Namibia should pay 20% of public deficit in 2015, with borrowing on the JSE

Namibian Minister of Finance, Saara Kuugongelwa-Ama­dhila
Namibian Minister of Finance, Saara Kuugongelwa-Ama­dhila
Namibian Minister of Finance, Saara Kuugongelwa-Ama­dhila

The government of Namibia plans to tap into its Johannesburg Stock Exchange (JSE) listed bond facility and raise further money for its budgetary requirements.

The Minister of Finance, Saara Kuugongelwa-Ama­dhila said this week that during the 2014/15 fiscal year, the government plans to tap from the same JSE listed facility preferably during the third term of the fiscal year.

“However, the amount to be issued from this facility will be subjected to cash flow requirements of the government and when market conditions suit the issue,” the minister said this week responding to questions of the newspaper “The Namibian”.

In an interview to the local newspaper of Namibia, she said that the government has planned to finance 20% of its budget deficit through the implementation of bond issues on the international capital market, and the Johannesburg Stock Exchange (JSE).

“A large part of our deficit, about 80% will be financed through the use of loans in our home market, either through bonds or treasury bonds. The remaining 20% will be collected through the issuance of Eurobonds or through public offerings on the Johannesburg Stock Exchange, “said Ms. Kuugongelwa.

In November 2012, the government listed a bond programme worth N$3 billion on the JSE. To date it has raised N$850 million under this programme to partly finance part of the anticipated budget deficit for the 2012/2013 fiscal year.

Kuugongelwa-Ama­dhila said the aim of the government to issue bonds in the international markets is mainly to diversify its funding sources and create benchmarks for Namibian corporate entities which may wish to tap from the international market.

“The proceeds of the bond issued are aimed at diversifying the sources to finance the budget deficit,” she said.
Recall that in 2014, the Namibian government has placed on the side of the South African financial market, bonds worth 3 billion Namibian dollars, or about $ 262 million. A figure which, under the law of finance of the country should rise up in 2015.

The total debt as a percentage of GDP is expected to reach 24, 4 % during the 2014/15 financial year and is expected to fall to 21, 5% by the end of the medium term expenditure framework in 2016/2017.

The debt to GDP ratio will average 23% over this period. “At this level, Government debt stock is still far below the debt ceiling of 35%, the minister said.

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Khalid Al Mouahidi : A binational from the US and Morocco, Khalid El Mouahidi has worked for several american companies in the Maghreb Region and is currently based in Casablanca, where he is doing consulting jobs for major international companies . Khalid writes analytical pieces about economic ties between the Maghreb and the Mena Region, where he has an extensive network