By: Nghiinomenwa-vali Hangala
For every N$100 the state collects, around N$16 is spent on interest payments before a single teacher, clinic or road is paid for according to analysis done by Monasa Advisory and Associate.
The firm poked holes in the country’s continuous budget deficit and the increased borrowing as a strategy to meet budget shortfalls.
In their Monasa Monitor Publication, the research institution has indicated that even though the country’s debts are largely from local lenders, the interest burdens don’t change.
Monasa has cautioned that interest payments are rising faster than the revenue collected, as the state continues to borrow and switch bonds.
Reminding that “interest is the first claim on revenue, and it is growing faster than revenue is.” Moreover, national priorities are now also competing with interest payments for resource allocation.
Namibia’s interest payments are estimated to take up 16% of the state’s revenue collection from economic agents and other sources this financial year (2026/27), increasing from 14% of last year.
The government is currently paying interest on N$172.7 billion, of which N$160.9 billion is domestic debt as of the end of July 2026.
Since 2025, the government has been spending more than N$4 billion on interest payments to local and foreign investors.
Majority of these payments go to local investors, receiving around N$2 billion to N$3 billion every quarter.
The only time the foreign investors received more was during the third quarter of 2025/26, when foreign investors were paid N$14.6 billion while local investors were only paid N$2.6 billion.
The government is going to continue borrowing as the budget deficit continues to expand.
Domestic borrowing for the year amounted to N$26.48 billion, while for the current financial year (FY2026/27), the total financing requirement is estimated at N$29.22 billion, comprising a budget deficit of N$15.78 billion and additional financing requirement arising from debt obligations of N$13.44 billion.
The 2026/27 Fiscal Strategy of the government plans to borrow most of this money from local investors, positioning them to receive most of the interest payment.
As of the end of July 2026, the government still needed to borrow N$17.7 billion.
According to Monasa, the government loan book turned domestic in part because Namibia redeemed its US$750 million Eurobond in full.
Around 88% of the debt is domestic, held by Namibian banks, pension funds and insurers.
Monasa added that “borrowing at home builds our capital market, and it also concentrates the risk in one place”.
erastus@thevillager.com.na
