In last week Wednesday’s tabling of the 2021/22 national budget by finance minister Iipumbu Shiimi, the projected domestic growth outlook is weak and insufficient to make a substantial dent in poverty reduction and the creation of decent jobs. Therefore, Shiimi believes the timely implementation of targeted actions under the Presidential Economic Recovery Plan, coupled with enabling structural policy reforms, is critical to enhancing more private sector-led growth. This, said the finance minister, can fuel new and complementary growth engines that are fiscal policy neutral.
“The implementation of the Presidential Economic Recovery Plan will provide the cornerstone for the strategic interventions to place the economy on a firm recovery path,” said Shiimi. He continued that strategic interventions will be targeted at the attraction of private sector investment, both domestic and foreign, in priority sectors such as agriculture, agro-processing, energy, tourism, and the green and blue economies coupled with economic diversification objectives.
Shiimi added that through consultation with the youth, the budget has underscored the imperative that “there is nothing for the youth, without the youth”.
Said Shiimi: “In line with the call by the youth, our interventions will provide for scaled-up funding for SMEs and youth entrepreneurs for employment and wealth creation. The various financing instruments at DBN and the Ministry of Sports, Youth and National Service, as well as the local preferences under the Public Procurement Act, will, among others, support this national objective,” he outlined.
Moreover, government further wishes to accelerate the implementation of reforms to improve the domestic investment climate by tabling the reviewed Namibia Investment Promotion Bill and the National Equitable Economic Empowerment Bill (NEEEB) this year.
Shiimi went on to say that the government recovery plan will prioritise investing in energy generation and transmission, particularly renewable energy and to leverage public, private partnerships to crowd-in private capital in infrastructure development and services.
According to a 2021/22 budget review by an independent research entity, High Economic Intelligence (HEI), the lack of sufficient financial support could slow economic recovery, whose pace and extent remain uncertain. It advised these should be considered if Namibia aims for recovery. HEI’s budget analysis noted that domestic economic activity has begun to normalise and broader stimulus should be deployed to support the recovery as needed. The research firm states priority areas should have included digitalisation to boost productivity growth, as well as green investment and increased energy conservation on the back of enabling legislation, saying there should have been direct support to SMEs as opposed to facilities without off-takers.
HEI also recommended that the 2021/22 budget should have focused on increasing production capacity in the soft commodities to decrease the reliance on imports and strengthen the local value chain.