Household debt increases

10 Mar 2014 16:20pm
WINDHOEK, 10 MAR (NAMPA) - The total household debt in the country at the end of January 2014 was nearly N.dollars 36,62 billion, compared to about N.dollars 31,80 billion a year ago.
This translates to a 15,18 per cent increase over the 12-month period, the Money and Banking Statistics for January 2014 issued by Simonis Storm Securities showed on Monday.
“Annualised figures have once again shown record-highs in household debt numbers. With year-on-year growth of 15,18 per cent, there are looming fears that the Namibian consumer is highly-indebted, and will therefore have to brace him/herself as the markets align towards a higher interest rate environment,” the statement warned.
Instalment credit grew by 15,25 per cent, which represents a year-on-year high, while the other loans and advances’ (other loans) category grew by 27,51 per cent.
Credit extended to the private sector (corporate and households) grew to more than N.dollars 59,90 billion in January 2014.
The annual growth in credit extension remains moderate, with growth attributed mainly to other loans and advances, and instalment credit groups.
The two categories grew by 14,71 per cent and 27,72 per cent, respectively.
On a monthly basis, the private sector credit extension (PSCE) index grew by 1,01 per cent, lower than December’s monthly growth rate of 1,18 per cent.
On a yearly basis, the PSCE edged higher to 14,38 per cent, mainly on the back of increased credit uptake from households.
According to the analysis, South Africa’s PSCE saw a slight pickup in January to 8,20 per cent on the back of credit growth to businesses.
South African consumers, however, are feeling the pressure of their current debt levels, which is evident in the low household debt growth of five per cent. Conversely, in Namibia, PSCE growth averaged 14,86 per cent during the course of 2013 mainly on the back of household debt, which is growing by 15 per cent on average year-on-year. January showed growth in PSCE at 14,24 per cent.
On corporate debt, the analysis indicated that it stood at N.dollars 22,96 billion in January 2014.
The 12-month credit extension growth has slowed from 30,2 per cent in November 2012 to the current levels of 12,49 per cent.
Corporate debt seems to be centralised amongst the other loans and advances’ (other loans) category, which has recorded an annualised increase of 27,99 per cent.
With regards to Government debt, the analysis showed that the total Namibian government debt had grown to N.dollars 29,33 billion since August, increasing by an estimated N.dollars 300 million every month.
Total Government debt grew to N.dollars 29,33 billion in December, which represents 11,45 per cent growth year-on-year.
The report further indicated that Government continues to reduce the proportion of its domestic short-term paper (TBs) as longer-term internal revenue services (bonds) remain favourable.
Currently, TBs account for 41,99 per cent of the total domestic debt issued, while the Internal Registered Stock (IRS) accounts for the remaining 58,01 per cent.
Estimates showed that foreign debt stock had grown by 16,17 per cent year-on-year as a depreciated rand continues to impact Namibia’s bilateral and multilateral debt agreements.
Total Namibian debt (comprising domestic and foreign government, corporate and household debt) at the end of January was N.dollars 89,67 billion, up from N.dollars 78,02 billion a year ago.
This translates to a 13,49 per cent increase over the 12-month period.