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Opposition lash ‘directionless’ budget

2022-11-10  Maihapa Ndjavera

Opposition lash ‘directionless’ budget

Maihapa Ndjavera

Debating the mid-term budget review in parliament this week, opposition parties criticised finance minister Iipumu Shiimi for a lack of direction, grandstanding and paying lip service to significant challenges while also expressing concern over debt levels and corruption.

 “You can fool some people sometimes but you cannot fool all the people all the time, change your tactics before it is late,” said Rally for Democracy and Progress parliamentarian Mike Kavekotora during his contribution to the 2022/23 mid-term budget review that was tabled two weeks ago in the National Assembly by the finance minister.

Kavekotora pointed out that external shocks are not subsequent events and the government must simply admit that it failed to adopt a macro-fiscal policy framework to mitigate the impact of external shocks, specifically the Russian-Ukraine conflict. 

He added government once again failed to address the plight of the most vulnerable members of society in the mid-term budget. “In most cases, the budgets you present, including this one, fails to address the plight of the youth and the most vulnerable members of the community in terms of food security, decent housing, sanitation, education and health,” he added.

The medium-term framework expects increased revenue for the current financial year upward by N$4.4 billion, from N$59.7 billion to N$64.1 billion. This represents some 7.9% growth in revenue from the previous year. Over the medium-term expenditure framework (MTEF), domestic revenue is forecasted to grow by an average of 7.4% to reach about N$78.3 billion by the 2025/26 financial year.

Kavekotora further noted, effectively no resources apart from the N$5.2 million of the N$4.4 billion was allocated to the vulnerable member, “the minister claims to care about”. The parliamentarian is worried that the bulk of the N$4.4 billion went to operational expenditure and the basic needs of the man on the street are of no consequence to the

Popular Democratic Movement shadow finance minister Nico Smit last week criticised the level and purpose of Namibia’s debt and noted for “every dollar spend on an incompetent civil servant’s salary, government postpone the development of those most destitute individuals in society.”

He also said Namibia pays billions of dollars to service debt, which could have been applied to lift people out of poverty. “Those who have to live without a roof over their heads, without running water, without proper sanitation, without reliable electricity, without good roads, and in many cases, still without a snowball’s hope of ever getting access to the internet,” continued Smit.

Also weighing on the budget this week, PDM’s Maximalliant Katjimune was worried that no serious commitment was given as to how young people are practically going to be uprooted from the prevailing conditions related to unemployment, poverty and inequality.

“What is more concerning is that government is even failing to maximise and fund its own programmes for young people run through institutions such as the National Youth Service (NYS). The NYS runs various programmes, which trains youth in three different stages,” said Katjimune. 

According to him, the NYS’s Rietfontein Training Centre is a very significant facility, but it only runs at 28% of capacity because of a lack of funds. This means that Namibia is not using this facility and the programmes run by the NYS optimally, leaving thousands of young people who ought to have benefited from the centre and the various programmes run by the NYS disenfranchised and excluded from the system. 

The youthful parliamentarian added NYS runs on an annual paltry budget. In this financial year, the institution received N$64 million. 

“During our oversight visit over the institution in October 2022, the standing committee on human resources and community development discovered that this N$64 million is not even enough to cover the salaries of NYS staff, and that the institution relies on revenue from its various projects to cover the shortfall in terms of salaries for staff,” he stated.

Furthermore, Katjimune said as the younger generation, he is gravely concerned about the ever-rising public debt. In his mid-term budget statement, Shiimi said the public debt stock is expected to increase to N$138.4 billion, equivalent to 69.6% of gross domestic product in FY2022/23. Over the medium-term, expenditure framework (MTEF) the pace of debt accumulation is projected to peak in the next financial year, resulting in a stabilisation of the debt ratios over the remainder of the MTEF, as nominal GDP growth outpaces debt growth.

According to the 2022 Sovereign Debt Ranking, Namibia was ranked among the top 10 countries most likely to default on debt obligations in 2022, with the country having scored 9,4% on government bond yield, with 593 basis points.

Erastus Shuumbwa, a member of parliament representing the All People’s Party (APP), said APP witnessed a lack of direction in terms of economy development and state capacity has worsened, whereby government depends on outsourcing private companies for services. 

“Today, our government in its current form does not drive the economy or deliver services because it has no capacity, almost everything our government does is done through tenders, government appoints private companies to provide simple services such as security, cleaning and other services and one problem is these companies make our people work long hours, no benefits and under pay them below living wages,” pointed out Shuumbwa.

He proposed that the government insource these workers on a full-time basis and abolish all unnecessary services.

The parliamentarian was also equally concerned about the ever-growing debt and debt interest repayments. He said this is unsustainable and will create future problems to the country’s credit ratings. “The projected borrowing to meet government spending is just unsustainable. The country cannot continue to be subjected to very high debts to maintain government mismanagement of public resources by a few individuals at the expense of the nation,” said Shuumbwa.

He further advised government to address public mismanagement of resources if it is to curb the ever-growing public debt. We cannot be borrowing money that ends up misappropriated with no one held accountable at the end of the day while the nation is subjected to repaying borrowed loans where they have no say, he said.

About two weeks ago, deputy finance minister Maureen Hinda-Mbuende said going forward, government has devised a debt repayment strategy, which outlines measures to be undertaken in preparation for the repayment of central government debt. 

“The strategy aims to ensure prudent credit risk management to avoid default events and make sure that the future generation is not over burdened with unsustainable debt,” she explained in the National Assembly.

2022-11-10  Maihapa Ndjavera

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