Namibia
2010 Article IV Consultation: Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion

Namibia was negatively impacted by the 2008 global financial crisis, reversing years of strong economic performance and deteriorating both fiscal and external positions. Accordingly, the authorities have committed to undertake fiscal consolidation with a view to reduce the fiscal deficit to 2.6 percent of GDP by 2014. IMF staff emphasized the need for an earlier withdrawal of stimulus measures and ambitious fiscal consolidation. Staff also called for streamlining fiscal rules with the debt-to-GDP ratio to help isolate fiscal policy from volatile Southern Africa Customs Union (SACU) revenues.

Abstract

Namibia was negatively impacted by the 2008 global financial crisis, reversing years of strong economic performance and deteriorating both fiscal and external positions. Accordingly, the authorities have committed to undertake fiscal consolidation with a view to reduce the fiscal deficit to 2.6 percent of GDP by 2014. IMF staff emphasized the need for an earlier withdrawal of stimulus measures and ambitious fiscal consolidation. Staff also called for streamlining fiscal rules with the debt-to-GDP ratio to help isolate fiscal policy from volatile Southern Africa Customs Union (SACU) revenues.

I. Background: Entering the Global Crisis from Relative Strength

1. Until recently, Namibia has recorded strong economic performance. During 2004-08 growth averaged 6.3 percent supported by sound macroeconomic policies and robust mining sector output. Buoyant activity in the nonmining sector, especially in the services sector, also contributed to the growth performance, which compares favorably with the 3.8 percent average growth for the other Southern African Customs Union (SACU) countries over the same period. The inflation rate rose steadily from 4.1 percent in 2004 to 10 percent in 2008, driven by fuel and food prices in the latter year. Despite the strong growth poverty has remained pervasive (see Box 1).

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Sources: National authorities; and IMF staff estimates.

2. The fiscal and external positions strengthened in 2006-08. Significant improvement in tax administration, increased mineral export taxes due to high commodity prices, and high SACU transfers contributed to a steady rise in government revenue during 2006-08. At the same time, the authorities contained expenditure growth, resulting in budget surpluses averaging 3.2 percent of GDP annually. The strong fiscal performance allowed the government to reduce public debt to 17.8 percent of GDP by end-2008/09. The external current account balance also recorded surpluses averaging 8.6 percent of GDP annually during 2006-08, reflecting buoyant mineral exports, favorable terms of trade, and increasing SACU transfers. However, significant capital outflows—mostly through pension funds—dampened the accumulation of international reserves, which rose slightly to US$1.4 billion at end-2008 (3.8 months of imports).

Namibia: Main Fiscal Indicators, 2006/07-2008/09

(In percent of GDP)

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Sources: Namibian authorities; and IMF staff estimates and projections.

II. Recent Economic Developments: Enduring the Global Crisis

3. The global crisis adversely affected Namibia’s macroeconomic performance:

  • Output contracted in 2009 as external demand for the country’s main exports collapsed. Real GDP is estimated to have decreased by 0.8 percent in 2009, from a 4.3 percent growth in 2008 driven by a sharp decline in mineral

  • production. Diamond production halved in 2009, while the copper company suspended operations in late 2008 in response to sharply lower prices. Inflation started to moderate as food and fuel prices eased, and the strengthening in the South African rand, to which the Namibian dollar is pegged at par, is passed through to domestic prices. The twelve-month inflation rate stood at 5 percent in April 2010, compared to 10 percent a year earlier.

  • The fiscal position shifted into a deficit in 2009/10. Government revenue fell by 2.3 percentage points of GDP reflecting a drop in mineral revenue and lower SACU transfers as South Africa’s economy contracted. This, combined with a ramp up in expenditures, led to a shift of the fiscal balance into a deficit of 2.8 percent of GDP in 2009/10 from a surplus of 2 percent in 2008/09.

