Namibia says it seeks to bring down the debt ratio down to 35 percent by improving the quality of spending and cutting down on non-essential spending.

Finance minister Calle Schlettwein said this Monday when he addressed a press conference, days after Moody’s Investors Services has downgraded Namibia’s long-term senior unsecured bond and issuer rating from Baa3 to Ba1 with a negative outlook on Aug. 11.

Moody’s cited the erosion of Namibia’s fiscal strength due to sizeable fiscal imbalances and an increasing debt burden and the rising total debts that rose to the current 42 percent of GDP.

The agency also cited the vulnerability to exchange rate risks, potential deterioration of SACU revenues as well as potentially higher than expected expenditure because of the upcoming Swapo congress end of this year and the next presidential elections scheduled for the end of 2019.

The minister said the government would align revenue to expenditure to the minimize the debt ratio at 42 percent, which is a threshold for small, medium income countries.

“In fact, we want to bring down that to a self-composed threshold of 35 percent by improving the quality of spending and cutting out and avoiding non-essential spending,” he said. Enditem

Source: Xinhua/