STAFF WRITER
Namibia concluded the year 2025 with a high current account deficit because of decreasing earnings from the Southern African Customs Union receipts and an increasing import bill.
This created pressure on foreign reserves which declined in the third quarter of 2025, due to net Rand outflows by commercial banks. Namibia normally maintains a safe buffer for foreign reserves with ability to cover three months and more on import cover.
According to the economic outlook released by the bank of Namibia in December Namibia continued to import more than it is producing- a move that widened the current account deficit to 8.8 percent of quarterly Gross Domestic Product (GDP) in the third quarter of 2025.
In comparison the country closed the year 2024 with a current account deficit of 7.8% .
A statement released by the apex bank’s Director of Strategic Communications and International Relations Kazembire Zamburuka the widening of the deficit was primarily driven by lower SACU receipts, while the quarterly expansion reflected a larger merchandise trade deficit, as growth in imports outweighed growth in exports.
“ These net South African Rand outflows were driven by significant portfolio and other investment outflows as well as higher import payments, coupled with increased foreign payments by the general Government and customer foreign currencies (CFC) withdrawals,” Zemburuka said.
He added that, “Despite the decline in reserves, it remained adequate and sufficient to meet the country’s external obligations, with the import cover of 3.6 months. Lastly, the Real Effective Exchange Rate (REER) appreciated by 1.4 percent year-on-year, suggesting a relative loss of trade competitiveness for Namibian products in international markets.”
Namibia also saw its debt stock rise over the twelve months to the end of September 2025, while loan guarantees declined over the same period.
“In nominal terms, the total Government debt stock reached N$176.1 billion at the end of September 2025, representing an annual growth rate of 10.0 percent, primarily driven by increased issuance of Treasury Bills (TBs) and Internal Registered Stock (IRS). In contrast, the central government’s external debt registered a modest decline over the same period, partly on account of the principal repayment of the IMF’s Rapid Financing Instrument (RFI) and the appreciation of the Namibia dollar against major currencies,” Zemburuka said.
Government debt stock stood at 67.2 percent at the end of September 2025, with expectations to rise to 67.3 percent of GDP by the end of the Medium Term Expenditure Framework period.
“The total debt stock subsequently dipped in October 2025 when the US$750 million Eurobond was repaid. Contrastingly, total central government loan guarantees as a percentage of GDP declined by 1.0 percentage point year-on-year to 3.0 percent in the quarter under review, well below the Government’s set ceiling of 10.0 percent of GDP, indicating low contingency liability risk,” he said.
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