WINDHOEK – The Minister of Finance yesterday presented a budget that will certainly bring another smile to the faces of civil servants, while also appeasing a republic that is highly displeased with the yield of the current education system, as well as the pace of service delivery by the public health sector.
The budget does have something too for the critics of poor performing state-owned enterprises (SOEs) that keep extending the begging bowls to the Treasury for bailouts and thus ballooning public debt levels. Among the new fiscal stance is for SOEs to borrow money from the market using their balance sheets, albeit with an arms-length assistance of government guarantees.
The total expenditure outlay of N$60.28 billion presented to Parliament by Saara Kuugongelwa-Amadhila, the Minister of Finance, reflects a 29.1 percent increase in operational expenditure that now stands at N$48 billion.
Part of the increase is to pay civil servants their salary increases agreed with trade unions in the previous years and to make salary adjustments according to the new job evaluation and re-grading, which civil servants have patiently awaited for the past years. The development budget increased 17.6 percent to N$9.58 billion.
Education received the largest chunk, N$13.1 billion, nearly 30 percent of the entire budget for this financial year alone, and N$42.10 billion for the three-year financial period ending 2016/17.
The money is to “fund the development and upgrading of education facilities, provision of teacher accommodation, [procure] learning materials, recruit qualified teachers, and support institutions of higher learning including vocational training, as well as providing financial assistance to students.”
Health received N$6.01 billion for this year and N$18.9 billion for the next three years “to address the development and upgrading of health facilities across the country, acquire health equipment and supplies as well as recruit and train medical personnel.”
Although the budget does not increase old age grants, it does provide resources for rollout of the grants across the country. It also increases the grants of orphans and vulnerable children to N$250.
The projected revenues for the financial year are N$52.47 billion, and averages at N$59.08 billion during the three-year rolling budget until the 2016/17 financial year.
Yet even though the custom receipts from the Southern African Customs Union (SACU) are estimated to inject N$18.12 billion, the minister still repeated the risks of relying on SACU for revenue, given the ongoing reform of the formula to share the money among SACU member states.
“While domestic revenues will contribute significantly to the expected revenue, a significant risk to the outlook derives from uncertainty regarding future SACU revenues due to ongoing reforms,” said the minister.
The budget presents the Treasury’s re-aligned approach to the management of the country’s funds accompanied by new and strengthened fiscal policies, all which are hoped will entice an increased participation of the private sector in the creation of jobs and economic growth.
“Increased support for private sector and industrialisation through expanded access to development finance and targeted incentives [shall be added],” the minister said.
As for the SOEs, the minister said the diversified funding sources would be harnessed to mitigate the impact on public debt.
Thus SOEs “with strong balance sheet will continue to be encouraged to raise capital in the market through commitment of sovereign guarantees.” The finalisation of the public private partnership framework would be finalised this year.
By Desie Heita