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It is not additional debt, it is tapping the credit strength of the African Development Bank

There certainly is room for irony in politics and economics. Earlier this week the Minister of Finance gave us an update on how strong or weak the economy is right now.

Nothing new was said except for some sober views on the detail of the N$10 billion “loan” we are receiving from the African Development Bank as bridge financing to paper over this year’s budget deficit.

I think it was a good point by the minister to remind us that this financing comes in tranches and that everything is in place for the first N$3 billion to be transferred. That should make a substantial difference to government cash flow, and I am sure the sinking construction sector will be extremely glad to hear this news.

However, it is paragraph 20 of the minister’s statement that caught my eye: “This is not an additional loan but a budget financing mechanism.” Does this imply, the loan, or facility if you want to call it that, will be forgiven after 15 years? I doubt it. The fastest way for the African Development Bank to shed its credibility is to acquire a debtor that will eventually turn into a creditor.

Be that as it may, the way it was presented is probably just a play on words to make the idea of having to borrow from a private institution to cover the deficit, a bit mor palatable from a political perspective. The way I get it, we still have to pay back the “loan” and we still have to service the interest for the next 15 years. Sounds very much like a conventional bond, does it not?

The most inspring remark in the ministerial statement is its cost of servicing. At least it now shows that some thinking has gone into taking up this money. The Johannesburg Interbank Acceptance Rate is a very stable rate, and 80 basis points is a conservative premium, very much in our favour seeing that we battled throughout last year to access the conventional capital markets in Windhoek and Johannesburg.

For the rest, it seems the statement’s intention is mostly to bring us up to speed regarding recent developments, and here I sense the underlying message is one of reassurance and confirmation that the contingency plans are working, or at least starting to work.

At this point, it is probably one of the most difficult things to try and make accurate predictions on economic performance for the rest of the year. The money from the African Development Bank will make a huge impact seeing that the shortfall that was anticipated in March, of around N$5 billion, will now be taken care of mostly by this injection. It is a good sign that our number one financial planner is confident enough to state in public that our entire deficit will be fully-funded from this money, together with what will be raised from the local capital market.

It means the financial authorities got together between March and now, and that there must be some form of tacit agreement between the government and investors. Whether it will be bonds as usual or so-called private placements, remains to be seen.

Still, I think it will turn out to be an irrelevant debate. The only important thing is that the deficit is financed and that we have reasonable guarantees for that. It implies that the budget can now be executed fully the way it was presented. The most important impact is on the expenditure side.

If provision is in place for the deficit, then it means the government can go ahead with its planned expenditure, and that should see a very substantial amount of money entering the local market in a relatively short time. It will also enable all the projects which have been interrupted, to carry on or be resumed. All in all, liquidity in the local market should bounce back fairly rapidly simply because government expenditure has been restored to normal levels.

Do not expect fireworks. The allocated expense items in this year’s budget are for all practical purposes on exactly the same level as last year’s budget. The big difference is that the plug will not be pulled with the Mid-year Review, indicating that we can expect a “normal” level of economic output (and growth) for this year.

I have much improved expectations for the second semester. I believe a number of outstanding government commitments will now be cleared and the projects that were put on hold will continue or be restarted. In combination with the list published earlier by the Ministry of Works and Transport, indicating which projects will carry on this year, some modicum of an operational base has been re-established.

Perhaps, not so much by luck but by solid planning, our economy will look far healthier come December, than what it looked when we started the year in January.

About The Author

Daniel Steinmann

Brief CV of Daniel Steinmann. Born 24 February 1961, Johannesburg. Educated at the University of Pretoria: BA, BA(hons), BD. Postgraduate degrees are in Philosophy and Divinity. Editor of the Namibia Economist since 1991. Daniel Steinmann has steered the Economist as editor for the past 29 years. The Economist started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at It is the first Namibian newspaper to go fully digital. Daniel Steinmann is an authority on macro-economics having established a sound record of budget analysis, strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored hundreds of journalism students as interns and as young professional jourlists. He regularly helps economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. He is frequently consulted by NGOs and international analysts on local economic trends and developments. Send comments to

Following reverse listing, public can now acquire shareholding in Paratus Namibia


20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.