Policy interventions place economy on credible recovery path – Schlettwein

Executive director for the Economic Association of Namibia, Klaus Schade, warned that the downgrading is expected to increase the future costs of borrowing, which will increase the allocation to statutory expenditure and reduce the funds available for other vital expenditure.

However, he emphasised that borrowing costs are most likely not affected in the short-term, since the financial markets have to some extent factored in the possible downgrading. Schade also noted that the downgrading could result in foreign direct investors reviewing their investment decisions and expecting a higher return that compensates for the increased risks.