Namibia: Financial System Stability Assessment

International Monetary Fund

No 2018/077, IMF Staff Country Reports from International Monetary Fund

Abstract: The paper assesses the stability of Namibia’s financial system. Macrofinancial vulnerabilities have built up over a period of rapid economic growth in Namibia, and the financial cycle has now turned down. The sovereign debt/GDP ratio has nearly doubled since 2014 which has reinforced the already strong bank-sovereign link. The rapid rise in housing prices and household debt, banks’ large exposure to mortgages, and banks reliance on wholesale funding are sources of concern. A major decline in real estate prices would adversely affect bank capital and profitability. Financial sector oversight has been strengthened significantly since the 2006 Financial System Assessment Program, but further upgrades are needed.

Keywords: ISCR; CR; Bank of Namibia and NAMFISA Acts; financial system; unit trust; bank assets; cars well; NPL ratio; bank capital; bank default; oversight action; markets Bill; market conduct issue; bank of Namibia; bank funding; Pension spending; Commercial banks; Nonbank financial institutions; Africa; Global (search for similar items in EconPapers)
Pages: 71
Date: 2018-03-15
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