CHAMWE KAIRA
The market value of Namibia’s foreign assets rose over in the third quarter ending in September due to an increase observed in portfolio investment, other investment, and reserve assets.
At the end of the third quarter, Namibia’s foreign assets stood at N$288 billion, reflecting a 13,8% increase on an annual basis and a 0,9% increase on a quarterly basis, the Bank of Namibia said in its December quarterly bulletin.
The market value of portfolio investment rose by 18,4% to N$174,8 billion on an annual basis, due to an increase in portfolio investment outflows in the form of equity and debt instruments acquired abroad, the bulletin said.
The market value of Namibia’s foreign liabilities rose on an annual and quarterly basis due to high direct investment inflows. The market value of Namibia’s foreign liabilities rose by 17,2% and 0,7% on an annual and quarterly basis, respectively, to N$284,7 billion.
“Both the annual and quarterly increases in the market value of Namibia’s foreign liabilities were mainly driven by direct investment inflows. Direct investment recorded the most significant increase, rising by 27,7% and 2,8% on a yearly and quarterly basis, respectively. This rise was fuelled by ongoing oil and gas exploration and appraisal activities, supported by foreign loan intakes and reinvestment of earnings in the mining and financial intermediation sectors,” the central bank said.
The bulletin added that at the end of the third quarter, Namibia’s stock of gross external debt increased on a yearly basis, primarily driven by a higher uptake of foreign trade credit and intercompany borrowing.
The stock of external borrowing rose by 1,5% to a level of N$174,3 billion on an annual basis, attributable to increased uptake of foreign trade credit by the private non-banking sector, the bulletin said.
The Bank of Namibia added that increased direct investment intercompany borrowing by mining sector enterprises further fuelled the rise.
Meanwhile, the external debt position declined by 2,1% on a quarterly basis, largely ascribed to a decrease in claims of currency and deposits to non-residents.
“In addition, the central government’s external debt stock declined by 5,4% owing to repayments of some foreign multilateral loans, notably the partial repayment of the IMF Rapid Financing Instrument to the amount of N$585,1 million. The appreciation of the Namibian dollar against major currencies further exerted downward pressure on the gross external debt position.”
