- Thursday, 05 April 2012 09:36
- Published Date
- Nyasha Francis Nyaungwa
- Hits: 1404
Government domestic debt levels have continued on an upward trend since the introduction of an expansionary budget in 2011 and in March they breached the N$17 billion mark for the first time.
Domestic debt increased from N$16.9 billion in February to N$17.2 billion driven mainly by an increase in internal registered stock debt which for the first time breached the N$9 billion mark.
Between February and March, debt in treasury bills increased by just 0.6%, whereas debt in internal registered stock increased by 3.8%.
But despite the domestic debt reaching record highs in March, Capricorn Group Economist Rowland Brown said at under 2.3%, this increase is the smallest month-on-month change since the introduction of the Ministry of Financeâ€™s expansionary budget in 2011.
â€śSince the introduction of this budget, debt levels have increased by approximately 53%,â€ť he said.
The main debt instruments used over this period were the GC14, which increased by N$150 million (a 13.6% increase); the GC17, which increased by N$80 million (an increase of 19.1%); the GC18, which also increased by N$80 million (an increase of 4.8%); the TB-365, which increased by 50 million (a 1.3% increase) and the GC21, which increased by N$20 million (an increase of 4.8%).
Coupon rates for domestic debt vary between 7.5% (GC14) and 13.0% (GC15), while current average yields vary from 6.05% (GC12) and 9.65% (GC27).
Current domestic debt levels are approximately 20% of GDP, with total debt approximately 27% of GDP. â€śCurrent debt is largely to fund governments TIPEEG programme, however execution rates in 2011/12 of below 75% on TIPEEG projects has meant that debt expansion has been slower than projected,â€ť Brown said.
Further, Brown said abnormally high SACU revenues in 2012 (estimated at 13.9 billion, up from 7.1 billion in 2010/11) will help government run the expansionary budget without incurring further excessive debt.
Total external debt is estimated at approximately N$8.4 billion (awaiting quarterly data from the Bank of Namibia) after the issuance of the Eurobond in October 2011. Debt levels are expected to peak in 2013/14 at approximately 30% of GDP, before returning to approximately 28% in 2014/15 due to fiscal consolidation.
At current levels, Namibiaâ€™s debt remains amongst the countries with the lowest debt to GDP ratios in the world.
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