The International Monetary Fund has approved Namibia's N$3.9 billion (US$270.83 million) loan to address the country's fiscal financing needs caused by the COVID-19 pandemic. This amount is marginally less than its so-called IMF Quota Subscription which stands at N$4.717 billion.
The Ministry of Finance applied for the loan in May 2020 through the Rapid Financing Instrument that was made available by IMF to middle-income countries.
The instrument provides rapid financial assistance to all IMF member countries facing financial headwinds and Balance of Payment challenges.
The Ministry's spokesperson, Tonateni Shidhudhu, said the Covid-19 pandemic and its fallout have created a situation where Namibia's fiscal deficit is widening substantially at the same time that the country's receipts from exports of goods and services are contracting with consequent potential pressures on the external accounts.
"The funds will provide needed financing to respond to the COVID-19 health emergency, including the purchase of vaccines and deployment of the vaccination campaign, needed to mitigate the severe socio-economic impact of the pandemic," he said.
According to the Ministry of Finance, this is the first time that Namibia is taking a loan from this institution. The repayment period of the loan is 5 years at the interest rate of 1.1%.
So far about 85 countries in the world have benefited from IMF financial relief for COVID-19.
The IMF loan comes two weeks after the African Development Bank approved a N$1.5 billion loan to support Namibia's governance and economic recovery plans.