WINDHOEK, Namibia's President Hage Geingob says international rating agency Moody's should not have based its latest rating on the country on on the forthcoming ruling Swapo Party elective congress and the national elections scheduled for 2019.

Addressing a closed-door Swapo central committee meeting here over the weekend, he said the agency should not have linked the Swapo elective congress to what is happening in the country currently. Moody's should leave Swapo supporters to express themselves on issues of the party.

"We are also of the view that nothing material has changed since our last rating valuation and this should be relied upon to justify our rating. It is therefore not true to say that there will be an increase in spending in the run-up to the Swapo congress," he addd.

Swapo will hold its elective congress in December and already some members are jostling for positions.

On Friday, Moody's downgraded Namibia's credit rating from Baa3- to Ba1 but maintained the negative outlook. The rating agency said it downgraded Namibia's credit ratings because the country's fiscal strength had been eroded and there was a limited institutional capacity to respond to shocks as well as renewed risk of liquidity pressures.

The agency also noted that the public debt burden had risen rapidly over the past several years, from the low level of 26 per cent of gross domestric product (GDP) when the first assigned the rating in 2011 to the current 42 per cent.

"The high share of debt in foreign currency (other than rand) makes the fiscal position vulnerable to a further rapid deterioration in the event of an exchange rate shock, as was the case most recently in 2015," Moody's said.

It further noted that other sources of potential deterioration are unexpected shortfalls in the Southern African Customs Union (SACU) revenues relative to forecasts as well as expenditure over-runs in the context of upcoming ruling SWAPO leadership elections (end-2017) and presidential elections (2019).

Moody's also lowered Namibia's local currency bond and bank deposit ceilings to A2 from A1; the foreign currency bank deposit ceiling to Ba2 from Baa3; and the foreign-currency bond ceiling to Baa2 from A3.

Geingob said Moody's did not consider material factors that point towards an improvement of the country's fiscal position to justify the downgrade.

Finance Minister Calle Schlettwein said the agency based the downgrade on speculation. "While these ratings still reflect investment grade, we also do not think that domestic economic conditions warrant a downgrade at this point," he said.