  • The external current account position also deteriorated. In 2009, the current account balance is estimated to have shifted into a deficit of 1.8 percent of GDP from a 2.7 percent surplus in 2008 because mining exports fell, and imports increased on the back of an appreciation of the South African rand and a pickup in construction activities related to mining projects. In addition, foreign direct investment (FDI) slowed down owing to the downturn in the mining sector, while compliance with domestic investment requirements curtailed capital outflows. Gross international reserves remained relatively unchanged at US$1.4 billion (3.4 months of imports) thanks to the allocation of SDRs1 that helped mitigate the impact of the decline in export earnings.

Social Indicators

Despite the strong macroeconomic performance, Namibia’s key social indicators remain weak. Progress is being made towards achieving the Millennium Development Goals (MDGs) by 2015, but poverty is widespread. Income inequality has eased slightly, but remains among the highest in the world. Lack of job opportunities and a skills mismatch in the nonmining sector have led to high structural unemployment with the rate estimated between 35 to 50 percent. The relatively high prevalence of HIV/AIDS is another key challenge confronting the country as it is undermining the country’s productive capacity, and contributing to the weak social indicators.

uA01fig03
Sources: National authorities, World Bank, and World Income Inequality Database.
Figure 1.
Figure 1.

Recent Macroeconomic Performance

Citation: IMF Staff Country Reports 2010, 269; 10.5089/9781455205721.002.A001

Sources: Namibian authorities, IMF staff estimates and World Economic Outlook..

III. Short-Term Macroeconomic Policies: Responding to the Crisis

4. The authorities used the available fiscal space for countercyclical policies. The 2009/10 budget combined tax relief for non mining companies and households (1 percentage point of GDP) and expenditure increases, including spending on infrastructures and social programs (0.9 percentage points of GDP) to offset the decline in external demand. The authorities also granted wage increases to the civil service (0.9 percentage points of GDP). These measures helped sustain activities in construction, manufacturing and services sectors, which partially offset contraction in the mining sector. Given uncertainties about the strength of the global recovery and a time when the output is still below its potential (Box 2), the authorities have decided to maintain an expansionary fiscal stance in the 2010/11 budget, which implies a non-SACU fiscal deficit of 14.8 percent of GDP, up from 13.3 percent of GDP in 2009/10, and an increase in the public debt-to-GDP ratio to 19.6 percent, up from 14.9 percent (¶ 9).

5. Monetary easing in the anchor country enabled the Bank of Namibia (BoN) to pursue an accommodative policy stance. Since the end of 2008, the BoN cut its policy rate by 300 basis points to 7 percent in June 2009 in line with the monetary policy stance of the South African Reserve Bank (SARB). Growth of credit to the private sector remained subdued at 10 percent in 2009, well below its pre-crisis level, as banks tightened their lending conditions.

Estimating Potential Output for Namibia

Estimates of the potential output using the Hodrick-Prescott (HP) filter indicate an output gap in 2010. The results suggest that between 2004 and 2008, buoyant growth in the mining and service sectors pushed the real output above its potential. However, growth contraction in 2009 following the global economic downturn has led to a negative output gap,1 estimated at 2.5 percent of GDP. While the economy is projected to grow close to its potential rate in 2010, this will still leave barely unchanged the output gap resulting from the slack in economic activity in 2009. Eliminating this gap would require a growth rate of 5.9 percent in 2010. It is worth noting that estimations of the output gap for Namibia is complicated by a number of factors, particularly short time series and some weaknesses in national account data.

1 The output gap is defined as the difference between actual output and potential output, as a percent of actual output.

IV. Policy Discussions

6. Against the backdrop of a challenging global environment, the discussions focused on how and when to exit from the current expansionary stance of fiscal policy to preserve fiscal sustainability over the medium term in the face of the significant drop in SACU revenue, while managing risks, and maintaining external and financial stability.

