6 billion balance was covered by a syndicated facility with domestic banks, coordinated by the Bank of Namibia. The ministry secured about US$306 million (approximately N$5.7 billion) from a consortium of Namibian lenders, including Standard Bank Namibia (N$3 billion), First National Bank Namibia (N$1.5 billion), and Bank Windhoek, which partnered with ABSA Bank Namibia (N$1.5 billion).
This strategy helped Namibia avoid re-entering the international Eurobond market under unfavourable global conditions, mitigating exchange rate risk and demonstrating the strength of the local financial sector.
“We have said debt servicing is costly, and we intend to implement measures to stabilise the debt going forward, because no one wants to say that, during my tenure, I contributed to what may be termed a debt trap. That would not be good for Namibia or Namibians,” Shafudah said. – Additional reporting by Mail & Guardian
Speaking at a recent budget discussion hosted by FirstRand, Shafudah admitted that Namibia’s current debt metrics were “too high”.
Public debt has surged from about N$33 billion, roughly 25% of Namibia’s gross domestic product (GDP) in 2015, to approximately N$171.5 billion by mid-2025, equivalent to around 62–64% of GDP. The increase has been largely driven by slow economic growth, persistent fiscal deficits, and emergency spending during the Covid-19 pandemic.
“Fifteen percent debt servicing is a concern, and that is why we are saying we want to pursue fiscal consolidation. We cannot deny that debt servicing costs are high, so we need to ensure our spending is prudent in order to stabilise as we move forward,” Shafudah said.
The original debt-servicing cost figure was later revised upwards.
Eurobond redemption
According to Shafudah, the government’s total cumulative public debt reached N$176.3 billion by the end of September 2025.
“This rising debt stock is compounded by a significant increase in debt-servicing costs, with interest payments totalling N$6.8 billion, a substantial 6.4 percentage point increase compared to September 2024,” she said, following the tabling of her mid-term budget last month.
The Ministry of Finance revised total debt-servicing costs (interest and principal) upwards from N$13.7 billion (14.8% of revenue) to N$14.3 billion (16.1% of revenue). This means that over 16 cents of every dollar the government earns must go towards servicing debt.
The sharp increase is directly linked to the planned redemption of a major external debt. Namibia recently repaid a US$750 million Eurobond - the largest single debt repayment in the nation’s history.
A portion of the funds (US$444 million) was accumulated in the sinking fund over several years, while the remaining N$6 billion balance was covered by a syndicated facility with domestic banks, coordinated by the Bank of Namibia. The ministry secured about US$306 million (approximately N$5.7 billion) from a consortium of Namibian lenders, including Standard Bank Namibia (N$3 billion), First National Bank Namibia (N$1.5 billion), and Bank Windhoek, which partnered with ABSA Bank Namibia (N$1.5 billion).
This strategy helped Namibia avoid re-entering the international Eurobond market under unfavourable global conditions, mitigating exchange rate risk and demonstrating the strength of the local financial sector.
“We have said debt servicing is costly, and we intend to implement measures to stabilise the debt going forward, because no one wants to say that, during my tenure, I contributed to what may be termed a debt trap. That would not be good for Namibia or Namibians,” Shafudah said. – Additional reporting by Mail & Guardian
