Before the finance minister's announcement the government had seemed well on track with arrangements to finance its expected N$10.1bn borrowing requirement for 2011/12, which will also now go up. Its original financing plan, set out in the budget (April 2011, Economic policy), was amended in early April to widen the range of domestic borrowing instruments and substantially increase foreign borrowing. The debt to be raised as short-term Treasury bills and internal registered stock (IRS; longer-dated bonds) has been cut by one-third from N$9.3bn to N$6.2bn, with planned IRS issues scaled back by almost half. IJG Securities, Namibia's leading firm of stockbrokers, commented that the government had recognised that its initial plan did not "properly consider market dynamics", which became clear only after consultations with local financial institutions involved in funding government debt.

The revised borrowing plan, jointly drafted by the central bank and the Ministry of Finance, has been broadly welcomed by local investors. IJG had previously warned that the large amounts to be raised through IRS issues could lead to higher borrowing costs and a crowding-out effect on domestic financial markets. Out of total domestic borrowing of N$7.3bn, the biggest share (47%) will now be raised via T-bills, and N$1.1bn through three new bond types: inflation-linked bonds, retail bonds and bonds listed on the Johannesburg Stock Exchange. The inflation-linked bonds are targeted at institutional investors, but the government hopes that the retail bonds will attract savings by individual investors. Foreign borrowing will more than treble to N$2.7bn; as well as foreign loans, N$2bn will be raised by Namibia's first-ever Eurobond issues.

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