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Opinion - National budget under the microscope

2021-04-29  Staff Reporter

Opinion - National budget under the microscope
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Petrus Mbidi

Close to 80% of the national budget goes into salaries for government employees, leaving us with only 20% as a nation to inject into operations that will lead to generating income for the nation. Looking for ways on how we can change national budget distribution is fundamental. Thus, analysing our current budget is a need. 

On the contrary, can we even publicly scrutinise the current national budget when the public does not even know how much was left from the previous budget (2020/21)? Nevertheless, the number of loans we keep acquiring present evidence as to what is happening. The 2021/22 national budget is made up of N$67.9 billion, with N$8.5 billion earmarked for interest payments, which is 16.3% of the total revenue, while N$53.9 billion is for operational expenditure and N$5.6 billion is for development. Our national debt is much more than the national budget, and for that, the time to act on how to consolidate our public debt to reduce the huge public debt is now. However, the social sector takes up the lion’s share of the budget, with the Ministry of Health and Social Services being allocated N$8.1 billion; the Ministry of Education, Arts, and Culture getting N$13.8 billion; while the Ministry of Higher Education received N$5.4 billion. The social sector getting the lion’s share of the national budget is understandable, considering the need to deal with the effects of the Covid-19 outbreak.

In continuation, the public safety sector got the second-largest budget allocation totalling N$12.1 billion, or 20.3% of the total budget allocation. The Ministry of Home Affairs, Safety and Security got N$5.7 billion, whereas N$5.4 billion was allocated to the Ministry of Defence and Veterans Affairs. The Ministry of Justice got N$494 million, with the Judiciary receiving N$371 million, and the Anti-Corruption Commission getting N$62.8 million. The public safety sector, which is responsible for national security and defence, has been taking up either the largest share or the second-largest share of the national budget for several fiscal years now. Past and present corruption reports within the public safety sector do create room for drastic actions and punishments to be taken. Cutting the national budget allocation of the public safety sector as an alternative, and punishment needed to be meted out because of corrupt tendencies that transpired within the sector. Additionally, cutting the budget allocation of the public safety sector does have the ability to present an opportunity to reallocate budget funds to investment orientated projects, and as a result, the central government can use those returns to service our consolidated public debt. The mismanagement of funds by one sector should be used to create an opportunity for another sector to capitalise and thrive. 

The economic and infrastructure sector got the third-highest allocation, receiving N$11.7 billion, or 19.8% of the total national budget allocation. N$2.5 billion went to the Ministry of Works and Transport; N$1.7 billion to the Ministry of Agriculture, Water and Land Reform; N$4.7 billion was allocated to the Ministry of Finance; the Ministry of Trade and Industrialisation received N$159.8 million; and the Ministry of Public Enterprises got N$733.4 million. Concerning this sector, one will learn to understand why our economic activities are less, and why the level of our infrastructure is still within the framework of a developing country, and it is because of limited budgetary allocations.

The least national budget allocation went to the administrative sector, which received N$4 billion of the total allocation. The Ministry of Urban and Rural Development got N$1.6 billion, while the Ministry of International Relations and Cooperation was allocated N$827.7 million. For a country that is striving for national growth and development, it is clear as to why the administrative sector should be allocated the least amount of money. After all, this sector is only instrumental in attracting foreign direct investments.

Finance minister Iipumbu Shiimi alluded to the fact that the 2021/22 national budget speaks to boost national resilience to severe shocks, and to add momentum to recovery and sustainable growth. However, from a personal perspective and for many fiscal years now, our national budgets have been pro-growth and pro-poor-oriented budgets that in its nature implies that the investment in growth is aimed at stimulating the economy with the idea of reducing and eradicating poverty. The flabbergasting aspect of our current budget is that it does not clearly outline and indicate how much is earmarked for a specific item. For instance, the allocation of funds based on a broader term such as “capital projects” without actually highlighting the number of items that make up the entire capital project create room for financial theft, and the mismanagement of national funds.

From an economic background, Namibia, like most of the developing countries, has suffered a huge gross domestic product (GDP) deficit due to the Covid-19 outbreak. Budget deficits are reduced in two ways, either by increasing revenue collection through the widening of the tax base, or financing the budget deficit through debt. Mind you, Namibia is one of the countries with high taxes, which could be the reason why there is a limited inflow of foreign direct investments (FDIs). As of 2021, Namibia can no longer afford to increase its taxes, and the central government should be careful with borrowing because of a huge public debt. As an alternative, investing in the right sectors will be a good foundation for a faster economic recovery and growth, considering all factors that are negatively affecting and hindering national growth and development.

2021-04-29  Staff Reporter

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