By: Nghiinomenwa-vali Hangala
Come 15 January 2027, the government will not pay back N$2.6 billion it borrowed from investors through the GC27.
This is because some of the investors who have lent government money through the GC27 have decided to switch their investment to other long-dated bonds during the four switch auctions that were conducted this year.
According to the data shared by the central bank on the GC27 switch auctions, investors had so far switched N$2.6 billion to other bonds.
The four auctions in 2026 have reduced the outstanding amount borrowed through the GC27 from N$7.7 billion to N$5.1 billion after the last auction last week.
With a continuous platform to switch investments to other long-dated bonds, this gradually reduced the amount to be redeemed by the government, shifting the repayment to the future.
Thus, enabling government not to pay out a large sum of money at once, which can drain liquidity. At the same time, enabling investors with long-term interest to move their capital to long-dated bonds.
On the negative side, the switch also increases the government’s debt further instead of reducing it, shifting the debt to future burdens on future governments and generations.
During the first switch auction of the GC27, the investors switched N$527.9 million, and N$563.1 million during the second auction.
As for the last two switch auctions, the appetite has improved, as N$698.1 million was switched during the third GC27 switch auction.
As for the latest auction, which was held last week (17 June 2026), investors submitted around 100 bids looking to switch N$1.2 billion from the GC27.
The auction results, however, show that only N$828.2 million was switched to other bonds.
The auction switch results also show that investors are not interested in many long-dated bonds, as most of the money switched was shifted to the GC29 (N$317.2 million) followed by the GC34 (N$190.7 million).
Less than N$100 million was switched to the rest of the bonds (GC37, GC40, GC43, GC45, GC48, GC50 and the GC53) that were on offer.
According to the Borrowing Plan, the GC27 bond matures on 15 January 2027, and the government will pay back the outstanding amount (N$5.1 billion) to investors.
That said, the government has 6 months to convince investors to switch their investment or pay the full outstanding amount.
erastus@thevillager.com.na
