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Where has all the money gone? Banking liquidity tanks, banks say there is no shortage

Where has all the money gone? Banking liquidity tanks, banks say there is no shortage

Liquidity in the banking sector has crashed and banks’ borrowings from the central bank have exploded in a matter of days, at least according to the official statistics.

In the last week of December 2018, local banks still reported healthy daily liquidity positions with the figure published by the Bank of Namibia, just below N$4 billion. This constituted local commercial banks’ combined positions in Namibia and in South Africa.

Less than a week later, by 02 January 2019, the banks’ overall position has gone below one billion dollars for the first time but it came back the next day, hovering above one billion for three days.

On Tuesday, 08 January the overall liquidity position tanked again, going below one billion dollars, and from there it has never recouped.

Thursday, 10 January, the banks’ local position went negative for the first time since 09 May 2017. The overall position remained marginally positive. Last week Friday, however, even a small N$80 million holding in South Africa could not offset the local deficit and the overall position went negative for the first time.

This week, the overall position has continued to deteriorate, hitting minus-N$818 million on Monday, and on Wednesday, Namibian banks reported an unprecedented local deficit of more than N$1.1 billion. A positive position in South Africa of N$516 million did help to improve the overall position to only minus-N$623 million.

In the meantime, Bank of Namibia Repos, i.e. money lent by the central bank to commercial banks, exploded, from N$1.3 billion at the beginning of January to more than N$2.8 billion on Wednesday this week. Bank of Namibia Bills, i.e. money deposited by commercial banks with the central bank, have remained a static zero since 02 January.

Speaking to several analysts revealed the absence of a consensus position on the reason for the dramatic decline in banking liquidity.

One possible reason mentioned, was the significant tax payments made by companies to the Ministry of Finance on 31 December, but this was estimated not to exceed N$1.5 billion, leaving at least another N$1.5 billion unaccounted for. Another opinion was that the lack of a premium in the local Repo rate was prompting banks to switch their own so-called NCDs (Negotiable Certificate of Deposit) from Namibian to South African assets. Futhermore, it was pointed out that NCDs must be held to maturity implying that local liquidity will not quickly turn positive.

The flipside is that buoyancy in the capital market remains elevated. Up until last week, all tenders for government debt continued to be oversubscribed by as much as five times for internal registered stock, and around two and a half times for treasury bills.

Other sources in the commercial banks stated that they are unaware of any liquidity problems, citing capital market performance as a clear sign of high liquidity but failing to explain the zero BoN Bills position. Their only concern was the central bank’s methodology to assess daily liquidity saying that the published figures often fail to reflect real trading liquidity.


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.