External debt to pull up – PSG predicts

Despite the external debt having declined in the first quarter of this year, according to the Bank According to the latest data from Namibia, PSG Namibia said the external debt is expected to rise again this year.

The total stock of external debt (private and public sector) declined (-2.0% quarter on quarter) to N $ 95.1 billion at the end of the first quarter of 2018.

The central government's external debt declined from 3.8% yoy to $ 25.4 billion in the first quarter.

The BoN attributed this decrease to the appreciation of the local currency against major foreign currencies.

Private sector external debt declined 1.8% qoq to NZ $ 65.7 billion in the first quarter of 2018, mainly due to lower corporate borrowing in the sector mining.

On the other hand, the external debt of parastatals increased from 6.7 percent to 4.0 billion Namibian dollars at the end of the first quarter.

According to the Namibian PSG, "the private sector's external debt is expected to increase moderately by 4.6% to 70 billion Namibian dollars by the end of 2018 due to weaker demand from the debt of large mines. At the same time, the public sector's external debt is projected to increase by 14 percent year-on-year to N $ 34.4 billion by the end of 2018, as a result of the ongoing $ 750 million loan disbursement. "

Euro-bond debt (57.8%) the main contributor to external outstandings of the government's stock

" The government should not soon exploit the markets of the Euro- and has adopted a policy of fiscal tightening to curb the deterioration of the public debt-to-GDP ratio, "said PSG.

The disbursement of a loan from the African Development Bank (AfDB) raised the external debt of the central government at 19.8% in the first quarter against 9.0% a year earlier, while the share of bilateral loans (11.1%) and JSE-listed bonds (11.4% )

Nearly 60% of the government's total outstanding external debt is denominated in US dollars, while 24% is denominated in rand

. share of external debt denominated in South African currency also rose significantly first quarter (compared to 12.6% in the first quarter of 2017) due to the ADB loan, which is denominated in rand.