By: Nghiinomenwa-vali Hangala
The government, through the central bank, will attempt to persuade investors to switch their N$2.3 billion investment in the GC26 Bond to other long-term bonds to avoid repaying the borrowed money next year.
The government announced this auction through a central bank notice released last week.
Market participants or lenders are invited to bid on the nominal amounts of the GC26 they wish to sell for destination stocks and the yield/price at which they want to buy the destination stock.
Allocation will be made in ascending order of switch ratios (GC26 dirty prices divided by GC28, GC30, GC32, GC35, GC37, GC40, GC43, GC45, GC48, and GC50 dirty prices).
According to information shared by the central bank, as of the end of October 2025, the government owes/has borrowed N$2.3 billion from domestic investors through the GC26, which it is meant to repay next year.
To avoid paying back the full amount, the government, through the central bank will hold switch auctions, where investors can switch or move their money to other bonds that are not maturing soon.
This is done at a certain interest rate that the government pitches to investors.
By the end of January 2025, the government owed N$6.3 billion through the GC26, however, through various switch auctions, it managed to switch N$4.1 billion to other bonds.
This means the government has decided to keep the N$4.1 billion instead of paying it back next year, in turn also indicating it avoided turning to the market for new money.
Investors have the option to move their money to the 10 existing bonds: GC28, GC30,
GC32, GC35, GC37, GC40, GC43, GC45, GC48 and the GC50.
This excludes the GC27, which is also set to mature after the GC26.
According to the central bank data, the government has a maturing bond from which it aims to reimburse lenders.
By the end of 2030, the government has to repay N$25,4 billion owed to domestic investors.
Overall, through bonds and treasury bills, the government owes N$143.7 billion to domestic investors.
erastus@thevillager.com.na
