Namibia explains IMF loan rationale

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Tiri Masawi

Windhoek – Namibia’s government says the decision to borrow N$4,5 billion (about US$300 million) from the IMF was premised on the fact that such resources could not be accessed from domestic credit sources.

The government has said it needs the money to kick-start a stuttering economy whose health has been badly affected by the COVID-19 pandemic in the face of a budget deficit in the region of around US$1,3 billion.

“We would like to borrow locally as much as possible but the local market does not have the capacity to carry the debt that we want to cater for hence we have decided to go on the international market,” Finance Minister Iipumbu Shiimi said.

“We want to be able to stimulate our education, health, and social amenities. I want to emphasise that the option we have received from IMF is the cheapest we can have,” he explained.

Minister Shiimi added that the government was structuring facilities that made it easier for communal farmers to borrow for productive purposes.

Earlier, President Hage Geingob had said Namibians should appreciate that this was the first time since independence that Namibia had sought an IMF loan, and that in itself demonstrated the gravity of the economic situation.

“We have not borrowed from the IMF for 30 years (and) we are very cautious about the engagement with the IMF. We have not signed yet and we will be very cautious before signing,” he said.

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