Namibia’s central bank has confirmed that it has successfully mobilised the funds needed to redeem its $750 million Eurobond maturing on October 29, marking the largest single debt repayment in the country’s history.
According to Reuters, the Eurobond, issued in 2015, was designed to support Namibia’s development goals, strengthen the national budget, and reinforce the balance of payments.
According to the Bank of Namibia, the total redemption amount, calculated at an exchange rate of 17.5 Namibia dollars to the U.S. dollar, stands at 13.5 billion Namibia dollars ($779 million).
“We have mobilised the full amount. And that mobilisation is within the sovereign debt management strategy of the bank,” Governor Johannes !Gawaxab said during a Monetary Policy Committee briefing on Wednesday.
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He reaffirmed the country’s commitment to maintaining its creditworthiness, saying, “If we issue paper, there’s a clear testament that we are committed to deliver on our promises. The economic fundamentals of the country are above board.”
However, !Gawaxab cautioned that Namibia’s foreign reserves are expected to decline following the Eurobond redemption.
The central bank projects reserves will fall by 25.11 percent to 47 billion Namibia dollars by the end of 2025, down from 63 billion Namibia dollars in 2024.
Despite the anticipated reduction, the Bank of Namibia stated that reserves remain strong and that proactive steps are being taken to safeguard them.
These measures include exploring currency swap line arrangements with other financial institutions to ensure external obligations are met.
The bank also noted that reserves are projected to recover slightly in 2026 to around 53 billion Namibia dollars.
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Image Credit: Reuters
