Govt N$14.4 billion debt burden prompts fiscal tightening

Under control
Nikanor Nangolo
  • 4 Hours Ago
Finance minister Ericah Shafudah says measures are being implemented, including phasing in deficit reduction, fostering growth through smart spending choices, and upholding social protections, to stabilise debt and lower interest costs over time without stalling the economy.

According to her, debt servicing or interest payments are consuming a growing share of the budget, amounting to approximately N$14.4 billion for the 2025/26 financial year. “I would like to inform this August House that, with the redemption of the Eurobond on 29 October 2025, the ratio of foreign to domestic debt now stands at 85 to 15,” she said, responding to concerns raised in Parliament last Tuesday regarding the growing debt and interest payments.

“It is also worth mentioning that about 90% of foreign debt is denominated in South African rand, which makes the overall government debt portfolio about 99% exchange-rate-free. Regarding questions on measures to contain debt growth trajectories, I wish to indicate that measures are indeed being implemented. These include phasing in deficit reduction, fostering growth through smart spending choices, and upholding social protections. Thus, we can stabilise debt and lower interest costs over time without stalling the economy,” she said.

On concerns raised about the low execution rate of capital projects, Shafudah said the Ministry of Finance, together with the National Planning Commission and all offices, ministries and agencies, is working on measures to ensure improved execution rates. “In addition, we are considering public expenditure reviews, which are deemed critical to optimising and accelerating project delivery in an effective and efficient manner,” she added.



Capital projects

“On the agriculture sector, there were questions raised. Indeed, we cannot agree more that Namibia has the means to feed itself. Therefore, as the Minister of Agriculture and others often emphasise, the green schemes will be put into production, whether through public investment or a combination of public–private partnerships, to maximise production,” she said.

Regarding water scarcity in parts of the country, the minister highlighted that the government continues to mobilise resources to address the situation. “To this effect, funding has been secured, and the implementation of water projects through NamWater and the Ministry of Agriculture, Water and Land Reform’s Water Business Development Fund has commenced,” she said.

“Regarding the allocation to subsidise basic education, concerns were raised that the additional N$663 million allocated is not sufficient. I wish to inform this August House that this is in addition to what the Ministry of Education, Arts and Culture has already been provided with. The allocation will enable the ministry, together with the portfolios of Innovation, Youth, Sport and Culture, to meet expenses related to subsidised basic education, while further considerations will be made during the 2026/27 financial year, including within its corresponding Medium-Term Expenditure Framework,” she said.

She further informed Parliament that the government has revised the National Youth Fund’s age eligibility criteria to promote greater inclusivity and empowerment, recognising that entrepreneurship evolves from early adulthood into mid-career. “The fund is now open to Namibians aged between 18 and 45 years,” she said.

“With regard to the progress of the Sovereign Wealth Fund Bill, I wish to inform this House that the Bill is currently under legal review. In terms of its performance, I am pleased to inform you that since its inception in 2022, the fund now holds an amount of N$489 billion.” - nikanor@nmh-hub.com.na