2024 saw a peak in money market rates early on, as cooling inflation prompted central banks to lower short-term interest rates weighing on fund returns. We expect inflation to continue trending lower through mid-year, pushing interest rates down.

That said, the quick rebound in emerging-market inflation - especially in South Africa - may curb the extent of rate cuts. Meanwhile, South African capital markets rallied following the formation of the 'GNU,' bolstered by election-year optimism. With inflation subdued, bond investing conditions look favourable.

Still 2025 promises fiscal challenges for both Namibia and South Africa: municipalities and state-owned enterprises face ongoing strains that could demand further bailouts. Namibia’s looming Eurobond, GC25, and GI25 maturities may also require additional funds from the local market, placing upward pressure on credit spreads.