Chamwe Kaira
Credit and liquidity data for November 2025 show that monetary easing continues to support Namibia’s economy, though growth has slowed after one-off liquidity adjustments, according to financial services firm Simonis Storm.
Private Sector Credit Extension (PSCE) slowed to 4.5% year on year in November, down from 4.7% in October.
The moderation reflects softer borrowing by both companies and households following liquidity effects linked to the Eurobond redemption.
Despite the slowdown, PSCE remains well above the weak levels recorded in 2023 and early 2024, pointing to improved credit conditions rather than a downturn.
Simonis Storm expects PSCE growth to stabilise in the 4.5% to 5.0% year-on-year range toward the end of 2025 and into early 2026.
The firm said monetary conditions remain supportive, though becoming more neutral.
The Bank of Namibia (BoN) has kept the policy rate unchanged at 6.50%. Commercial banks reduced prime lending rates by a further 12.5 basis points in December, bringing total cuts for 2025 to 25 basis points. Inflation eased to 3.4% year on year in November, within the central bank’s 3% to 6% target range.
Simonis Storm said this leaves room for cautious easing and noted that a 25-basis-point rate cut is possible in the first quarter of 2026 if inflation stays contained and financial conditions remain stable.
Corporate credit continues to drive overall growth. Corporate borrowing slowed to 7.2% year-on-year, but demand remains investment focused.
Growth in instalment and leasing credit points to continued spending on vehicles, machinery and productive assets across agriculture, mining, manufacturing and logistics. Slower growth in overdrafts and short-term facilities reflects better cash-flow management rather than weaker investment demand.
Household credit recovery remains slow. Household borrowing eased to 2.5% year-on-year, constrained by affordability pressures, modest wage growth and high living costs. Mortgage lending continues to decline, while borrowing is increasingly concentrated in asset-linked categories such as vehicles, suggesting ongoing balance-sheet repair by households.
On liquidity, Simonis Storm said November marked the start of post-Eurobond normalisation.
Banking sector cash balances rose to N$5.4 billion. International reserves increased slightly to N$49.2 billion, equal to 3.2 months of import cover.
The financial research firm said this shows that the liquidity tightening seen in October was temporary and linked to specific events, not systemic stress.
Simonis Storm said the November data point to a stable but measured credit and monetary environment.
PSCE growth is expected to remain moderate, inflation is likely to stay within target, and the post-Eurobond adjustment is progressing in an orderly way, supporting external stability and policy credibility.
Caption
Simonis Storm expects private sector credit extension to stabilise in the 4.5% to 5.0% year-on-year range into year-end and early 2026.
- Photo: Contributed
