Windhoek
The recently unveiled 2016/17 National Budget was the second full budget to be presented by the 6th Government of the Republic of Namibia, led by Dr Hage Geingob. This budget was preceded by high expectations of critical economic and social policy reforms.
The global and regional economic environment has continued to deteriorate since the beginning of 2015, characterised by low commodity prices, weak global demand and volatile exchange rates which all present a special challenge to policy makers. Growth is expected to moderate in the coming two years as the economies battle dual headwinds of low global demand and prices for its key commodities exports.
Although Namibia has been fortunately less affected than some other countries around the world, we believe the Honourable Finance Minister has had a challenging time compiling this year’s budget in view of the impact of the slow global growth.
The Namibian mining sector broadly remains positive – however the low prices of key commodities will have implications for investment in the sector. Contraction in the agriculture sector (livestock farming and crop farming) is expected to strain growth further.
The current budget once again emphasises the importance of government in the economy. Therefore with the numerous social and infrastructure initiatives planned, government expenditure would continue to be the key demand driver in the coming year. We would like to see a focused, timely and efficient delivery of signature infrastructure projects in key sectors such as energy, water and roads, which is a pre-requisite to sustainable and enhanced economic growth.
Government is expected to continue supporting growth – as has been the case over the past five years, although its support is expected to lose steam during the next Medium Term Expenditure Framework (MTEF), given the expected fiscal constraints.
The uncertainties and risks presented by the global, regional and local economies should not deter us from looking at the opportunities presented by the budget. As business leaders and entrepreneurs, it is important that we decipher the future and continue to invest and pursue opportunities that will provide sustainable returns. It is our job to pursue investments and returns in the midst of all these uncertainties.
Lastly I would like to congratulate the Honourable Finance Minister for delivering a budget that is balanced and responsive to the needs of the economy, while at the same time providing an opportunity for us to engage him and his team on the rationale and key thinking underpinning the budget preparation.
•This opinion piece on the National Budget was compiled by Standard Bank’s Chief Executive Vetumbuavi Mungunda at the recently held Namibia Budget Review.