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Fitch affirms Namibia sovereign rating at BB+ with a stable outlook

Fitch affirms Namibia sovereign rating at BB+ with a stable outlook

Fitch Ratings (Fitch), this week announced its decision to affirm Namibia’s long-term foreign currency credit rating at sub-investment grade and kept its outlook at stable.

According to a statement released by the agency, the affirmation and the stable outlook take into consideration the government’s stated commitment to stabilise debt and fiscal reforms, as well as signs of a modest economic recovery. Fitch has cut its growth forecast for the Namibian economy to 0.8% (2.0% previously) in 2018 and 1.8% (3.0% previously) in 2019 due to a deeper-than-expected contraction in domestic demand.

This comes after Fitch downgraded Namibia’s sovereign credit rating in November 2017 from BBB-.

Regarding government policy, the rating agency said policy uncertainty has eased somewhat following Swapo’s elective conference in November 2017 and the subsequent retraction of controversial provisions of the draft National Economic Equitable Empowerment Bill (NEEEB).

“We expect a revised [NEEEB] draft bill to be submitted to parliament ahead of the 2019 presidential election. A land reform conference is scheduled to be held in October 2018 and might lead to some policy uncertainty amid calls for expropriation without compensation, a measure that is opposed by the government,” the rating agency said.

Klaus Schade, Research Associate at the Economic Association of Namibia, stressed that although Public Private Partnerships are not a solution to all infrastructure needs, a careful consideration on a project-by-project basis could reduce the burden on public coffers, reduce the risks of cost and time overruns.

“We need smart policies that balance the need to address major social challenges of poverty, inequality and unemployment with the need to remain attractive to domestic and foreign investors. This requires a continuation of the close cooperation between the public and private sector,” Schade said.

Furthermore, analysts from PSG Konsult Namibia expect that a positive rating action from either Fitch or Moody’s is unlikely in the coming 12 months and that risks to the sovereign credit rating are skewed to the downside.

“Although growth is expected to recover over the medium, it will be hampered by fiscal consolidation, structural problems such high unemployment, a large skills shortage, a lack of investment in value-added sectors as well as the ongoing global trade frictions,” PSG added.


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

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

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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.