‘We are at a crossroad,’ says Schlettwein
By Hilary Mare
IN fiscal and economic terms, government is at a pivotal moment and faces serious challenges in mobilising the financial resources needed to provide adequate and quality public services to Namibians, Finance Minister Calle Schlettwein has said subsequent to his mid-term budget review presented to parliament on Tuesday afternoon.
Schlettwein explained that government has no room left for increased borrowing due to the depressed domestic market and limited potential for increased domestic revenues.
“With continued uncertainty over the economic situation in South Africa, we can expect [South African Customs Union] revenues to be volatile over the short and medium terms,” he added.
However, Schlettwein believes that if government stays on the path of fiscal consolidation whilst protecting public investments in key socio-economic activities, then Namibia will ultimately see benefits.
“If we are not disciplined and consistent in our policy stance then we risk losing out on the gains we have made and will make. Time is not on our side and I would urge all of you to help the government to reboot the economy and do this in a spirit of openness and frankness.
“We need to listen to all Namibians as the solutions are not solely the prerogative of government policy makers,” Schlettwein told delegates at a post-budget review meeting in Windhoek this week.
Acknowledging that these past few years have not been easy in terms of the economic standing of Namibia, the minister noted that government remained committed to its policy of fiscal consolidation and sustainability by doing what is necessary to encourage economic recovery, economic growth, job creation and reducing the stubbornly high-level of income inequality in Namibia.
“It is however, unrealistic to expect that the government alone can help Namibia emerge from its current economic situation. We have come from a culture where in times of trouble the default position has been to look to the government for solutions.
“This culture has to change and, we would encourage mutually beneficial partnerships between the government and the private sector to build a better Namibia for all. We need your support in these testing and challenging times.”
In the budget review Schlettwein noted that government managed to free up about N$1.8 billion through expenditure cuts with the wage bill contributing N$176 million in savings and the development budget ploughing in close to N$1 billion.
For the Operational Budget, internal savings were realized from personnel emoluments via wage bill management and vacancy freeze measures. For the Development Budget, freed-up resources were realized from capital projects with a slow implementation pace or yet to be implemented.
Out of the N$1.18 billion saved, N$632.1 million was from the Votes’ Budgets with identified priorities for funding. About N$545 million will be allocated to ministries, offices and agencies experiencing urgent funding needs for the delivery of essential goods and services.
These include the Electoral Commission of Namibia, the Safety and Security Ministry, the Basic Education Ministry, the Health Ministry and the Namibian Broadcasting Corporation.
Schlettwein also noted that the proposed internal reallocation to funding needs and priorities, including internal reallocations, were that an amount of N$96.65 million be allocated to the Ministry of Agriculture Water and Forestry for personnel expenditure, utilities and dry-land crop production.
An amount of N$ 67.33 million is allocated to the Drought Relief Programme under the Office of the Prime Minister, while N$88 million is allocated to the Orphans and Vulnerable Children programme in the Ministry of Gender Equality and Child Welfare to cater for expanded coverage.
N$36 million is allocated to the Ministry of Home Affairs and Immigration for the Visa Stickers project.
A further N$184.1 million is allocated to the Ministry of Education for the recruitment of teachers, text books and the school feeding programme.
Health and Social Services received N$210.72 million for pharmaceuticals and clinical suppliers, as well as recruitment of health professionals. N$88 million was allocated to the Ministry of Poverty Eradication for Social Grants.
In an environment where Namibia is faced with a general economic contraction with a prolonged recession affecting specific economic sectors such as construction, agriculture, wholesale and retail trade, about N$29.4 billion in revenue was collected for the first half of the year, which is about 50 percent of the budgeted revenue of N$58.4 billion for 2019/20.