WINDHOEK – It is estimated that government will require about N$223.5 billion over the next four years to finance infrastructure projects in Namibia.
According to the Director of Research and Chief Economist at the Bank of Namibia, Florette Nakusera, this figure is broken down into N$17.9 billion for roads, N$60.9 billion for railways, N$34.9 billion for ports, N$9.7 billion for airports, N$50.8 billion for energy and N$45 billion for housing.
Speaking at the Bank of Namibia’s 16th Annual Symposium, which took place in Windhoek yesterday under the theme “Financing of Infrastructure for Sustainable Development in Namibia”, Nakusera said available funding for infrastructure during the next four years adds up to about N$73.5 billion, leaving a shortfall that needs to be financed through alternative sources of about N$150 billion.
Speaking on behalf of the Director General of the National Planning Commission (NPC), Tom Alweendo, the Permanent Secretary in the NPC, Leevi Hungamo, said: “The importance of infrastructure in support of economic growth has long been recognized. However, the provision of infrastructure services to meet the demand of businesses, households and other users, is one of the major challenges of economic development.” He added that the failure to invest in infrastructure determines the future development of a particular country or region, thus infrastructure is an important term in judging a country or a region’s development.
Hungamo further noted that a huge gap exists in the world between required infrastructure and the existing infrastructure. He mentioned that statistics on the global level shows that an estimated 1.1 billion people live without safe drinking water, 1.6 billion live without electricity, 2.4 billion do not have proper sanitation and more than 1 billion are without access to an all-weather road or telephone services. According to Namibia’s 2011 Housing and Population Census, 20 percent of Namibian households do not have access to safe drinking water, about 70 percent of households have no access to electricity for cooking and 60 percent of households have no access to proper sanitation.
“There is a huge discrepancy in accessing these services across regions and between rural and urban areas and the gap is more pronounced in sub-Saharan Africa and Asia. Therefore, the key to African renaissance is in the development of extensive, adequate and quality infrastructure,” remarked Hungamo.
During his welcoming remarks at the annual symposium, Bank of Namibia Governor, Ipumbu Shiimi, noted that Namibia generally has a good core physical infrastructure relative to other sub-Saharan African countries.
“Despite vast geographical size, Namibia has managed relatively well to develop good transport networks, electricity distribution lines, water and telecommunications across the country. However, more investment in infrastructure is still needed if Namibia is to achieve higher and sustained growth and achieve Vision 2030,” remarked Shiimi.
The Bank of Namibia Governor continued that there is now a greater need to revamp key existing infrastructure and to build new infrastructure as the existing ones have reached the end of their lifecycle. Priority infrastructure includes new roads, deepening and modernizing port facilities, houses and upgrading of power generation capacities.
Shiimi explained that since independence, government has consistently invested in various development projects of an infrastructural nature. “Financing of these projects was mainly done, directly and indirectly, through the annual budgetary allocations, which was funded with the income collected from taxes and debt. Of late, state-owned enterprises were encouraged to raise funds on the capital markets, either through their own balance sheets or backed by government guarantees, and more recently to engage in public-private partnerships,” said Shiimi.
In Namibia, the national budget is the main source of infrastructure financing among government financing initiatives.
Government’s capital expenditure since independence until 2009 has been less than 6 percent of gross domestic product (GDP), which is contrary to the first National Development Plan’s (NDP1) pronouncement to have capital spending 6 percent of GDP.
The average spending for 2010 to 2012 was about 6 percent and this was attributed partly to the implementation of the Targeted Intervention Programme for Employment and Economic Growth (Tipeeg).