By: Nghiinomenwa-vali Hangala
The Namibian government will borrow N$29.2 billion (10.2% of GDP) for FY2026/27 to cover the budget deficit, additional statutory payments, and government debt obligations.
This is shown by the country’s Borrowing Plan for FY2026/27, which was released this week.
The N$29.2 billion funding requirement comprises a budget deficit of N$15.78 billion and an additional financing requirement arising from debt obligations of N$13.44 billion.
The funds will be sourced domestically and externally, with a split of N$20.2 billion and N$9.0 billion, respectively.
The government tabled an expenditure plan of N$106,03 billion for the 2026/27 financial year, while revenue projections show that it can only collect N$89,6 billion, thus resulting in a budget deficit and the need to borrow.
The Ministry of Finance has explained that borrowing is necessitated by the cash needed.
“It should be noted that the borrowing requirement reflects the cash required for financing,” the plan read.
Adding that the funding strategy will, from this financial year onwards, ensure that the full cash requirement is raised within the fiscal year, and the nominal figures indicated in bond borrowing plans will adjust accordingly to align with the funding needs.
The N$20.2 billion to be sourced locally has been allocated across the various government securities: Treasury Bills (T-Bills), Fixed-rate bonds, and Inflation-linked bonds, throughout the financial year.
The strategy shows that 75% – 90% of the domestic borrowing needs will be raised through fixed-rate bonds.
In the last financial year (FY2025/26), the government had a net domestic borrowing which amounted to N$26.48 billion, excluding loans from commercial banks.
On the external front for this financial year, funding will be pursued through a combination of loan and bond market instruments, allowing for flexibility in execution depending on prevailing market conditions, indicated the plan.
The country’s treasury has explained that this year’s borrowing strategy reflects a measured and opportunistic approach, balancing domestic and external sources while maintaining flexibility to respond to evolving market conditions.
Through this approach, Namibia aims to secure the required financing at optimal cost and risk parameters, while supporting the ongoing development of its domestic capital market and preserving debt sustainability over the medium term, adds the plan.
To align with global best practices and following consultations with regional peers, the borrowing calendar and amounts to be raised will now be shared quarterly.
erastus@thevillager.com.na
