Fitch revises Namibia view to negative

Fitch Ratings said it revised Namibia's outlooks to negative from stable and affirmed the long-term foreign and local currency issuer default ratings at BBB-.

The issue ratings on Namibia's senior unsecured foreign- and local-currency bonds were also affirmed at BBB-. The country ceiling was affirmed at BBB and the short-term foreign and local currency issuer default ratings at F3.

The agency also revised the outlook on Namibia's national rating on the South African scale to negative from stable and affirmed the long-term rating at AA+(zaf). The issue ratings on Namibia's bonds with a national rating were affirmed at AA+(zaf).

Fitch said Namibia's budget deficit widened sharply to 8.3% of GDP in fiscal year 2015/16 (FY15, which runs from April 2015), well above the government's 5% target and the worst on record. The deficit has worsened progressively from 0.1% in FY12 to 3.4% in FY13 and 6.4% in FY14, and is well above the BBB category median of 2.7%. The overshoot in the deficit in FY15 primarily reflected weaker-than-expected revenues from domestic sources, including company tax and lower-than-expected income tax, the agency explained.

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