Moody’s Investors Service on Friday affirmed several of Namibia’s credit ratings, but also retained a negative outlook.

Those affirmed, Moody’s said, are the Ba1 long-term issuer and senior unsecured ratings.

The decision reflects Namibia’s slowly improving growth prospects, the ratings agency said, as well as “moderate” wealth, both of which are supporting the economy’s shock absorption capability.

Namibia’s institutions have “relative” strength, Moody’s continued, and are sticking to fiscal objectives in a difficult economic and financial climate.

“The decision to maintain the negative outlook reflects Moody’s concern the government will not be able to address the vulnerability to shocks which the structure, level and trajectory of Namibia’s debt burden creates,” said Moody’s.

“Such shocks might include subdued growth in South Africa, lower than expected Southern African Customs Union revenue, a shock to commodity prices, and/or a marked and prolonged tightening in external financing conditions, including renewed depreciation of the South African rand,” it continued.

“While the government has maintained its fiscal consolidation objectives, progress towards these objectives and the related strengthening of the country’s fiscal institutions has been limited so far, leaving Namibia’s credit profile exposed to economic and financial shocks.”

Upside to the ratings could come from “significant” fiscal measures and a strengthening of institutions in Namibia, Moody’s said.

On the downside, the ratings could change if policy does not protect Namibia from higher financing costs or potentially lower revenue.

By George Collard;


12 Dec 2018