A. Outlook and Risks

7. The near-term and medium-term growth outlooks are positive. In the near term, growth would benefit from the stimulus measures and a gradual recovery in the external demand for Namibia’s exports, particularly diamond. Over the medium term, real GDP growth is predicated on a strong recovery in private investment in the mining sector. Mining of uranium is expected to be the key driver with the commissioning of at least three new mines in the medium term. The improved outlook for world demand for uranium is sustaining inflows of FDI, with a positive impact on the balance of payments over the medium term. Diamond exports, which for a long time helped to sustain economic growth, are also expected to rebound although not to their pre-2008 levels.

8. However, downside risks remain. The authorities recognized that a weakening of the global economic recovery or worse, another dip, could dampen activity within the mineral sector by impacting negatively on commodity prices, with implications for the overall economy.2 In addition, delays in the thawing of financial markets may adversely affect FDI inflows and hinder the recovery in private investment. On the fiscal front, customs and mineral-related taxes, accounting for just under half of total revenue, will continue to be affected by growth prospects in South Africa and external demand for mineral exports. Further downside risks to SACU revenue stem from the possibility of a revision to the revenue sharing formula and the possible expansion of SACU to include additional countries, even though the authorities noted that new members with larger economies may also bring more resources to the revenue pool. Finally, failure to carry through the fiscal consolidation plan could put at risk internal and external sustainability.

B. Unwinding Fiscal Stimulus and Managing Fiscal Risks

9. The authorities recognized that the countercyclical stance contributed to deteriorate the fiscal outlook. With SACU revenue anticipated to drop from 10.5 percent of GDP in 2009/10 to only 2.8 percent in 2011/12,3 the fiscal deficit will widen from 2.8 percent of GDP in 2009/10 to 8.4 percent on average in 2010/11-2011/12, despite an expected significant reduction in government expenditure in 2011/12. The authorities believe that the ample liquidity in the domestic banking system and high demand for government securities would help in the financing of the emerging deficits. While trending down over the medium term, public deficits will stay high, leading to a rapid accumulation of public debt, which would nearly double by 2013/14 (29.1 percent of GDP). Inclusion of publicly-guaranteed debt will push the debt-to-GDP ratio to over 30 percent by 2012/13.

Namibia: Main Fiscal Indicators, 2009/10-2013/14

(In percent of GDP)

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Sources: Namibian authorities; and IMF staff estimates and projections.

10. The authorities are aware of the need for a timely unwinding of the fiscal stimulus and to undertake fiscal consolidation to preserve fiscal sustainability over the medium term. They indicated that the 2010/11-2012/13 Medium-Term Expenditure Framework (MTEF) envisages a sharp reduction in expenditure in 2011/12-2012/13 (4.9 percentage points of GDP) with a view to bringing government expenditure to 28 percent of GDP by 2012/13. Moreover, the authorities are considering measures to strengthen non-SACU revenue, including improving value added tax (VAT) compliance and tax audits, expanding the mineral tax to all minerals and introducing an environmental levy. To this end, they have requested technical assistance (TA) from the Fund to conduct a broad review of tax policy.

11. The authorities are committed to keep the public debt level within the target of 30 percent of GDP. With the onset of the global financial and economic crisis, the authorities decided to raise the public debt-to-GDP ratio from 25 percent to a range of 25–30 percent. On current policies, the debt sustainability analysis (DSA) shows that the level of public debt is sustainable,4 but could escalate if a negative growth shock occurs or contingent liabilities materialize, including losses by some state-owned enterprises (SOEs), borrowing by local government, and possible liabilities from envisaged Public-Private Partnerships (PPPs).

12. The authorities are convinced that strengthening public financial management and the budget process are also needed to improve fiscal outcomes. In line with the recommendations of Fund technical assistance, they have taken steps to move to program budgeting. A new chart of account is being finalized, and four pilot line ministries have been identified to roll out program budgeting with all ministries expected to complete the process by 2011/12. While aware of the need to address the fragmentation of the responsibilities for compilation of current and capital budgets to further strengthen the budget process, the authorities pointed to legislative hurdles that may take time to overcome.

