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Government y-o-y debt continues to soar

Government y-o-y debt continues to soar

The country’s total debt increased to N$164.5 billion by the end of March, compared to N$164.1 billion reported in the prior month, Simonis Storms Securities (SSS) reported.

This shows a year-on-year (y-o-y) increase of 7.4% and a month-on-month (m-o-m) increase of 0.3%.

“Namibia’s government debt as a percentage of GDP is increasing faster compared to its neighbouring countries South Africa and Botswana which remains worrisome,” Meameno Johannes, Analyst at SSS said.

Johannes stressed with government debt as a percentage of GDP higher than the long-term average for the past three years, it is likely that this trend will continue in 2018 as government continues to borrow more and economic growth remains slow.

Meanwhile, annual growth in money supply (M2) rose at the end of March 2018, showing a y-o-y growth of 7.1 %. That is 0.6% higher than the prior month.

On another note, inflation remained unchanged in March 2018 at 3.5% as that of the preceding month. This, SSS noted, is attributed to less spending as economic activity remains sluggish.

Furthermore, Private Sector Credit Extension (PSCE) remained in line with February at N$91.1 billion at the end of March 2018. The slow growth in PSCE was brought about by the negative growth from instalment credit and other loans that contracted by 0.8% and 1.3% m-o-m, respectively.

“The increase in total debt as a percentage of GDP is attributed to the increase in government debt that has been growing faster than PSCE,” Johannes said.

About The Author

Donald Matthys

Donald Matthys has been part of the media fraternity since 2015. He has been working at the Namibia Economist for the past three years mainly covering business, tourism and agriculture. Donald occasionally refers to himself as a theatre maker and has staged two theatre plays so far. Follow him on twitter at @zuleitmatthys