No risk of debt default – Treasury
19 February 2021 | Local News
Government has reiterated that it will not default on its debt obligations.
This as it will have to redeem a N$500 million Eurobond before the end of this year.
Treasury spokesperson Tonateni Shidhudhu said there was no indication that government would default on any of its loan obligations when asked what measures it took to protect the country’s fiscal sovereignty in the event of a default.
Bank of Namibia governor Johannes !Gawaxab had last year also expressed confidence in government’s ability to honour the looming obligation.
While the first Eurobond matures this year, Namibia will get some breathing room as the next N$750 million Eurobond will only mature in 2025.
Close to junk status
Ratings agency Moody's last Friday downgraded Namibia's sovereign credit rating from Ba2 to Ba3, maintaining its negative outlook. This places Namibia's debt just above junk status or sub-investment grade.
The international credit ratings agency described government's debt burden as “now markedly higher” and said its debt affordability was weakening.
One of Moody's issues with Namibia is that government's interest bill will rise to 15.5% of revenue in the current fiscal year, up from 5% five years ago.