The World Bank has unveiled a new borrowing strategy for Namibia, marking a notable shift in its engagement with the country.
The recently-approved Count ry Par tnership F r amewo rk (CPF ) for 2025 to 2029 is set to facilitate International Bank for Reconstruction and Development (IBRD) lending, which is a departure from the limited technical assistance previously provided.
The government intends to take a measured approach to IBRD borrowing, with planned lending under the CPF limited to selected state-owned enterprises (SOEs) rather than direct sovereign lending. Nevertheless, this development increases the bank group’s capacity to generate development.
This change, according to the CPF, comes after years of minimal financial interaction, with Namibia borrowing from the IBRD only twice since 1990. IBRD is a key component of the World Bank Group, established in 1944 to assist in the reconstruction of war-torn nations and promote sustainable economic development.
Headquar t e red in Washington DC, the IBRD primarily provides loans and financial products to middle-income and creditworthy low-income countries, focusing on projects to reduce poverty and enhance living standards.
“This CPF represents a significant shift in the World Bank Group’s engagement in Namibia. From 1990 to 2024, Namibia borrowed from IBRD just twice in 2007 and 2008, and the Bank maintained a limited presence in the country for only a short period, between 2011-2014. While the Bank’s technical assistance and policy advice were appreciated, the Bank was not seen as a financier of choice,” reads the report.
It added that while preparing this new strategy, the authorities signalled interest in IBRD financing. A first lending operation was approved in May 2024.
When the government launched its draft policy document, dealing, with public enterprises (PEs) ownership a year ago, it was reported that Namibia had 81 PEs, comprising commercial and non-commercial entities.
The total asset value of commercial PEs stands at N$120 billion liabilities at N$60 billion and the net value assets at N$60 billion. The employment count stands at about 25 000.
The question still remains how these institutions can limit corruption and other irregular practices that cause SOEs to suffer financial losses, or brand and reputational damage, as well as distorting markets.
Independent researcher J o s e ph Sh e e h ama commented that these are good ideas, but the problem still needs to be tightly controlled, and the CEOs must face management repercussions.
“To ensure an efficient distribution of resources and encourage growth, Namibian authorities must also eliminate obsolete and excess capacity, as well as inefficient assets among SOEs. Even if certain SOEs are selected, we still need consistency after reform. If not, the funds borrowed will be a burden for future generations, and will also cost the country money if it doesn’t yield positive results,” Sheehama said.
Going forward, he advised government to ensure funds are directed towards projects that foster growth, while reining in oversized SOEs and limiting the rise in public sector salaries.
“Considering Namibia’s critical economic role, I advise Namibia to be a major player in the World Bank Group’s effort to revitalise Air Namibia. In addition to strengthening the country’s economy, restoring Air Namibia will reaffirm Namibia’s independence and aviation self-sufficiency. Therefore, aviation can maximise these advantages, and have the most beneficial effects on society and the environment,” added the researcher.
-mndjavera@nepc.com.na