Lazarus Kwedhi
Prime Minister Elijah Ngurare’s recent call for “humanity over profit” in housing loan repayments has struck a nerve. Many Namibians are struggling with repossessions, arrears, and the fear of losing homes they have spent decades paying for.
The Prime Minister deserves credit for raising the issue and forcing it back onto the national agenda. But good intentions or political speeches do not guarantee good policy, in this case, if the diagnosis is wrong, which means the cure will not work.
The Prime Minister’s central complaint is that banks offer 20-year home loans while cars are financed over five years. The implication is that banks are cruel, profit-driven, and insensitive to the humanity of borrowers. The comparison sounds powerful politically, but economics tells a different incontestable fact.
First, the math. A mortgage of N$830,000 at 9.5% interest paid over 5 years would require monthly installments of N$17,450. The same loan over 20 years costs N$7,756 per month.
Banks do not set 20 year terms to punish Namibians. They do it because that is the only term that makes monthly payments affordable for teachers, nurses, police officers, and other ordinary workers. Eliminate the 20-year loan and you do not force banks to be more humane. You eliminate home ownership for everyone except the wealthy.
Second, the business logic. Cars depreciate. A new car loses 20-30% of its value the moment it leaves the showroom and continues to fall each year.
Banks therefore keep terms short, around five years, to match the loan period to the asset’s useful life and resale value. If a borrower defaults in year four, the bank can sell the car and recover most of the outstanding debt.
Housing appreciates. Land and buildings tend to increase in value over time, especially in urban areas. A 20-year loan matches the economic life of the asset.
If a borrower defaults in year 10, the property is likely worth more than the outstanding balance, protecting both the bank and the homeowner’s equity.
That is why mortgages globally run 15 to 30 years, while car loans do not. Therefore, conflicting the two reveals either economic illiteracy or deliberate political theatre. Neither serves Namibians who need real solutions.
The real crisis in Namibian housing is not loan duration, but the market forces such as supply and demand, cost, and adequacy.
At this junction, government policy has failed the housing market on those measures. One can easily buy a car ranging from N$100,000 to N$600,000 because manufacturers produce them at scale and dealers compete on price.
However, such mathematics can not equally apply to the formal housing market in Namibia. There is no two-bedroom house in Windhoek for N$600,000. Even the National Housing Enterprise, with up to 75% government subsidy, cannot deliver adequate housing that people can afford to repay.
NHE itself has described its default rates as “worryingly low”, not because people are not trying to pay, but because instalments remain out of reach.
If the state’s own housing arm, backed by subsidies and mandated to serve the public, cannot make units affordable, then blaming commercial banks for 20-year loan terms is dishonest, scapegoating to protect political careers.
The problem gets worse when we look at what government does build directly. Build Together and Shack Dwellers Federation units often have one bedroom and a toilet. In some cases they build a toilet.
That does not accommodate a family of four parents, a son, and a daughter. It does not provide privacy, dignity, or space for children to study or play. The government itself is perpetrating building “affordable” houses that fail the basic test of human decency which is far better than what the bank offers home loan repayment for 20 years.
It is not a market failure, but it is a government failure.
Commercial banks finance both developers and homebuyers because the government has outsourced or “deserted” its primary responsibility to provide affordable, accessible and sustainable housing for Namibians.
The state’s job in housing is not to become a bank, but to service land, release title deeds, provide bulk infrastructure, and enable construction at a scale that brings down housing prices.
Banks worry about risk and return when having determined the housing price. They do not build roads, water pipes, or electricity networks.
Only the government can do that, if not, it comes at a cost that bears implications on housing prices. For too long, the government has leaned on banks and private developers to do the heavy lifting, then blamed them when prices are high. That is not policy. It is abdication.
Ngurare’s speech on “humanity over profit” would carry more weight if his own government had not presided over Mass Housing units that remain unaffordable, over NHE defaults that remain high, and over Build Together units that cannot house a family.
The amended Courts Act, which introduces reserve prices and requires court approval for repossession, is a step in the right direction.
It protects equity built up over years of payment. But it does not solve the deeper problem such as inadequate and affordable houses to meet demand. If we are serious about humanity in housing, the agenda must be honest and practical ,not political manipulation of public minds.
Firstly, the government must go back to its primary role to service, release land and build public houses. Land prices and housing in urban areas are high as serviced plots are scarce because of the bureaucratic land delivery and housing.
Every month of delay in land servicing adds cost to the final house. Bulk infrastructure investment is not glamorous, but it is the single most effective way to lower the entry price for home ownership.
Secondly, the government must enable construction of adequate units for families. A house for a family of four cannot be one bedroom.
Building codes, approval processes, and state-funded projects must prioritize three and four-bedroom as well as space designs that allow children to grow with dignity. Affordability cannot mean shrinking a family into one room or shacks.
Thirdly, we must protect homeowner equity in repossession. The new Courts Act moves us in this direction by requiring reserve prices and judicial oversight. But we should go further.
After 10 or 15 years of repayment, a homeowner should not lose all equity because of a temporary income shock. Mechanisms such as deferred sale, rent-to-own conversion, or state buy-back can preserve savings and prevent families from falling back into the housing queue.
None of this is easy. It costs money, it takes time, and it requires coordination across ministries and local authorities. But it is the only path that addresses the root cause of the crisis.
Attacking 20-year loans makes for good politics. It gives the impression of action without the hard work of delivery. Fixing housing supply and adequacy is harder.
It requires budget allocations, land release, cutting the middleman out and accountability for implementation. But it is the only solution that will give Namibians real homes, not political speeches year in and out.
Namibians do not need politicians pretending that banks are the enemy. They need leaders who understand basic economics and will do the hard work of building.
We do not need more commissions of inquiry into bank interest rates. We need more serviced plots, more building materials released at cost, more approvals for adequate family housing, and more protection for the equity people build over decades.
The housing crisis will not be solved by shouting at the market. It will be solved by a government doing its job. That is the leadership Namibia needs.
