Namibia has secured a 10 billion Namibian dollars ($750 million)loan from the African Development Bank to finance its budget deficit and infrastructure projects, Finance Minister Calle Schlettwein said on Thursday.
Namibia's budget deficit is expected to narrow to 3.6 percent of GDP in the current 2017/18 fiscal year from 6.3 percent in the prior year.
Schlettwein said the loan will be distributed over a two-year period with N$6 billion allocated for budget support, while N$4 billion will be used to finance infrastructure in sectors such as transport and renewable energy.
The Namibia government is facing a severe cash crunch that has resulted in budget cuts, as well as liquidity constraints in the domestic market, characterised by persistent undersubscription of government debt instruments.
“The domestic market remains the government’s primary source of funding the budget deficit. This programme-based operation is thus a time-bound measure to supplement what the domestic market could provide, while liquidity conditions improve,” Schlettwein said.
($1 = 13.3260 Namibian dollars)
(Reporting by Nyasha Nyaungwa; Editing by Olivia Kumwenda-Mtambo and Pritha Sarkar) - Reuters