The Namibian government plans to borrow an additional N$7.1 billion from Namibia’s domestic financial market after deciding that local investors can provide the money previously expected from foreign sources.
The borrowing plan covers August to October, ahead of the midterm budget review, which is expected before the end of October.
According to the borrowing plan released by the Bank of Namibia, the Ministry of Finance has increased its domestic borrowing requirement for the 2026/27 financial year from N$20.2 billion to N$27.3 billion, while planned foreign financing has been reduced from N$9 billion to about N$1.9 billion.
The shift does not increase the government’s overall financing requirement, which remains N$29.2 billion for the financial year.
“The Ministry of Finance assessed that the domestic market can absorb the N$7.1 billion previously earmarked for foreign financing,” the plan reads.
According to the statement the decision followed consultations with domestic institutional investors and reflected a change in the source of financing rather than an increase in the government’s total funding needs.
Between August and October, the government plans to raise about N$10.1 billion through government bonds, treasury bills and inflation-linked bonds.
Government bonds are loans investors provide to the state in exchange for interest payments.
Treasury bills are shorter-term government borrowing instruments, while inflation-linked bonds adjust their returns in line with inflation.
Of the planned three-month issuance, N$7.6 billion will come from government bonds, N$1.4 billion from treasury bills and N$1.1 billion from inflation-linked bonds.
The increased reliance on domestic borrowing means local financial institutions, including banks, pension funds and asset managers, will play a larger role in financing government operations.
Foreign financing is expected to fall to N$1.887 billion, comprising N$1.47 billion from the African Development Bank and N$409 million from Germany’s development bank, KfW.
The plan says the overall financing requirement for the financial year remains unchanged at N$29.2 billion, despite the reallocation between domestic and foreign sources.
The borrowing programme also includes a N$1.18 million cash shortfall recorded during government bond sales in the first quarter.
According to the plan, the quarterly borrowing requirement reflects the actual cash needed to finance government operations.
The amount raised can differ from the face value of bonds issued because of market prices, accrued interest, premiums, discounts and currency movements.
“The revised domestic allocation reflects a change in the source of financing and does not alter the aggregate FY2026/27 financing requirement,” the plan reads.
Meanwhile, the Bank of Namibia has scheduled three auctions to allow investors holding the GC27 government bond to exchange it for other government bonds ahead of maturity.
The auctions were scheduled for 24 August, 23 September and 21 October.
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