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Namibia's public sector debt balloons

Xinhua, August 11, 2016 Adjust font size:

A Namibian research company has raised concerns with the rising public sector debt that has shot up by 415 percent in the past six years.

In a report just released, Simonis Storm Securities said since 2010, public sector debt has ballooned from 12. 1 billion Namibian dollars (about 900 million U.S. dollars) to 62.1 Namibian dollars by June this year.

This information comes after the Bank of Namibia announced that the country's reserves have fallen from 24.8 billion Namibian dollars in May 2016 to the current 21 billion Namibian dollars.

As a result of this growing public sector debt, Simonis Storm Securities said Namibia's growth for 2016 will be 4.1 percent.

Finance minister Calle Schlettwein said Wednesday that public sector debt increase is over 35 percent of Namibia's gross domestic product.

Schlettwein attributed this growth to the failure to create more jobs and the drop in commodity prices worldwide.

To cater for the deficit, the Namibian government floated two bonds worth 500 million Namibian dollars on July 27 at the Johannesburg Stock Exchange. Enditem