Geingob defends Namibia's move to settle invoices

11 Apr 2018 20:30pm
WINDHOEK, 11 APR (NAMPA) - President Hage Geingob on Wednesday defended his government's decision to settle outstanding invoices, which he said led to sovereign credit rating downgrades to 'junk' status by Moody's and Fitch late last year.
Fitch in November cut Namibia’s long-term foreign-currency rating to BB+ from BBB- with a stable outlook, citing weaker-than-forecast fiscal outcomes and its projection that public debt-to-Gross Domestic Product (GDP) would rise over the medium term.
The downgrade came after Moody’s also lowered the country’s long-term senior unsecured bond and issuer ratings to Ba1 from Baa3 and maintained a negative outlook in August.
Geingob said the downgrades were in response to the government's efforts to settle invoices. Not doing so would have caused more harm to the economy, particularly small and medium sized enterprises, he said.
“Domestic debt and debt issued in the South African market however, remain rated at investment grade,” he noted in his 2018 State of the Nation Address to Parliament.
“While our debt ratio increased to 43 per cent, our debt remains within sustainable levels as a ratio to GDP and well within the SADC (Southern African Development Community) benchmark of 60 per cent.”