Namibia has reduced its central government debt as a percentage of gross domestic product (GDP) to 66 percent by the end of March 2024, down from 67.2 percent a year earlier, despite experiencing a slowdown in economic growth, the central bank announced on Friday.
In nominal terms, the government’s debt increased by 8 percent to 153.8 billion Namibian dollars (approximately 8.44 billion U.S. dollars), according to Kazembire Zemburuka, Director of Strategic Communication and International Relations at the Bank of Namibia.
“The rise in debt was driven by increased issuance of Treasury Bills and Internal Registered Stock, as well as higher external debt due to exchange rate depreciation, funding from the KFW Development Bank, and a loan from the African Development Bank,” Zemburuka said.
Namibia’s economy grew by 4.7 percent in the first quarter of 2024, a decrease from the 5.3 percent growth recorded in the same period the previous year. This weaker performance has been attributed to reduced output in the primary and secondary industries, particularly in the diamond and uranium mining sectors.
Annual inflation eased to 5 percent in the first quarter of 2024, down from 5.7 percent in the previous quarter. This decline was mainly due to decreased prices of food and beverages. Inflation is projected to slow further to 4.9 percent in 2024 and 4.5 percent in 2025, compared to an average of 5.9 percent in 2023.
Despite these economic challenges, the reduction in the debt-to-GDP ratio indicates Namibia’s commitment to maintaining fiscal discipline and managing its public finances prudently. The central bank’s statement reflects a cautious optimism about the country’s economic outlook, highlighting ongoing efforts to stabilise the economy and ensure sustainable growth.