13. Staff underscored the need for deficit reduction starting from 2011/12, and for a more ambitious fiscal consolidation over the medium term. Staff also emphasized the importance of reorienting stimulus spending in favor of capital projects and improving the quality of public expenditures in general. Given the public debt outlook, staff proposed an alternative scenario (Box 3) that would bring the fiscal deficit to near balance, and the public and publicly-guaranteed debt to 27.2 percent of GDP by 2014/15, thereby providing room to respond to adverse shocks going forward. There is also a need to streamline overlapping fiscal rules to provide clearer guidance for fiscal policy.5 In this regard, the debt-to-GDP ratio should be the key anchor for fiscal policy since it captures better on and off-balance sheet items. Setting a target on non-SACU fiscal balance would also help isolate fiscal policy from volatile SACU revenues.

Alternative Fiscal Scenario

Staff is of the view that a more ambitious fiscal consolidation centered on expenditure reforms and revenue enhancement should continue through 2014/15. Compared to the baseline scenario, fiscal consolidation under the alternative scenario would start with an overall budget deficit reduction a year earlier in 2011/12. Expenditure measures should aim at gradually reducing spending to 27.4 percent of GDP by 2014/15. This involves a reduction in non-wage, non-interest current expenditure to their average level of the past five years (9.8 percent of GDP) by trimming non priority spending and accelerating the reforms of SOEs. The authorities also need to contain the wage bill within budgeted levels.1 Increased non-SACU revenue mobilization is also critical to fiscal consolidation efforts. Already, revenue administration has been strengthened through the introduction of comprehensive auditing of VAT refunds and the plan to expand mineral tax to all minerals is a welcome step, but additional measures are required including streamlining tax exemptions, and implementing an integrated tax system to further raise revenue. Creation of a large taxpayer unit would help focus limited resources on large taxpayers.

Namibia: Main Fiscal Indicators Under Baseline and Alternative Scenarios, 2009/10-2014/15

(In percent of GDP)

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Sources: Namibian authorities; and IMF staff estimates and projections.
1 The fiscal consolidation plan envisaged in the current MTEF could only be achieved if the projected increases in the wage bill (3 and 7 percent in 2011/12 and 2012/13, respectively) are not exceeded; these are below the 16.3 percent average increase in 2008-11.

14. Fiscal risks need to be addressed. The authorities acknowledged the importance of fiscal risks and the need to take appropriate measures to mitigate their impact (Box 4). They pointed out the budget documents submitted to parliament already clearly identify fiscal risks, though more could be done. They indicated that steps have been taken to address those risks stemming from contingent liabilities by subjecting SOEs to performance agreement, and moving away from blanket subsidies with a view to strengthening their performance. The authorities are prepared to work with the IMF and other development partners to refine the budget process and adopt best practices with regard to disclosure and management of fiscal risks. In this regard, they have requested technical assistance, notably from the Commonwealth.

Fiscal Risks in Namibia1

Fiscal risk is defined as the possibility of deviations of fiscal outcomes, including government expenditures, revenues, assets, and liabilities, compared to the expectations at the time of the budget preparation. Deviations can be on the upside, when government fiscal balance and public debt are better than envisaged in the budget or on the downside when fiscal outcomes worsen.

Assessment of various sources of fiscal risks suggests that shortfalls in SACU revenue and economic growth are the main sources of fiscal risks in Namibia. After stripping out the impact of anticipated changes in SACU revenue, economic growth, interest rates, terms of trade, and inflation from the deviations of fiscal balance and public debt, there remains a large unexplained residual, which may reflect the importance of contingent liabilities and forecasting errors.

Adopting fiscal rules based on a sustainable non-SACU fiscal balance, and strengthening the budget framework and processes could contribute to mitigate fiscal risks. Moreover, budgets should be based on reasonable growth assumptions and alternative scenarios on key assumptions should be considered. Further, improving disclosure of fiscal risks, especially contingent liabilities, could help promote appropriate contingency responses should they materialize.

