Windhoek
As Finance Minister Calle Schlettwein gears up to kick-start the mid-term budget review process next week, there will be a significant amount of money reallocated to ministries dealing with priority areas such as poverty, housing and water.
MPs earlier this year passed an expenditure outlay of N$67.08 billion for the 2015/16 financial year, equating to 40.8 percent of Gross Domestic Product (GDP), which represents a seven percent nominal increase over the past year.
“I think the most likely thing we will not see is a huge reduction when it comes to spending, but rather a reallocation of funding, with money most likely to be shifted away from non-priority to priority areas,” said the head of research at IJG Securities, Rowland Brown.
Brown said there would also be a number of proposals about alternative funding sources for government, such as the solidarity tax and new financial regulations. “We might see a decrease when it comes to expenditure, maybe by N$1 billion or N$2 billion, but there will definitely be moving around of expenditure,” said the analyst.
According to the National Assembly’s order paper for next Tuesday, Schlettwein will introduce a Bill to amend the amounts of money allocated to meet the financial requirements of ministries during the remainder of the financial year.
Schlettwein earlier this year said the mid-term review is meant to improve the quality of spending by identifying internal savings in the current fiscal year and reallocating a significant part of the savings to other priority programmes.
“The review would also allow government to align its expenditure priorities to the updated macroeconomic and revenue outlook, as well as to afford the legislature the opportunity to interrogate the budget policy and expenditure priorities,” he said.
The Ministry of Poverty Eradication and Social Welfare is one of the ministries that received the lowest allocation, but governmental efforts to fight poverty and plans to construct food banks strongly suggest that the ministry could receive additional cash from Treasury.
The newly formed poverty ministry received N$2.7 billion for the 2015-16 financial year, but many expect that figure to be increased, because of government’s recent drive to push back the frontiers of poverty.
Another ministry that could see its budget increased is the land reform ministry, which received just over N$1 billion in the budget approved in March, but with government’s recent push to service 200 000 plots through the Mass Urban Land Servicing Project, more funds are expected to be channeled to the lands ministry.
Sophia Shaningwa’s Urban and Rural Development Ministry could also see its N$3.1 billion allocation being increased to continue the construction of houses at a faster pace, in order to overcome the housing backlog, which is currently estimated at over 120 000.
With a possible water crisis looming as the water reservoirs are running low, it remains to be seen if the Ministry of Agriculture, Water and Forestry’s N$2.4 billion allocation will be increased to allow for more investment in the water sector.
President Hage Geingob earlier this year appointed the former chief executive officer of the Millennium Challenge Account Namibia, Penny Akwenye, as his policy advisor on implementation and monitoring.
Her appointment comes at a time when government continues to decry the low implementation rate of capital projects aimed at alleviating poverty through employment creation and infrastructure projects countrywide.
Concerns are, however, rife when it comes to the public sector wage bill, which passed the N$22 billion mark, partly because of the bloated executive.
Schlettwein is thus also expected to announce measures devised by government to contain the ever-escalating public wage bill.
After the budget was passed in March, economic analysts were generally pleased with the allocations at the time, while politicians – as usual – were not impressed by the massive allocation to the defence ministry.
The general consensus, though, was that the budgetary allocations to the various ministries could improve service delivery and hence, the lives of all Namibians – if implemented according to plan.