WINDHOEK - Finance Minister Calle Schlettwein, faces the daunting task of presenting the Mid-Term Budget review in Parliament today for the N$66.5 billion national budget tabled in March. During the review, which looks at the performance analysis of the appropriated budget for the first six months of the financial year, the minister is expected to announce any changes in revenue or expenditure as well as any changes to these inputs during the Medium-Term Expenditure Framework (MTEF).
Schlettwein is also expected to provide a progress report on ongoing fiscal consolidation as the nation continues to grapple with low economic growth and high unemployment.
The mid-term budget provides an indication of projected spending for the remaining period in the current financial year, particularly in relation to excess spending.
Commenting on his expectations for today’s review, the Treasurer-General of the Popular Democratic Movement (PDM) Nico Smit said he found it strange that a significant amount of money has been allocated to capital projects but that he has not seen any projects started.
“We want to know exactly what they will need money for now,” said Smit.
He continued that government will probably ask for more money for the upcoming elections, adding that the amount actually needed has been under-budgeted.
In addition, Smit also questioned the distribution of drought relief, stating that many farmers have come forward asking when they will receive some monetary assistance.
“Many of the farmers are saying that there is no money for them even though they submitted their drought relief claims months ago. It seems that they are only handing out a bag of maize here and there,” said Smit.
“I think Calle will only play with the figures again,” Smit concluded.
Meanwhile, Secretary-General of the National Unity Democratic Organisation Joseph Kauandenge expects Schlettwein to announce new measures to curb skyrocketing government spending.
“I also expect government to address economic shortcomings, specifically to stimulate the economy, particularly for the youth. We also want to hear how government will try to allocate money to improve the living standards of those people living in informal areas. Those in informal areas are struggling with basic services such as water, sanitation and electricity. Government must be at the forefront of these issues,” said Kauandenge.
Also weighing in, local economist and Managing Director of Twilight Capital Mally Likukela admitted that he does not expect any ground-shattering announcements and said his main expectation is an expanded deficit as a result of continuous excessive spending of certain ministries since the last budget tabling.
“Public debt will have grown substantially over the period and thus in breach of the fiscal targets, but the minister will obviously water it down so it doesn’t sound that terrible. There will be a substantial amount of State-Owned Enterprises (SOEs) bailouts to serve struggling SOEs…Another notable feature will be a substantial amount to recapitalise the Electoral Commission of Namibia (ECN) as already indicated in the first budget. Most importantly, there will be a public re-affirmation to the macroeconomic prudential measures or a plan to respond to the ratings agencies and then International Monetary Fund (IMF) concerns about fiscal stability,” said Likukela.
He recommended that Schlettwein should focus more on macroeconomic stabilising expenditures and to increase spending on the economic sector aspects of government to instil confidence in the economy.
When Schlettwein tabled the 2018/19 mid-term budget review, he announced a decrease in revenue by approximately N$100 million out of the estimated total revenue of N$56.7 billion. At the time, the finance minister expected a moderate increase in the 2019/20 financial year budget by N$400 million to an estimated revenue of N$57.1 billion and by N$7.2 billion in 2020/21 for an estimated revenue of N$64.3 billion.
The mid-term budget also sets the tone for the next MTEF and is not necessarily meant for additional budget allocations, thus the global ceiling tabled in March is expected to remain the same.
Like all amendments to existing legislation, the mid-term budget review will be debated in the National Assembly and will then go to the National Council for further review. According to Parliament records, the debate on the 2017 mid-erm budget took only four days in the National Assembly.
2019-10-22 07:12:01 | 1 months ago