WINDHOEK – The 2015/16 National Budget apportioned N$23.99 billion to the social sector, out of the N$67.08 billion expenditure for this financial year, a gesture meant to honour Minister of Finance Calle Schlettwein’s promise of “a well-balanced pro-poor, pro-growth and pro-social budget”.
In whole though, here is a budget in which Schlettwein gingerly juggles the need for real growth economic stimulus, care for the immediate and overwhelming social needs, while responding to a bulging government structure and inherent administrative costs, and at the same time limiting spending within the self-imposed targets on government debts and deficits.
As a result, Schlettwein did manage to maintain Namibia’s anathema for double-digit deficits and debts above 10 percent of revenue. The N$67.08 billion expenditures equal 40.8 percent of the Gross Domestic Product
(GDP) and present 7 percent nominal increase over the previous year’s expenditure. The revenue for the year is forecasted at N$58.7 billion, or 36.6 percent of the GDP. Budget deficit for the year is projected at 5.3 percent of GDP.
Treasury is estimating to spend N$3.87 billion this year alone in servicing government debts, which is some 6.6 percent of revenue, allaying earlier concerns by analysts that government could borrow heavily to meet required financial obligations.
The year would, however, see Treasury dish out billions worth of government sovereign guarantees for State-Owned Enterprises (SOEs) to source funding for mass housing, railway construction, energy development, as well as roads. Further, contingent liabilities are projected to increase to an average of 8.7 percent over the next three years, as government extends support to SOEs project financing on the strength of their balance sheets.
Schlettwein says this is all done with the aim of “tackling the structural challenges that affect the development potential of our economy, unlocking opportunities for jobs and wealth creation and improving the welfare of Namibians in an inclusive and sustainable manner”.
And perhaps much to the expectations of many, the gigantic allocation to social sector would see the National Youth Service receiving N$303.81 million for youth empowerment programme over the next three years. The health sector receives N$6.49 billion for this year alone to expand and improve the quality of health service delivery.
The Ministry of Basic Education, Arts and Culture received the largest chunk in the education sector, at N$11.32 billion and the Ministry of Higher Education, Training and Innovation received N$4 billion, money that is meant to strengthen the provision of free education and infrastructure in that sector.
Mass housing receives N$1.25 billion over the next three years, in addition to the government guarantees of N$2 billion that would be extended to allow the National Housing Enterprise to source funding from financial institutions.
Electricity utility company, NamPower, together with energy exploration company, Namcor, receive N$4.93 billion in their balance sheet for the next three years to enable them to purse Kudu Gas. In addition, government would also provide them with guarantees to source additional financing on their own.
For this year, the development budget increased to N$11.10 billion, a higher increase of 15.9 percent over last year’s allocation, and average around N$12.05 billion over the next three years.
Other additional funding for infrastructure development include N$3.27 billion budgeted over the next three years for roads projects, in addition to N$1.7 billion that the Road Fund Administration is to source on its own. The Treasury also availed N$945.84 million for railway projects, and N$7.75 billion to agriculture sector’s green schemes.
The running of the government too saw a 10.8 percent increase with the budget for administration now standing at N$8.16 billion for the year. An amount of N$499.24 million is allocated to the Contingency Provision for the budget year and N$1.10 billion over the MTEF to cater for unforeseen emergencies. An amount of N$334 million was allocated during 2014/15 and N$319.48 million was spent.
“It is a pro-poor, pro-growth budget, with deliberate scaled-up resource allocations to the targeted programmes for broad-based economic growth, job creation and poverty eradication over time,” Schlettwein says of the budget.