The central bank has confirmed that Namibia has the money to repay its biggest-ever debt, the US$750 million (around N$13.5 billion) international loan that is due on 29 October 2025. However, the repayment, while good to boost credit for future loans, is expected to make a significant dent in the country’s foreign reserves.
The Eurobond loan was taken out in 2015 to help the government finance its budget and support the domestic economy during a period of low mining income.
Now, a decade later, that debt must be fully paid back. The Eurobond can be thought of as the final instalment on a big home loan, except this is Namibia’s ‘loan.’ Through the Eurobond the country borrowed money from international investors and promised to pay it back, with interest, after ten years.
The Bank of Namibia (BoN) announced it has successfully raised the full amount needed to repay the loan, which is approximately N$13.5 billion when converted from US dollars at the current exchange rate.
Central bank governor Johannes !Gawaxab said this shows Namibia’s strong financial discipline and commitment to meeting its obligations, a message that international investors will take positively. Countries that repay their debts on time are seen as more trustworthy, which helps them borrow at lower costs in the future if needed.
However, making such a large payment has consequences. Namibia will draw from its foreign currency reserves, a pool of US dollars, euros, and other currencies the country holds to pay for imports and stabilise the value of the Namibian dollar. Repaying the Eurobond will significantly reduce foreign reserves, dropping about 25%, from N$63 billion in 2024 to roughly N$47 billion by the end of 2025.
Foreign reserves are like a financial safety net because they help protect the country if global conditions worsen or if imports suddenly become more expensive. A big decline could make the domestic economy more vulnerable to external shocks, so the central bank wants to make sure reserves don’t fall too low.
To soften the blow, the BoN is looking at possible “currency swap lines.” In simple terms, these are arrangements with other central banks (for example, in South Africa or China) that allow Namibia to temporarily exchange its currency for foreign currency when needed, almost like a standby loan.
The Bank of Namibia expects that, after 2025, foreign reserves will start to recover slightly, possibly rising to N$53 billion in 2026 if economic conditions remain stable.
This principal repayment comes at a time when Namibia’s finances are under pressure and when the domestic economy grew 3.7% in 2024 and is expected to grow a modest 3.8% in 2025.
Government income is still heavily dependent on two main sources, namely SACU revenues, the money Namibia receives from the Southern African Customs Union, which has dropped by 11.2% and now makes up 7.7% of GDP, as well as mineral exports. These are mainly derived from diamonds, uranium, and gold and account for about 60% of total export earnings.
Because of this, the government must manage its spending carefully while still supporting growth and employment.
If Namibia completes the Eurobond repayment smoothly, it will boost confidence among international investors, showing the country can handle large debts responsibly. This positive reputation is essential, particularly when other African countries, like Ghana and Zambia, have struggled to repay their debts and lost access to global credit markets. By contrast, Namibia’s smooth repayment could make it easier and cheaper for the country to borrow money again in the future, if necessary.
!Gawaxab recently emphasised that maintaining financial stability and confidence remains a top priority, and the Eurobond repayment marks a significant step in that direction.
-ebrandt@nepc.com.na