STAFF REPORTER
POPULAR Democratic Movement (PDM) law maker Inna Hengari says civil servants in Namibia are trapped in an ever evolving debt web.
She said their situation has reached crisis proportions.
Hengari called for urgent action to addres what she called ‘predatory lending’ by the country’s banking financial services sector.
According to Hengari such tendencies are trapping the entire civil service with debt monthly.
Hengari raised a motion in parliament on Wednesday calling for the reforming of the Namibian financial architecture to save thousands of low earning civil servants which she said are stuck in a cobweb of prereni borrowing because of low income.
“ Nearly half of our people, especially civil servants, are burdened with unsustainable debt levels. This is not merely a statistical concer, it is a humanitarian one. These are teachers who dedicate their lives to nurturing the minds of our children, only to see
60% of their salaries garnished before payday arrives,” she told parliament. She added that, “These are nurses who save lives
by day and plead with loan sharks at night. These are parents who borrow not to invest but to eat; who do not seek credit for mobility but for survival. What we are witnessing is not a natural outcome of economic activity but the byproduct of a financial system structurally tilted against the vulnerable.”
She said the crisis is intensified by the policy and structural constraints imposed by fixed exchange rate regime.
“The peg to the South African Rand has long been viewed as a stabilising mechanism, shielding our economy from currency volatility. But this
stability comes at a cost, a cost measured in the narrowing of our monetary policy space and the externalization of economic control,” she said.
She argued that the maintenance of a lower repo rate
relative to South Africa is intended to support domestic activity but lending rates in Namibia remain staggeringly high, with prime lending rates ranging
between 10% and 40%. “ This disjuncture reveals a flaw in the transmission of monetary policy and suggests that stability is not trickling down to those who need it most. This
is not merely a monetary policy dilemma-it is a question of sovereignty. We must engage in a Parliamentary inquiry into how Namibia can maximise strategic autonomy within this arrangement,” she said.
LASTING SOLUTION
Hengari proposed a multi-dimensional response that does not merely apply band-aids but reimagines the system itself.
“First, we must amend the Banking Institutions Act to cap interest rates within reasonable and humane thresholds. The Draft Regulations on fees and charges already finalised and consulted upon—must be enforced with real consequence,” she said.
She said the proposed reforms are moral imperatives. “No family should pay back double what they borrowed just to keep their lights on. Second, the Bank of Namibia must expand its regulatory jurisdiction to include informal lenders, digital loan apps, and microfinance operators. Regulation without reach is rhetoric. Enforcement without equity is oppression.
Third, I propose that we establish a Debt Relief Programme targeted specifically at civil servants and low-income households,” she said.
COMMENTS