1 This box summarizes the findings of an upcoming staff paper on fiscal risks in Botswana, Lesotho, Namibia and Swaziland co-authored by T. Fontaine, K. Kpodar, and N. Toé.
Figure 2.
Figure 2.

Fiscal Developments

Citation: IMF Staff Country Reports 2010, 269; 10.5089/9781455205721.002.A001

Sources: Namibian authorities; and IMF staff estimates.

C. Preserving External Stability and Competitiveness

15. The authorities consider the peg to the South African rand as the best option for Namibia given the historic and economic linkages. They indicated that the peg does not only enhance trade between the two countries, but has also resulted in Namibia having relatively low rates of inflation.

16. Staff estimates under the baseline scenario indicate that Namibia’s real effective exchange rate (REER) is broadly in line with fundamentals (Box 5). Despite a 10 percent real appreciation in 2009 owing to the strengthening of the rand, the REER assessment suggests a negligible overvaluation of the Namibian dollar provided that the authorities’ fiscal consolidation under the baseline scenario takes place. The authorities believe that effective fiscal consolidation and implementation of structural reforms are critical to foster external stability, improve competitiveness, and increase confidence in the viability of the monetary arrangement. Indeed, the envisaged fiscal consolidation by the authorities would contribute to bring down the external current account deficit to 1.9 percent by 2014, which will peak at 5.7 percent in 2011.

Assessment of the Equilibrium Real Effective Exchange Rate

The assessment of Namibia’s REER using the three CGER methodologies suggests a negligible overvaluation of the Namibian dollar under the baseline scenario. With the macroeconomic balance approach, the current account norm stands at a surplus of 2.3 percent of GDP compared to a projected current account deficit of 1.9 percent in 2014 when real output will be close to its potential (see Box 2), which leads to an overvaluation of 5.9 percent.1 Also, the findings of the external stability approach suggest an overvaluation of 4.7 percent, with the current account norm that would stabilize net foreign assets being estimated at a surplus of 1.3 percent of GDP in 2014. Finally, the equilibrium REER approach yields similar results, with the overvaluation estimated a 1.6 percent based on a model that explains changes in the REER by trade openness, investment rate, broad money and relative productivity against main trading partners.2

1 The elasticity of the current account with respect to the REER is 0.7.2 More details on the model are available in “What Do We Know About Namibia’s Competitiveness?” WP/07/191.

17. Improving the business environment is essential to stimulate growth and foster higher employment opportunities. Namibia’s main challenge is creating the conditions to attract and sustain FDI, particularly in the non mining sector. While recognizing that the country’s main strengths lie in its strong institutions, staff noted that labor skill shortages combined with delays in processing work permits, high cost of transport and energy shortages, complicated business registration and licensing procedures, continue to undermine firms’ productivity and weaken FDI inflows. Reducing the continuing high cost of doing business, and creating an enabling environment for private sector-led growth are all critical for improving Namibia’s competitiveness.

Figure 3.
Figure 3.

Indicators of Business Environment

Citation: IMF Staff Country Reports 2010, 269; 10.5089/9781455205721.002.A001

Source: Global Competitiveness Report 2009–10.Source: World Bank’s Doing Business (2010).

D. Monetary and Financial Stability Issues

18. As a member of the Common Monetary Area, monetary policy of the BoN tracks closely that of SARB. Nevertheless, the BoN decided to maintain its repo rate at 7 percent in April and June 2010, despite the fact that SARB cut its rate by 50 basis points to 6.5 percent in March 2010. The BoN felt that a further reduction in the policy rate was not necessary at present as the effects of the previous interest cuts are yet to be fully passed through given the lag in monetary policy transmission.

19. The financial sector weathered relatively well the global financial crisis. The commercial banks, most of which are South African subsidiaries, have been conservative in their lending practices and have had little direct overseas exposure. They tend to be well provisioned and profitable and continue to benefit from prudent supervision by the BoN. However, there has been a sizeable contraction in lending to the private sector from the banking system, which could further limit private sector development.

Figure 4.
Figure 4.

