Staff Writer
Simonis Storm says private sector credit extension (PSCE) growth of 4.3% in March appears stable but hides different trends within the credit market.
The firm said the headline number combines household and business credit flows but gives a misleading view of a uniform slowdown. The data shows a split between corporate and household borrowing.
On the corporate side, the slowdown in March was driven by a sharp change in overdraft credit. Growth moved from 5.4% in February to a contraction of 2.6% in March.
The firm said this is mostly seasonal and linked to year-end balance sheet adjustments in Namibia.
Business instalment and leasing credit grew by 28.6%, showing that investment activity remained steady. Growth in other loans and advances slowed to 3.3%, which the firm said needs close monitoring for signs of broader weakness.
Household credit showed improvement. Mortgage lending rose from 0.3% in January to 0.4% in February and reached 1.9% in March. Analysts said this points to early signs of monetary policy feeding into long-term borrowing.
The firm said the improvement is important because mortgage lending supports household balance sheets and long-term spending. It expects growth to continue, but at a slower pace, as interest rates may remain unchanged through 2026.
The report also raised concerns about Namibia’s external position.
Net foreign assets fell to -17.6% in March, showing that credit growth is being supported more by foreign asset drawdowns than by local deposits. The firm said this trend cannot continue for a long time.
External risks are also rising. Tensions in the Middle East are pushing global inflation higher, while the Namibian dollar weakened by 7.5% against the US dollar during the month. These factors are expected to increase imported inflation.
Looking ahead, Simonis Storm expects PSCE growth to recover to between 5.0% and 5.5% by mid-2026 if business overdraft credit improves and household lending remains strong.
The firm said continued weakness in overdraft lending could pull full-year PSCE growth down to around 4.0%, while a recovery would support the current forecast.
