WINDHOEK – The economic recovery and growth stimulus package announced by Finance Minister Calle Schlettwein on Tuesday during the Budget Review and the Medium-Term Budget Policy Statement, consists of four interdependent components over the short and medium-term horizon. The implementation of some of these measures have already started and are expected to accelerate over the Medium-Term Expenditure Framework (MTEF) and Schlettwein emphasised that effective and mutually beneficial partnerships between government, the private sector and non-state actors will be necessary for timely delivery of these commitments.
The growth stimulus package places a high premium on achieving economic recovery, sustainable growth and strengthening fiscal sustainability as the necessary conditions for economic progress and social transformation. A crucial aspect of the public expenditure and growth stimulus package consists of increased development expenditure of about N$8 billion, including the roll-out of the N$4 billion African Development Bank-funded project financing for agricultural mechanisation, rail and road infrastructure and the educational facilities rehabilitation programme.
“This will further be reinforced by the water infrastructure rehabilitation and expansion programme, to the value of N$2.5 billion in the initial roll-out phase. This stimulus package will be strengthened with the roll-out of the SME financing facilities at the Development Bank of Namibia, starting with the launch of the Credit Guarantee Scheme, Mentorship and Training Programme, and the skills-based lending facility for the youth,” said Schlettwein. He added that enabling the realisation of private sector direct investment from the 2019 Economic Summit, for which a minimum of an additional N$20 billion from the domestic private sector investment is committed to the economy over the next three years, will be an integral part of economic recovery. Additionally, Schlettwein is adamant that private sector development activity will be greatly enhanced with the targeted capitalisation of the Development Bank of Namibia, AgriBank and the Equipment Aid Scheme at the Ministry of Industrialisation, Trade and SME Development. Also, leveraging and partial listing of state assets and bringing PPP project proposals to the market to create investment space will start with the partial listing and divestiture of public shares in the telecommunication sector.
Furthermore, implementation of priority structural policy reforms raised at the 2019 Economic Summit and related reforms to promote the ease of doing business and business confidence across various parameters.
The Mid-Term Budget review framework consists of three distinct policy actions. First, it frees up a resource envelope for re-allocation to alternative priority programmes within the appropriated expenditure ceiling. This is to enable optimal provision of services in areas where shortfalls are anticipated and to achieve enhanced development outcomes. Secondly, the review ring-fences expenditure allocations to capital and development programmes as a way of enhancing growth consistent with sustainable fiscal policy. Finally, it unveils integrated economic recovery and growth stimulus intervention measures to support short-run economic recovery and sustainable economic growth in the medium and the long-term.