External Sector Developments

Citation: IMF Staff Country Reports 2010, 269; 10.5089/9781455205721.002.A001

Sources: Namibian authorities, IMF, and and IMF staff estimates.

20. The authorities have taken measures to address vulnerability stemming from weaknesses in the supervision of the rapidly growing nonbank financial institutions (NBFIs).6 These include efforts to improve supervision through the strengthening of the Namibia Financial Institutions Supervisory Authority (NAMFISA), but capacity constraints remain. In this regard, the authorities are looking to enhance human capacity within the organization and have formally requested IMF TA in the area of supervision. Further, the Financial Institutions and Markets Bill has been approved by Cabinet and is set to be tabled in Parliament by the end of 2010. Passage of this bill will help to further strengthen NAMFISA in carrying out its obligations.

21. The authorities are aware that careful consideration should be given to the modifications to the domestic investment requirements for insurance companies and pension funds. The amendment, which was put in place in 2009 and is envisaged to be phased-in over a five-year period, limits dual-listed companies to a maximum of 10 percent of local assets and requires a minimum of 1.75 percent of total assets to be invested in unlisted Namibian companies. Given the limited size of the domestic market, the repatriation requirement could encourage risk taking by these institutions and may force them to forgo higher yield investments abroad, thus lowering their profitability. The authorities stressed their commitment to safeguarding the long-term financial viability of the pension funds and insurance companies, but indicated that the domestic investment requirement has stemmed capital outflows, and contributed to the development of local capital markets.

E. Promoting Broad-Based Growth and Poverty Reduction

22. The recent global downturn has highlighted the need for a comprehensive strategy to spur broad based growth in Namibia. The country’s heavy reliance on the mining sector makes it highly vulnerable to commodity price shocks. The economic contraction last year, following more than a decade of uninterrupted growth, has heightened the need for a more broad-based growth strategy. While tapping the potential of the mining sector, it is critical to unlock growth potential in agriculture, manufacturing and services, particularly tourism, through reducing the cost of doing business, improving access to credit, and attracting FDI. Structural reforms to improve the business climate and policies to address infrastructure bottlenecks would contribute to the development of the nonmining sector, and help make a dent in widespread unemployment. The authorities reiterated their commitment to reducing the cost of doing business by investing heavily in infrastructure, roads, port facilities, and power grid extension.

Figure 5.
Figure 5.

Monetary and Financial Sector Developments

Citation: IMF Staff Country Reports 2010, 269; 10.5089/9781455205721.002.A001

Sources: Namibian authorities, IMF and IMF staff estimates.

23. Prioritization in the execution of the National Development Plan 3 (NDP3) (2007/08-2011/12) is needed. The recent global downturn has negatively impacted the Namibian economy and set back the government’s efforts at achieving the NDP3 goals. Renewed efforts and prioritization in the execution of that plan are therefore needed. In this regard, the authorities noted that the MTEF (2010/11-2012/13) will devote about 45 percent of government expenditures per annum over the next three years to priority sectors such as education, health and agriculture, while improving the social safety net to alleviate poverty and inequality. However, low productivity and limited implementation of structural reforms will need to be overcome to foster steady growth.

V. Staff Appraisal

24. The economic recovery is well underway, supported by timely macroeconomic stimulus. However, the outlook is subject to downside risks stemming from uncertain global economic recovery calling for coordination in the policy mix going forward. In particular, if external demand for commodities weakens, and the thawing of financial markets is delayed, the recovery could lose steam.

25. The countercyclical measures have been instrumental in cushioning the impact of the global downturn, but have deteriorated the fiscal outlook. The authorities appropriately took advantage of the fiscal space available entering the crisis to stimulate the economy. However, although an expansionary fiscal stance in 2010/11 appears appropriate given the slack in economic activity and uncertainties about the global recovery, careful attention should be paid to the quality of spending and efforts need to be made to reorient spending in favor of quality capital projects while protecting critical social programs.

