Staff Writer
Spreads between Namibian and South African government bonds widened in 2025 as yields in the two markets moved in different directions, the Bank of Namibia said.
South African bond yields declined during the year, supported by improved investor sentiment and policy signals from the South African Reserve Bank.
The central bank reduced its repo rate by 100 basis points to 6.75% by 20 November 2025.
The shift to a single-point 3% inflation target also supported expectations of lower inflation and reduced risk premiums.
Global conditions also played a role. The Federal Reserve cut policy rates by 75 basis points in 2025, supporting capital flows into emerging markets, including South Africa.
South Africa’s credit profile improved during the year. S&P Global Ratings upgraded its long-term foreign currency rating from BB- to BB and its local currency rating from BB to BB+. The upgrade reflected improved fiscal balances, stronger tax revenue and a stabilising debt path.
In Namibia, bond yields adjusted more slowly. As South African yields fell faster, the spread between the two markets widened.
“As a result of these dynamics, Namibian–South African yield spreads widened across the yield curve. At the short end, covering bonds such as GC28 to GC35, average spreads increased by 51.8 basis points to 67.9 basis points during 2025. At the longer end, spanning GC37 to GC50, spreads widened even more significantly, rising by an average of 88.9 basis points to reach 105.4 basis points over the same period,” the central bank said.
