THE decision to celebrate their over N$700 million dividend, sucked from the terminally overstretched consumer, and the institutional failure that is the Bank of Namibia exposed not only rampant regulatory negligence but also a profound moral crisis in Namibia’s economic governance.
Its failure to regulate the banks effectively, as well as engineering a suffocating squeeze on the Namibian bank account holder through sky-high interest rates, is being spun as some kind of achievement that shows how unburdened by reality they are.
President Netumbo Nandi-Ndaitwah’s poignant assertion that we are too few to be [this] poor encapsulates the tragic irony: a geographically massive area with a small population in a relatively resource-rich country with functioning infrastructure and a stable political climate but struggles with rampant unemployment and pervasive hunger.
But BoN’s lack of ideological imagination and professional dexterity have led to their failure to regulate financial institutions, which enabled a perverse reality where banks thrive on the backs of a consistently shrinking and overburdened working class.
BoN enriches shareholders and inflates their coffers while almost half of Namibians live in multidimensional poverty.
At only roughly 500 000 in the workforce, severely outnumbered by dependents, Namibian bank account holders helped banks to collect revenue of N$14.5 billion in 2024, an increase of N$1.7 billion from 2023, and N$8.7 billion of that came from net interest on loans.
In 2024, Bank Windhoek reported a profit after tax of N$710 million, FNB made N$926 million profit, while Standard Bank Namibia recorded just over N$1 billion profit after tax.
Such high figures underscore a system rigged to prioritise shareholder returns over public welfare.
These profits are not abstract triumphs of financial acumen; they are extracted directly from Namibians already burdened by high living costs and stagnant wages. Inflation burns through the Namibian dollar daily.
The banks, never willing to properly address societal challenges, have a tendency to pay lip service to empowerment. Starting with their country executives, who are merely picked as a local face but have very little power or ability to improve things for staff, clients and the wider Namibian public.
With interest rates hovering at punitive levels, banks have turned basic financial services like home loans, transactional fees and credit facilities into instruments of excessive wealth extraction. New Era reported in 2023 that the average home loan interest rate in 2021 was 8.5%, and it rose to 11.75% in 2023. For a house valued at N$1.2 million, the monthly repayments have increased by more than N$2 590 per month during that time.
Last year, the Electricity Control Board (ECB) approved an 8% increase in the NamPower bulk electricity tariffs, and the power utility is seeking a new increase of around 17% for 2025. The average Namibian consumer’s financial status is in a critical state.
Of course, banks are businesses. They exist to make money to ensure greater profit margins, but would a doctor allow a regular blood donor to have blood extracted from them while they are in ICU?
To compound matters, the value of our currency is being eroded at a rate that further hampers the buying power of salaries already struggling to keep pace and that are being kept artificially low by unscrupulous employers, including banks, who continue to exploit an extraordinarily high unemployment rate in the country.
As a small open economy that is vulnerable to shocks and our historic ties to South Africa mean many of our decisions are made for us in Pretoria. But strangely, through the few decisions we could make for ourselves, we consciously decided to punish the already abused taxpayer. They’ve also woefully failed to make online earnings for digital creatives a reality while, for the longest time, ignoring the cryptocurrency boom.
These glaring failures further bring into question the motive and agency of a monetary policy committee and the ability or willingness of the wider banking community to act in the interest of the Namibian people.
These ‘executives’ inevitably pivot to South African decisions and have proven their inability to come up with innovative workable ideas despite their hefty pay packages. Their only idea is to drain the taxpayer and trouser their bonuses?
And not just any taxpayer but those who already earn the least and pay some of the highest proportional taxes.
BoN is now leading the establishment of a joint committee to investigate and set allowable interest rates, as the new Banking Institutions Act allows a legal framework for the regulation of banking fees and charges. Investigations and a new aggressive regime towards fees should be obvious but how will the system reimburse those who struggled and buckled under Johannes !Gawaxab’s repo rate jamboree from 2022?
And would !Gawaxab make decisions that will impact negatively on his own business interests? Remember, he was fined a million dollars by the Namibia Competition Commission (NaCC) for not properly disposing of his businesses when he got the BoN job.
The NaCC also found that commercial banks and the Payment Association of Namibia (PAN) were setting debit and credit card transaction fees in concert, a practice deemed anti-competitive and prohibited by law.