26. A more ambitious fiscal consolidation than envisaged in the current MTEF is key to ensuring internal and external sustainability. Fiscal consolidation should start from 2011/12 by targeting a reduction in the overall budget deficit so as to preserve macroeconomic stability. Given the projected sharp drop in SACU revenue and rapid debt accumulation in the medium term, the authorities need to step up efforts at reducing public spending and mobilizing non-SACU revenue to reduce the projected fiscal deficits and public debt to sustainable levels. In this context, containing the wage bill, accelerating the reforms of SOEs, and improving non-SACU revenue mobilization should be accorded high priority.

27. Fiscal risks need to be closely monitored. The measures being undertaken by the authorities need to be complemented by reforms, including strengthening the budget process, bringing into effect the SOEs Governance Act, and establishing the institutional and legal framework for PPPs.

28. The exchange rate peg to the rand continues to be the main anchor of monetary policy. Despite the peg to the South African rand, the BoN monetary policy stance has started since April 2010 to deviate from the interest rate policy of SARB. Staff believes that there is a scope for reducing domestic interest rates by bringing the policy rate in line with South Africa’s.

29. Upgrading the supervision of NBFIs and addressing concerns about the tightening of the regulation on domestic investment requirements for pension funds and insurance companies are critical to ensure financial stability. Speeding up the approval of the Financial Institutions and Markets Bill, and strengthening NAMFISA as an independent body would go a long way in addressing weaknesses in prudential regulations and supervision of the NBFIs. Regarding domestic investment requirement, short of reversing it or reducing its rate, it is of paramount importance to monitor closely the impact on pension funds with a view to mitigating risk taking by institutional investors and safeguard their long-term financial viability.

30. It is recommended that the next Article IV consultation take place on the standard 12-month cycle.

Table 1.

Namibia: Selected Economic and Financial Indicators, 2007-14

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Sources: Namibian authorities; and IMF staff estimates and projections.

Figures include public enterprise and central government investment.

Figures are for the fiscal year, which begins April 1.

Figures include government deposits.

Includes SDR allocations in 2009.

Public and private external debt.

Table 2a.

Namibia: Central Government Operations Under Baseline Scenario, 2007/08-2014/15

(In millions of Namibian dollars)

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Sources: Namibian authorities; and IMF staff estimates and projections.

“Overall balance” reflects externally financed project spending (except for roads) that is not channeled through the state account.

“Overall balance excluding extrabudgetary spending” excludes such spending and thus corresponds directly with the authorities’ concept.

The change in domestic debt includes bonds issued for local capital market development.

Table 2b.

Namibia: Central Government Operations Under Baseline Scenario, 2007/08-2014/15

(In percent of GDP; unless otherwise indicated)

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Sources: Namibian authorities; and IMF staff estimates and projections.

“Overall balance” reflects externally financed project spending (except for roads) that is not channeled through the state account.

“Overall balance excluding extrabudgetary spending” excludes such spending and thus corresponds directly with the authorities’ concept.

The change in domestic debt includes bonds issued for local capital market development.

Table 2c.

Namibia: Central Government Operations Under Alternative Scenario, 2007/08-2014/15

(In percent of GDP; unless otherwise indicated)

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Sources: Namibian authorities; and IMF staff estimates and projections.

“Overall balance” reflects externally financed project spending (except for roads) that is not channeled through the state account.

“Overall balance excluding extrabudgetary spending” excludes such spending and thus corresponds directly with the authorities’ concept.

The change in domestic debt includes bonds issued for local capital market development.

Table 3.

Namibia: Balance of Payments, 2007-14

(In millions of U.S. dollars; unless otherwise indicated)

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Sources: Namibian authorities; and IMF staff estimates and projections.

Southern African Customs Union.

Includes SDR allocations in 2009.

International investment position.

Table 4.

Namibia: Monetary Developments, 2005-11

(In millions of Namibian dollars, end of period; unless otherwise indicated)

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Sources: Bank of Namibia; and IMF staff estimates and projections.

“Others” includes local and regional government and nonfinancial public enterprises.