Chamwe Kaira
Namibia’s international reserves dropped to N$57.4 billion at the end of May, a 9.8% decline from the previous month, according to the Bank of Namibia (BoN).
The decline was driven by net outflows from commercial banks, customer foreign currency (CFC) withdrawals, and revaluation losses caused by the strengthening of the Namibian dollar against major currencies.
The current level of reserves translates into 3.7 months of import cover. Excluding oil exploration and appraisal activities, the import cover stood at 4.6 months.
Commercial banks’ cash holdings fell to N$8.5 billion in May from N$9.9 billion in April, due to net outflows related to trade activities.
The non-performing loans (NPL) ratio improved slightly, dropping to 5.4% at the end of the first quarter of 2025 from 5.7% in the previous quarter.
The decline was supported by a drop in non-performing loans and an increase in total loans and advances.
The central bank said the mortgage loan category recorded a 6.6% quarterly decline to N$3.3 billion at the end of March.
“Annual growth in mortgage remained in negative territory for a second consecutive month at -0.2% during May, relative to -0.1% recorded in April and an inert growth in March. The contraction in mortgage credit which initially started in August 2022 (with the exception of September-October 2024) and again since November 2024 to date was due to net repayments made by corporates, coupled with write-offs and the general sluggish demand for mortgages by households,” the central bank said.
Meanwhile, growth in instalment sales and leasing credit slowed to 13.8% in May, down from 16.4% in April. The slowdown was linked to lower growth in vehicle sales.
Credit extended to businesses grew by 6.5% in May, compared to 7.1% in April.
The decline was due to net mortgage repayments by businesses and reduced uptake of other loans and advances, including installment sale and leasing credit.
Household credit growth stood at 2.5% in May, slightly down from 2.7% in April.
Private sector credit extension (PSCE) reached N$119.1 billion in May, with annual growth moderating to 4.1%, compared to 4.5% in the previous month.
