By: Nghiinomenwa-vali Hangala
As of last week, the government has borrowed N$145 billion from domestic investors, reflecting an increase of 0.9 percent from the previous month, according to the Bank of Namibia, which borrows on behalf of the Ministry of Finance.
From last year, total domestic debt securities increased by 15.7 percent, owing to an increase in the issuance of both Internal Registered Securities (Bonds) and Treasury Bills (TBs), which rose by 18.3 percent and 10.5 percent, respectively.
This is according to an update shared by the central bank last week.
Total domestic debt securities as a percentage of GDP increased by 0.5 percentage points month-on-month, to 52.0 percent as of last week.
Of the N$145 billion domestic debt securities, the government borrowed N$98.8 billion through the Internally Registered Stock (IRS), and N$46.2 billion was borrowed through TBs.
The government has borrowed from domestic investors through 18 bonds, with various maturing years, with only the GC26 being deactivated due to its expiry next year.
The longest bond is the GC50, which means that the government borrows with a promise to return the money in 2026, whilst paying interest to investors twice a year until maturity.
Most of the money was borrowed through two bonds, the GC32 (N$10.3 billion) and the GC34 (N$10.4 billion). However, in all the bonds issued, the government borrowed more than N$5 billion, except for the inflation-linked bonds and the GC26, which have been off the market.
The bonds are also listed on the Namibia Securities Exchange (NSX) for interested investors. In terms of treasury, which are short-term instruments (less than a year) – which are mostly used for liquidity and to raise money faster – the government uses 4 notes, namely TB-91, TB-182, TB-273, and TB-365.
The main investors in these TBs are commercial banks, since the notes are part of the liquidity assets that banks are required to keep to maintain their liquidity level.
The government borrows to fill the budget deficit, which is caused by various factors such as increased expenditures rising mostly from infrastructure development.
Moreover, what mayn also cause said deficit is the inability to raise enough revenue through taxes and other sources for various reasons, such as a small tax base and weak economic performance.
As for Namibia, it has not been pinpointed why the government keeps running on a budget deficit, however, increased expenditure through the operational budget has been noted.
As for this financial year, FY2025/26, the borrowing requirement has increased to N$33.6 billion. As a result, the government will borrow until it reaches this amount before 31 March 2026 when the financial year closes.
For this week, the government plans to borrow N$820 million through bonds, with the auction scheduled for the 4th December, according to the Bank of Namibia’s invitation.
Additionally, it plans to raise N$1.5 billion on the same day from TBs.
erastus@thevillager.com.na
