Namibia’s finance minister says he did not sign an agreement to any new loans or grant with China during the just ended state visit to that country by President Hage Geingob.
Calle Schlettwein however did not rule out entering into such agreement in the future, saying such option would be exercised if and when the need occurs.
Mutually beneficial financial cooperation between the two countries was extensively discussed, the minister said yesterday.
It was agreed that Namibia can benefit from deepened financial cooperation targeted towards
industrialisation and improved productive capacity, economic diversification and infrastructure development in both the productive and social sectors and especially in agriculture and skills and technology transfer.
In turn, China can utilise Namibia’s strategic geographical location and market access into SACU, SADC, broader
Africa and beyond to serve these markets.
“On the one hand, Namibia’s developmental need to diversify and grow an export-oriented economy was recognised while, on the other hand, China’s ability as the second largest economy to not only provide a significant market for finished goods and commodities, but also the provision of skills, technology and capital, is obvious,” the minister said.
The envisaged financial cooperation, Schlettwein said, would entail grants and concessional loans or blended instruments, public and private investments and cooperation in tax and customs administration.
“Loan and grant agreements will be project-specific and need to be agreed upon on a project by project basis.”
“For now, no new loan agreement has been entered into. As part of the Comprehensive Strategic Partnership between Namibia and China, strategic consultations in bilateral as well as multilateral financial matters will be conducted regularly.”
Government earlier said the just concluded agreement between the Namibian Treasury and the Export-Import (Exim) Bank of China did not give China carte blanche options to pour billions of dollars into the Namibian economy willy-nilly.
Schlettwein was among Cabinet ministers who accompanied Geingob on a seven-day state visit to China, which ended earlier in the week.
Speculation has been rife in recent days that the Namibian delegation took a “begging bowl” to China to secure new loans.
In addition to the agreement with the Exim Bank, Namibia and China also signed agreements and memorandums of
understanding on the export of beef, economic and technical cooperation between the two countries, and on the establishment and operation of the China Space Tracking, Telemetry and Command Station in Namibia. They also agreed to exchange notes on social housing projects.
It was however the agreement with the Exim Bank that grabbed the public attention, given that Geingob when departing for Asia, mentioned that the visit would look at some “financial arrangements”, which he said government would consider if they came at good terms.
Also, Schlettwein mentioned in this year’s budget speech projects that he said need off-budget financing, including industrial and logistics hub infrastructure growth stimulus amounting to between N$10 billion and N$15 billion over the next five years. These capital projects are to be funded through bilateral concessional loan arrangements, the minister said.
Namibia’s public debt stock has gone above the self-imposed target of 35 percent of the GDP. It now stands at 43,3 percent or N$74,5 billion, an increase from 42.6 percent in the 2016/17 financial year.
This financial year the country would have to pay N$5,8 billion in interest payments to service the domestic and foreign interest payments, as well as in borrowing related charges. This is an increase from N$5 billion in the previous financial year. This figure is expected to increase to above N$6 billion in the next financial year, and hit the N$6,5 billion mark the following financial year.