• September 22nd, 2018
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Schlettwein redirects billions to urgent priorities


Windhoek Government has identified a total of N$4 billion of internal savings for the 2015/16 financial during the Mid-Year Budget Review process. These funds will now be relocated to urgent priorities without increasing overall budget expenditure and without increasing the overall 2015/16 financial year budget ceiling. During yesterday’s Mid-Year Budget Review, the Minister of Finance Calle Schlettwein said internal reallocation totalling about N$775.3 million and N$218.9 million are apportioned to cater for the salary adjustments and bush allowances respectively, in accordance with the agreement reached between the government and labour unions. Additionally, some of the spending adjustments made for the Ministry of Health and Social Services have been reallocated to scale up allocations for the purchase of anti-retroviral drugs and other pharmaceuticals to supplement current budgetary provisions. “The Appropriation Amendment Bill (Mid-Year Budget) which I am tabling today proposes a redeployment of funds identified within budget votes for reallocation to various priority programmes within and across the budget votes, without increasing overall expenditure and therefore without increasing the overall budget ceiling. It is, thus, not an additional budget. It is a measure intended to enhance optimum delivery of services, resource allocation efficiency and meet priority commitments of the day,” said Schlettwein. On the balance, net savings after internal reallocations will enable the government to scale up resource allocation to urgent priorities. These urgent priorities include the Ministry of Agriculture, Water and Forestry, which will receive N$458 million to fast-track completion of the Neckartal Dam, which will unlock irrigation activities. A further N$210 million is allocated to combat foot-and-mouth disease in the northern parts of the country, while N$531 million is allocated to the Drought Relief Programme under the Office of the Prime Minister. Furthermore, N$121 million is assigned to the Land Serving Programme in identified pilot towns, while N$166 million is allocated to the settlement of mass housing contracts under the Ministry of Urban and Rural Development. Also, N$500 million is set aside for anti-retroviral drugs and pharmaceuticals, and N$291 million is allotted to TransNamib for the lease of locomotives to improve efficiency of cargo services and rail transport, while N$495 million is assigned for anti-poaching activities. According to Schlettwein, the total expenditure execution rate for the 2014/15 financial year amounted to 97.6 percent of the N$60.20 billion budget. The operational expenditure execution rate, including interest payments stood at 98.9 percent, while the Development Budget execution rate was 95.4 percent of the net budget allocation. Schlettwein added that for the current financial year the total expenditure execution rate by the mid-year mark amounted to N$24.69 billion, or some 36.8 percent, compared to a 46.5 percent execution rate in the previous corresponding period. The finance minister warned that this execution, while in part is subject to ongoing data reconciliation, suggests a rather slow budget implementation rate. “The consolidation programme, which government is undertaking, is not just for its own sake. It aims to strike a balance between reinforcing fiscal sustainability and supporting economic growth and social development objectives. We know too well that if we do not grow the economy, we will not be able to grow revenue. Without revenue growth, there is no room for expenditure expansion to address development needs. Hence the culture of doing more with less, and affordability and stringent prioritization are expected to be the norm rather than an exception during the next Medium Term Expenditure Framework (MTEF),” noted Schlettwein. He continued that strengthening the macro-fiscal frameworks and rebuilding the fiscal space is important to enhance investment credit ratings strength, creditworthiness and national competitiveness as an attractive destination for investment. Schlettwein further identified four key macro-critical issues which require immediate policy attention now and over the next MTEF. These are structural challenges of eradicating poverty, unemployment and inequality through targeted developmental intervention measures; the declining public revenue due to contractions in receipts from the Southern African Customs Union (SACU) and downward adjustments in domestic revenue outlook; the widening twin deficits regarding the government budget deficit and the current account deficit as well as the associated weakening of the external trade position driven by the strong historical expansionary budget and high imports growth over exports; and the declining stock of international reserves, which is a consequence of a negative trade balances. Schlettwein added that the government would achieve fiscal consolidation in the next budget and over the MTEF by implementing spending cuts of 42 percent on the indicative allocations to non-core and least priority recurrent expenditure items.
2015-11-04 09:19:16 2 years ago
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