Chamwe Kaira
Namibia’s debt position remains manageable, but pressure on the country’s finances is increasing as borrowing requirements continue to rise, according to financial services firm Simonis Storm.
The firm said Namibia has not lost access to financial markets and still benefits from a strong domestic investor base.
“The domestic investor base remains deep. The eurobond was redeemed. The debt office is actively managing maturities. These are important positives,” Simonis Storm said.
However, the firm warned that the broader fiscal picture remains under pressure.
“It transformed hard currency risk into domestic debt, commercial bank exposure and reserve pressure. The total financing requirement remains above N$29 billion. Interest now absorbs approximately 18% of revenue and is larger than the fiscal deficit. Domestic debt has reached N$154.4 billion. Treasury bills account for almost one third of domestic securities and must be rolled continuously. The GC27 maturity is being managed through switches, but the maturity wall is being shifted, not removed,” the firm said.
Simonis Storm said Namibia is not facing an immediate debt crisis but has become increasingly dependent on the domestic market to absorb government borrowing.
The firm said this should concern investors, taxpayers and policymakers.
It added that the government has bought time through active debt management but warned that the extra time must be used to strengthen the country’s fiscal position.
“That is the risk. It is not dramatic enough to look like a crisis today. But it is exactly the kind of slow fiscal deterioration that becomes expensive to reverse once markets start demanding proof rather than promises,” Simonis Storm said.
For the 2026/27 financial year, the government requires total financing of N$29.22 billion, equal to 10.2% of gross domestic product.
The fiscal deficit alone stands at N$15.78 billion, or 5.5% of GDP. However, including bond redemptions, foreign loan repayments, oil- and gas-related VAT refunds and cash balances significantly increases the total cash requirement.
The total financing requirement equals 32.6% of the projected revenue of N$89.56 billion.
“That is the true funding burden. The deficit number does not capture the full pressure on the state,” the firm said.
Simonis Storm said borrowing has increasingly become the tool used to maintain liquidity in a fiscally constrained environment.
For the 2025/26 financial year, the original borrowing strategy projected a fiscal deficit of N$12.81 billion, equal to 4.6% of GDP.
“However, once the cash requirement, domestic bond redemptions, foreign loan principal repayments, the remaining Eurobond balance and sinking fund transfers were included, the net borrowing requirement rose to N$29.83 billion. That means the cash the state needed to raise was 2.3 times the headline deficit,” the firm said.
Revenue is projected to decline from N$92.63 billion in the 2025/26 financial year to N$89.56 billion in 2026/27, a drop of about 3.3%.
At the same time, expenditure is expected to remain above N$106 billion.
“This is the fiscal squeeze. Spending does not need to accelerate aggressively for the deficit to widen. If revenue softens while the expenditure base remains fixed, the borrowing requirement automatically rises,” Simonis Storm said.