The Parliamentary Standing Committee on Economics and Public Administration further wants investigations into commercial banks’ alleged racial and class discrimination and unfair credit rating practices. The banks are not honest brokers, and there must be some kind of redress, especially for struggling homeowners.
This level of obscene profit-making cannot continue. There is a need for major disruption in every section of the finance sector, starting with the regulatory institutions.
The world is changing, and we can’t continue worshipping at the altar of a system that does not represent the larger restorative needs of Namibians.
Our reality is different from those who can bring economic theory to a discussion about people’s suffering. We should be able to build ourselves out of trouble to overcome a serious housing need, further expand our road network, improve rail access for both passengers and freight and drastically increase renewable energy generation for both household and commercial use.
There is no need to bow to the whims and scruples of the fickle foreign investor, whom we seem to relentlessly chase after with little success. Instead, empower Namibians to invest in the country’s economy.
But ‘woe unto you, oh Namibian’ seems to be BoN’s slogan. I’m not saying it. Their record shows it.
When even those in work, including bank employees, cannot make a dignified living or afford decent housing, BoN’s reaction is an abdication of duty and a perilous pivot to profit. At all costs? These eye-watering profits were announced as the Parliamentary Standing Committee on Economics and Public Administration’s recent report reveals how the BoN has allowed the banks to run riot.
The parliamentary committee said bank charges are largely set at the discretion of financial institutions, often based on credit history, with little in the way of checks and balances to avoid racial or tribal prejudice.
The committee recommended that the ministry of finance establish clear regulations to oversee the setting of bank charges, ensuring that commercial banks operate fairly and transparently. Without effective oversight, unfair banking practices will continue to disadvantage consumers, necessitating urgent regulatory intervention.
Despite mandates under the Banking Institutions Act and Payment Management System Act, neither the BoN nor the finance ministry have established clear limits on bank charges, allowing commercial banks to unilaterally set fees and interest rates at their discretion. This laissez-faire approach has transformed banks into profit juggernauts.
Human cost of ‘resilient’ banking
BoN governor !Gawaxab’s pride in the banking sector’s “resilience” and “stability” rings hollow against the backdrop of Namibia’s socio-economic realities. While BoN touts its success in curbing inflation to 4.2%, this achievement means little to households paying exorbitant bank charges on top of rising food and fuel prices.
The central bank’s N$720 million dividend to the government – a “historic high” – exemplifies this disconnect. Where does this dividend originate if not from the same profits gouged from citizens through unregulated fees and interest margins?
Namibia’s banking sector is a microcosm of global neoliberal excess, where profit is privatised and risk is socialised. The BoN’s regulatory failure is not merely administrative complacency; it is a betrayal of Namibia’s most vulnerable. President Nandi-Ndaitwah’s call “too few to be this poor” must catalyse systemic change.
Ignoring the cries and frustrations of the ordinary people and their interests, against that of the elite and big businesses, could be politically perilous for those who appoint the BoN governor.
The parliamentary committee’s recommendations, including clear regulations on bank charges and anti-discrimination measures, are critical first steps. But true reform demands a reorientation of priorities: from profit-driven extraction to equitable development.
Maybe those in charge of imagining ourselves out of failed neoliberal policies that favour business over the economically brutalised worker shouldn’t be prophets of trickledown oblivion. With banks making record profits while not even employing enough personnel to clear basic levels of business efficiency, it effectively shows that they should be more aggressively regulated in the interest of the people.
We should not allow anyone with a profit motive anywhere near the BoN again. Donald Trump’s ham handed reengineering of the way the world works gives us an opportunity to reorganise ourselves out of this dire situation.
Building houses and schools, rethinking how bonds are financed, finding smart ways to help first-time buyers, and aggressively helping local authorities and organisations like the Shack Dwellers Federation to help those without office jobs to also acquire dignified housing should be foremost in the minds of those entrusted with NNN’s turnaround idea.
Namibian banks must be compelled to serve the people, not prey on them. Until then, the spectacle of banks celebrating record profits will remain a shameful testament to a regulatory institution that should undergo a robust transformation.
In a country so small but relatively wealthy, a dignified living for its citizens should be inevitable. Namibia should not be a playground for financial elites but a country where dignity and shared prosperity prevail.
Celebrating the suffering of Namibians should be discouraged at all costs.
