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After the hot air has settled, now is the time to realise we must just stick with our debt strategies

After the hot air has settled, now is the time to realise we must just stick with our debt strategies

The downgrade of Namibia’s sovereign paper by Moody’s is the non-event of the decade. On the Monday after the announcement, the first trading day, the movement in the yields was a mere 3 basis points on the two Eurobonds, that is three hundreds of a percentage point. That is nothing.

Compared to the collapse of Greek and Cypriot bond prices, Namibia’s debt instruments came through like chocolate candy for children.

Later during last week the yields went up by another basis point hovering between 4 and 6 basis points more than the previous Friday when Moody’s sent the Cabinet into a flurry by their unsolicited, unconsulted, unilateral action.

Early on the Saturday moring I received several calls asking me what will happen now that our bonds are so-called junk status. I declined to give any comment saying merely that we will have to wait and see what the market does. On Monday I started tracking the Eurobond yields and the NAM001 on the JSE, benchmarked by the South African R2023. Movements were minimal and a comparison of spreads to when these instruments were listed actually showed that spreads between the Namibian bonds and the South African benchmark counterparts, have narrowed. In other words, the yield curves have flattened.

This week, the Namibia Chamber of Commerce and Industry came out with the best analyses by far so far. I chuckled when I read that their analysts also refer to the downgrade as a non-event since I used that exact same word a day earlier when voicing my opinion on NBC Radio.

The analysts also monitored the yields and came to the same conclusion, i.e. the market (and investors) is ignoring the downgrade.

Much can be said about Moody’s Modus Operandi, but I believe the best tack comes from the Minister of Finance himself when, in a circumspect way, he said the downgrade was unexpected.

Perhaps the biggest immediate impact was the massive scare it gave the government and in a sense, I do not think this is bad. We needed an independent third party to tell us that if we do not address our debt curve, we will run into trouble. However, the way Moody’s went about it does not find my approval. On the contrary, almost everything the minister said I agree with. The only difference is, he is a very polite person and I am not. I would have said it in a much more in-your-face way.

Nevertheless, the tone of both the Friday and the Monday finance ministry statements is quite revealing. Here one senses the government realised they are in a minefield and they have to step very carefully. So, purely by the tone of the discourse, I have to commend the Cabinet and the Minister of Finance for their deliberate, yet tactful appraisal of the situation.

In the week following the downgrade, we were flooded by a barrage of clueless, hot air from just about everybody who think he or she knows how bond markets work, or what the impact of a ratings agency is. When that subsided, it became time to assess the action and the possible fall-out while trusting the minister to take care of the diplomatic handling of the little storm in a teacup.

One sentiment I picked up from several opinionators was the rejection of the downgrade by the government. This is utter nonsense and the two official statements go to great lengths to play the ball and not the man. The minister was adamant to assure both us and Moody’s that the rationalisation programme is real and that the government remains committed to it. I believe he knows the official Fitch rating is due in just over a month, and I am sure there is nothing he will do to jeopardise our standing with Fitch.

But he is also entirely correct to state that the statistics used by Moody’s covered only four months since the new budget and that the intended results work on a longer time frame. It is now an important question whether Fitch will use statistics of a longer range, or will let themselves simply be guided by the Moody’s sentiment. I doubt the latter as it will probably reflect poorly on Fitch’s ability and independence but if we come to the next Article IV Consultations in November and we sit with the paradox of two opposing ratings, it may cause some problems further down the line.

Neither the government nor the minister would want to go into a confrontation with ratings agencies. In this regard, the relationships have to be protected and fostered for we need them deep into the future if we want to continue accessing the bond markets. And we have to because that is a major source of the capital Namibia requires for her development and that of her people.

Ultimately, the NCCI analysts are 100% correct when they observed that the only important consideration is what the market does. The rest is mostly statutory but rating are required to list bonds, so with ratings we will continue.

I have posted the summary of the NCCI’s analysis under Special Focus. The full document can be requested from them. It is an excellent assessment of what happened, where we stand and what we are to watch out for over the next few months. I am sligthly perplexed as to who the actual author is because nobody at the chamber that I know can do that level of accurate, incisive, insightful analysis.

I thank IJG Research for the visual I have used with this article. It is not to show anything other than the bond largesse we went through last year.


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.