The latest statistics from the Bank of Namibia (BoN) show that total Namibian debt (comprising of domestic and foreign government, corporate and household debt) grew by 1.47 percent in August to N$113.46 billion, and was up 18.52 percent when compared to debt levels a year ago. This represents an increase in total debt to gross domestic product (GDP) ratio of 71.21 percent.
According to an analysis by Simonis Storm Securities (SSS) total debt grew by 18.52 percent to N$113.46 billion at the end of August from N$95.73 billion in the prior year. Household, corporate and government debt continued to rise amounting to N$43.75 billion, N$30.94 billion and N$38.77 billion respectively.
“Annual growth in government debt continues to grow the quickest among the categories by 24.41 percent, followed by a growth rate in corporate debt of 23.07 percent,” noted SSS’s Director of Research, James Cumming.
Meanwhile, overall instalment credit grew to 16.54 percent year-on-year compared to 16.18 percent in July, and to 1.68 percent on a monthly basis.
“With BoN’s main focus on the household instalment credit growth, this sub-category grew by 2.44 percent year-on-year and by 1.82 percent on a monthly basis,” noted Cumming.
Further, BoN’s most recent statistics indicate that foreign reserves continue to slow at the end of August to N$14.07 billion from N$14.33 billion at the end of July.
“BoN cited that the drop in reserves was as a result of the government’s net payments abroad and commercial banks’ purchases of the rand for import payments in August …The weaker rand continues to put pressure on the country’s foreign reserves,” remarked Cumming.
The statistics show that total private sector credit extension (PSCR) rose significantly by 15.83 percent to N$73.70 billion at the end of July from N$72.65 billion in June. This was mainly fuelled by an annual increase in the growth of mortgage loans, overdraft facilities and other loans and advances by 16.64 percent, 14.51 percent and 14.32 percent respectively. Annual instalment credit slowed to 16.18 percent.
In addition, total household debt grew by 10.96 percent to N$43.75 billion on an annual basis. On a monthly basis, household debt recorded a slow growth of 0.76 percent from 1.54 percent growth in July.
“The slow growth in this category was mainly due to slow monthly growth in mortgage loans and spending through overdraft facilities by 0.95 percent and -4.30 percent respectively. On an annual basis, overdrafts grew by a slow pace of 5.01 percent in August compared to the 12.75 percent recorded in July, while instalment credit rose by 2.44 percent and other loans and advances grew by 22.15 percent on an annual basis,” said Cumming.
Also, corporate debt grew by 23.07 percent to N$30.94 billion at the end of August. On a yearly basis, the biggest contributor to corporate debt remains the instalment credit category which grew by 42.38 percent but recorded a 1.51 percent month-on-month.
Mortgages grew by 29.21 percent over the 12-month period and by 3.09 percent at the end of August from 2.63 percent in July. Furthermore, spending through overdraft facilities and other loans and advances grew by 15.17 percent and 13.22 percent over the 12-month period.
On a monthly basis overdrafts continue to grow by 3.40 percent from -1.72 percent, while other loans and advances slowed to 1.28 percent from 1.76 percent in July.
Credit extended to the private sector (corporate and households) grew by 15.68 percent to N$74.69 billion at the end of August from N$64.57 billion over the 12-month period.
On a monthly basis this category slowed to 1.35 percent in August from 1.44 percent at the end of July. The slow growth was as a result of a slow monthly growth in mortgage loans and other loans and advances to 1.45 percent and 0.83 percent form 1.77 percent and 1.98 percent respectively.
Instalment credit and overdraft facilities grew by 1.68 percent and 1.30 percent at the end of August and on an annual basis by 16.54 percent and 12.37 percent respectively.