Bank of Namibia rectifies records

By Uaueza Kanguatjivi

Deloitte and Grand Namibia auditors says Bank of Namibia (BoN) incorrectly recorded N$4.7b from IMF (International Monetary Fund) as external debt, which was then on lent as a domestic loan to the government.

The IMF approved financial assistance to Namibia of a Rapid Financing Instrument (RFI) of N$4 733 326 233 in March 2021. The IMF provided the funds for direct budget financing to the government.

The auditors said BoN’s role was to facilitate payment as part of its statutory obligation in terms of the Bank Act No. 1 of 2020.

In addition, BoN was also supposed to provide the government with depository services and fiscal agencies.

According to the auditors, the government issued the IMF a non-negotiable, non-interest-bearing promissory note in Namibia dollars to absolve BoN from any performance obligation towards repayment of the principal, interest, and any other cost.

“BoN incorrectly recorded the RFI loan debt as an external debt of the Bank, which was then on lent, as a domestic loan, to the government.

“An IMF RFI asset was recognised, and a corresponding and equal liability was recognised in the books of the Bank, at initial recognition and included in other receivables and deposits,” the auditors noted.

The auditors added that this error only affects the 2021 financial year since IMF issued the instrument during 2021.

Furthermore, the auditors said the error had no impact on the statement of profit or loss and other comprehensive income or statements of changes in equity.

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