Asymmetric fiscal-stability and debt-sustainability responses to uranium price shocks in Namibia: evidence from a NARDL analysis

This study examines whether uranium-price increases and decreases are asymmetrically associated with Namibia’s fiscal stability and debt sustainability during 1990–2024. It addresses a gap in commodity-fiscal research, which has focused mainly on oil and broad mineral-price indices while giving limited attention to uranium as a critical transition mineral. A nonlinear autoregressive distributed lag (NARDL) model decomposes real uranium prices into positive and negative partial sums and estimates separate fiscal responses for mining-revenue dependence, the overall fiscal balance (OFB) and the public debt-to-GDP ratio. The results show long-run cointegration and statistically significant asymmetry: negative uranium-price shocks are associated with larger and more persistent fiscal deterioration than comparable positive shocks are associated with fiscal improvement. Table 8(A) reports the model-implied magnitudes: a 10% fall in real uranium prices is associated with a 4.9% long-run decline in the mining-revenue-share elasticity effect, a 3.4 percentage-point deterioration in the fiscal balance and a 4.2% debt-ratio elasticity effect. These estimates are interpreted as conditional long-run associations and predictive fiscal responses, not structural causal effects. The policy implication is that Namibia should manage uranium revenue through conservative price assumptions, a transparent mineral-revenue stabilisation mechanism, debt-risk buffers and medium-term expenditure ceilings that recognise stronger downside than upside fiscal pass-through.