Retail bonds face delay

The Bank of Namibia (BoN) plans to launch retail bonds in the first half of 2027, a year later than originally planned, as it works to build the capacity and systems needed to introduce the investment product.

BoN deputy governor Nicholas Mukasa said the central bank was finalising the resources and technology required to roll out the product.

"What we did was that we had to go back and reconstitute how this interim board was going to evolve out to the market. One of the things that we wanted to do was to make sure that we have sufficient manpower that's going to help us to roll out this project," Mukasa said.

"At this stage as we speak, we are busy finalising and onboarding the resources which will support us to launch the project," he added.

Mukasa said the central bank's focus this year was on building capacity, redesigning the offering and selecting suitable technology.

"In terms of timelines when we can expect this product, we were looking at the first half of 2027... so in the first half of 2027, this is the target that we set ourselves as the BoN," he said.

The central bank had previously targeted a 2026 launch.

BoN governor Ebson Uanguta has previously said the development of the required system and the need for external expertise had contributed to the delay.

Benefit for ordinary Namibians

Retail bonds would give individual investors greater access to government debt, including those who cannot meet the minimum investment amounts currently required for some government securities.

Treasury bills currently require a minimum investment of N$10,000, while fixed-income government bonds require at least N$50,000.

The planned retail product is therefore intended to broaden access to government securities by lowering the barrier for smaller investors.

The BoN has stated that its planned Retail Bonds Project continues to be a vital part of the BoN's strategy, and its implementation is crucial for achieving financial inclusion and savings objectives.

"Importantly, the BoN will adopt a structured approach to ensure that the Retail Bonds are properly aligned with the public Namibian market while remaining affordable and leveraging the latest technologies to promote financial inclusion," the central bank previously said in responses to Market Watch.

South Africa's model

South Africa has operated its RSA Retail Savings Bond programme since 2004, providing individuals with direct access to government-backed savings bonds.

The minimum investment is R1,000, with fixed-rate bonds available over two, three and five years and inflation-linked bonds over three, five and 10 years. The products carry no commission, agency or service fees and are backed by the South African government.

South Africa's programme is one of the more established retail government bond schemes in the region.

Namibia's proposed product would provide a similar avenue for individuals to invest directly in government debt, although the final terms, minimum investment and available products have yet to be announced by the BoN.