Business Reporter
AN economist from local stock broking and wealth management firm Simonis Storm Securities, Almandro Jansen, has opined that the 2026/27 Budget represents a stabilisation framework under constraint.
Jansen explained that real Gross Domestic Product (GDP) growth, revised down to 2.9% in 2025 from 3.7% in 2024, is projected to recover modestly to 3.1% in 2026, with the medium-term average hovering around 3.3%.
“This trajectory signals stabilisation rather than acceleration. The recovery remains heavily anchored in uranium and gold mining, alongside wholesale trade and transport. Secondary industries, particularly manufacturing, continue to lag, underscoring that Namibia’s growth model remains concentrated and commodity-dependent. This matters because a 3.5%–4.0% growth environment can stabilise debt, but it rarely delivers rapid deleveraging unless fiscal policy produces sustained primary surpluses and revenue buoyancy improves structurally,” Jansen said.
He added that this is where the budget’s sensitivity becomes more pronounced. “A 3% growth rate provides a nominal anchor for debt stabilisation, but it is insufficient to rapidly reduce the debt-to-GDP ratio without sustained primary surpluses and stronger nominal growth. Moreover, global conditions remain uncertain. While Sub-Saharan Africa is expected to grow above 4%, advanced economies are slowing, and commodity markets remain sensitive to geopolitical disruptions and supply-chain shifts. Namibia’s growth path remains exposed to fluctuations in global uranium and gold demand, SACU inflows, and regional trade dynamics. In that sense, the growth baseline is reasonable but vulnerable, particularly because the economy’s most fiscally important sectors remain exposed to external price and demand conditions,” Jansen said.
He added that this vulnerability is most evident in the revenue story. “Total revenue for FY2026/27 is projected at N$89.8bn, a modest increase from the revised N$87.4bn in 2025/26. The improvement is primarily driven by higher SACU receipts, estimated at N$24.3bn. Yet this rebound must be interpreted carefully. Revenue-to-GDP declined sharply in 2025/26 to 31.3% from 35.9% the previous year, reflecting weaker SACU transfers and declining diamond revenues. That structural drop in the revenue ratio is significant. It illustrates how exposed Namibia remains to regional customs volatility and commodity cycles, and why budget arithmetic can shift quickly when SACU or mining underperforms,” Jansen said.
Jansen said that total spending for 2026/27 is projected at N$103.6bn. Operational expenditure rises to N$81.3bn, with government indicating savings of N$2.3bn through rationalisation. However, structural expenditure pressures persist. Civil service salary adjustments amounting to N$1.7bn, N$2.8bn allocated to tertiary education subsidies, expanded recruitment across health, policing, and correctional services, and increases in social pensions all reinforce the rigidity of the wage and transfer structure. Jansen said that these commitments are socially defensible and institutionally understandable, particularly in a context of service delivery pressures and skills retention needs, but they also highlight the fiscal reality: consolidation is being pursued within a spending structure where large components are “sticky” and difficult to adjust quickly.
He further added that public debt is projected to rise from N$174.5bn in 2025/26 to N$217.3bn over the medium term, stabilising around 67.5% of GDP.
“Stabilisation at elevated levels is still progress compared to an upward spiral, but it does not yet represent decisive deleveraging. The most binding constraint remains interest costs. Interest payments are projected to rise from N$14.3bn in 2025/26 to N$16.2bn in 2026/27, consuming approximately 18.1% of total revenue. In practical terms, nearly one in every five dollars collected will be allocated to debt servicing. This is the clearest sign that debt is now crowding out fiscal space for discretionary policy priorities,” Jansen said.
He stressed that even with a restored primary surplus, elevated interest costs compress flexibility. “Sustained improvement would require stronger nominal growth, improved revenue buoyancy, and careful debt management to reduce refinancing costs. Rising global rates or tighter domestic liquidity conditions could quickly increase borrowing costs, placing pressure on the consolidation path even if spending discipline holds,” Jansen said.
Photos: Ministry of Information and Communication Technology – Republic of Namibia/Simonis Storm Securities
