EDITORIAL: A welcome shift in public debt

One of the clearest contrasts between the administration of President Netumbo Nandi-Ndaitwah and that of late Hage Geingob has been their approach to public debt.

Where the Geingob administration became increasingly reliant on borrowing, the current government appears intent on reducing the country's debt burden while resisting the temptation to accumulate new liabilities.

When Geingob assumed office in 2015, Namibia's public debt stood at approximately 34% of gross domestic product (GDP). By the end of his time in office, that figure had risen to around 68% of GDP, effectively doubling over the course of a decade.

To be fair, Geingob governed through exceptionally difficult circumstances. His administration grappled with prolonged drought, economic recession and the unprecedented shock of the Covid-19 pandemic. 

But even so, the pace at which debt accumulated was alarming. Borrowing became an increasingly familiar response to fiscal challenges, leaving future generations with a heavy repayment burden.

The current administration has signalled a different direction. In October last year, Namibia settled its US$750 million Eurobond – about N$14.3 billion – the largest single debt repayment in the country's history. Earlier this year, government also fully repaid the approximately N$3.9 billion IMF Rapid Financing Instrument loan secured during the pandemic.

Lessons on irresponsible debt management are evident in the national budget itself. For the 2026/27 financial year, government has budgeted N$14.3 billion solely for interest payments on public debt. By comparison, only N$6.5 billion has been allocated to capital expenditure under the development budget.

Against that backdrop, the latest figures showing a 2% year-on-year decline in public debt are welcome.

The reduction may be modest, but it marks an important change in direction. The challenge now is to maintain that discipline without sacrificing economic growth or essential public services.