Last week’s decision by Moody’s to downgrade Namibia’s international credit rating position to sub-investment grade or junk status will have no repayment impact on the Eurobond listed on the Johannesburg Securities Exchange or the N$3 billion loan from the African Development Bank,
central bank Deputy Governor, Ebson Uanguta, told the Windhoek Observer this week.
“We don’t see any impact with the existing bonds, but if we are to do additional borrowing from the international markets, of course, the premiums and the terms will be different. But with the existing one, the terms will not change,” he said.
In a separate interview, a senior ministry of finance official denied that Government was in talks with S&P Rating Agency for a more favourable rating.
This follows information from a source, who works close with the treasury, that the finance ministry had engaged S&P for a rating.
“Namibia subscribed to Fitch Credit Rating Agency in 2005 and, in addition, to Moody’s Investor Services in 2011. These are the two international rating agencies for Namibia. The Namibian Government has not, and is not in search for a third or alternative rating agency nor does it intend to do so in the near future,” said Penda Ithindi, Senior Technical Economic Advisor to the minister of finance.
“Namibia’s subscription to international creditworthiness rating is not done in speculative search for favourable rating. It is done as a commitment to fiscal transparency, responsible public finance management and in pursuit of market diversification objectives. The Government is not in search for other ratings entities,” Ithindi added.
Commenting on the economic outlook after the downgrade, Uanguta said the central bank was forecasting inflation to average 6,2 percent and GDP growth at two percent in 2017.
“We have just received data for the last six months. We will reserve our growth forecast. We don’t know whether it will go up or down,” Uanguta said.
“We have to put the numbers together for us to know exactly what the new projections for 2017 will be.”