The Impact of High and Growing Government External Debt on Economic Growth of Namibia

The thrust of this study was to investigate and analyses the impact of high and growing government external debt on the economic growth of Namibia by using secondary data from Bank of Namibia, IMF and World Bank. Over the first five years the country went through one of the longest and largest boom periods, thereafter the bottom fell out, and it’s now clear with the strongest and most sustained growth levels seen since independence, thereafter the bottom fell out, and as is now clear, much of this growth was driven by debt, both public and private. This result indicates that for Namibia, external borrowing has had an influence on the country’s Gross Domestic Product (GDP). In this regard, effective debt management policies and strategies aimed at reducing the cost and risks associated with external debt are a must for ensuring a sustainable path of external debt to promote economic growth.