WINDHOEK –Finance Minister Calle Schlettwein has assured the nation that no public assets or public resources have been collateralised or mortgaged in any of the recent loan agreements that Namibia has signed with the Chinese government.
Schlettwein made this assurance in Parliament on Tuesday while briefing lawmakers about the recent financing proposals made under the 2018 Forum on China and Africa Cooperation (FOCAC).
“No assets, no public resource is collateralised or mortgaged in any of the loans agreement that we have signed, I think it is an important fact that we have to emphasise this,” he said.
“I want to reiterate that Namibia is not in default with any loan, any mortgages of assets or natural resources is not at stake at all, we are not in default, we have the ability to pay and we have done that for the last past 19 years,” he added.
Schlettwein said to date, Namibia has not yet signed any loan agreement with China under this new FOCAC arrangement.
He said from the previous bilateral arrangements, the total outstanding loans from China to date amount to N$2 billion, which is 2.6 percent of the total national debt portfolio or 7.9 percent of the foreign debt portfolio.
Schlettwein said these comprise of interest free loans of N$302 million and N$1.694 billion concessional loans.
Namibia’s debt to China is lower as it only owed N$2 billion when compared to what neighbouring Angola owes China, recently Angola’ Finance Minister Archer Mangueira was quoted by the Angolan Press Agency (ANGOP) saying that Angola owes around US$23 billion (the equivalent of N$345 billion) to China.
He stressed the national debt is managed within the framework of the Sovereign Debt Management Strategy, designed nationally and peer-reviewed by credible external institutions.
He said within this national strategy, Namibia does not intend to take up any significant external debt. “Government has, since 2016, embarked on a gradual fiscal consolidation strategy to stabilise growth in public debt and rein in high budget deficits,” he said.
“We however also recognise that we need to spur economic growth, given the recessionary pressure on the economy,” he added.
Schlettwein said it is through growth that jobs and income are generated and debt is reduced.
“Over the medium-term, we thus envisage a limited, but targeted debt uptake to invest in projects with economic growth potential,” he said.
In this regard, Schlettwein said any additional debt take-up through the bilateral arrangements with China and other development partners will be undertaken within the framework of the national Sovereign Debt Management Strategy and targeted to specific projects. Over the next two years, he said the Medium Term Expenditure Framework (MTEF), the ministry anticipate an uptake of about N$10 billion loan from various sources to fund priority national development programs as proposed in the 2018/19 budget and MTEF.
He said FOCAC offers an opportunity for some of this loan uptake and funding for the Hosea Kutako International Airport is one such priority undertaking.
“This does not imply that the envisaged total bilateral loans will be sourced from China as some sections of the public propagate,” he said.