WINDHOEK – Namibia’s total debt has grown to N$80.64 billion according to the June figures. The growth, of 1.19 percent, represents an annual growth rate of 0,15 percent that is slightly lower than the growth of 10.2 percent recorded in the previous month. Year on year the growth has subsided from 25.8 percent mainly as a result of reduced government debt issuance and reduced volume of credit extension to the private sector, according to the Money and Banking Statistics for June released by local brokerage and research firm Simonis Storm Securities.
Private sector credit has grown by 15.5 percent over the past 12 months, above the Namibian nominal Gross Domestic Product (GDP) growth rate of approximately 11.5 percent, indicating continued strong activity within the private sector albeit slightly slower.
As a percentage of GDP, total debt has increased by a percentage point to 77.6 percent. The total Namibian debt of N$80.64 billion, including domestic and foreign government, corporate and household debt, are up from N$73.31 billion a year ago. This translates into a 10.15 percent increase over the 12-month period. The total debt as a percentage of GDP has slowly risen from 63.9 percent at the beginning of 2011 to the current levels of 77.6 percent.
The year-on-year growth, as of June, slowed down slightly to 10.15 percent, from 10.2 percent in May, which is down from the 30 percent growth recorded in early 2012. The credit extension growth rate of 20.14 percent to the corporate sector is currently the greatest of the three components.
Total Namibian government debt has stabilised since January 2012, fluctuating between N$24 billion and N$26 billion. Over the 12 months to June 2013, total government debt has grown by 0.27 percent to N$25.69 billion. The government continues to reduce the proportion of its domestic short term paper, which is currently at 44 percent of total domestic debt, compared to 53.7 percent a year ago.
Credit extended to the private sector grew to N$54.94 billion. The annual growth in credit extension continues to be moderate since the highs recorded towards the end of last year. However, the 12-month growth in June picked up to 15.5 percent from 14.8 percent the previous month.
Corporate debt rose marginally to N$21.1 billion during June, representing a 1.9 percent increase for the month and 20.1 percent over the last 12 months. The 12-month credit extension growth has moderated from 30.2 percent in November 2012 to the current 20.1 percent. This moderation may indicate a slowdown in general business activity. “We expect the trend to remain the same unless there is a change in the interest rate environment,” reads the monthly report.
Credit to individuals continues to grow, albeit at a slowing pace. June’s 12-month growth was 12.7 percent, up slightly from 11.8 percent for May. Household credit growth appears to be growing at a much faster rate albeit slightly lower than June’s 2012 yearly growth of 13.44 percent. “We expect next month’s growth to be even higher with a renewed appetite for consumers to take on debt as can be seen with high new vehicle purchases and increased housing mortgages,” said the Simonis Storm Security report.
Story by Staff Reporter