Namibia: Central Bank Warns Against Rising Public Debt

Namibia's public debt could rise to 70% of gross domestic product (GDP) by the end of the current financial year if the government fails to implement spending reforms.

Bank of Namibia (BoN) governor Ebson Uanguta yesterday issued this warning during the 2026/27 budget reform roll-out workshop in Windhoek.

He said the country's debt has already exceeded the 60% benchmark and currently stands at 65.2% of GDP.

"If we do not slow down our debt by the end of the year, it is likely to move up to about 70%," he said.

Uanguta said the government can no longer rely on borrowing to fund expenditure.

"When we are getting that message, we need to wake up and say there is something we need to do," he said.

The warning comes two weeks after Fitch Ratings projected Namibia's government debt would rise to 66% of GDP during the 2026 financial year.

Fitch expects interest payments to consume 18% of government revenue.

The central bank says Namibia's economy grew by only 1.7% in 2025, below its estimated potential growth rate of around 3%.

Uanguta cautioned the government against borrowing against future oil revenues.

"Even if oil is announced today, let us not borrow in the name of oil," he said.

Prime minister Elijah Ngurare called for stricter spending controls across the government.

Namibia's public debt currently stands at N$174.6 billion, representing 65.2% of the country's GDP. He said the government remains committed to reducing the fiscal deficit from 5.5% of GDP this financial year to 3.3% by 2028/29. According to Ngurare, the government will need to save about N$2.3 billion annually during the current medium-term expenditure framework period through tighter spending controls and expenditure restraint.

He said global developments, including the conflict in the Middle East, are putting Namibia's finances under additional pressure.

Ngurare stressed that reducing expenditure alone would not solve the problem.

He said the government must also invest in projects that create jobs, improve service delivery, and encourage private sector investment.

Ngurare then announced the introduction of outcome-based budgeting at eight ministries from the second quarter of this year.

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The pilot programme will cover the ministries responsible for education, health, home affairs, agriculture, finance, industrialisation, environment, and works and t