RMB Namibia recently held a post-budget event with clients in Windhoek and Swakopmund, under the theme “Unpacking Namibia’s fiscal sustainability trajectory”. At the events, Ruusa Nandago, FirstRand Namibia Economist painted a picture of where Namibia’s various fiscal metrics are and where they are headed. Nandago highlighted the government’s return to fiscal consolidation, the SACU revenue shock which is expected over the next two to three years, elevated fiscal deficits and the upward debt trajectory captured in the budget.
“The challenge to the economy will only be overcome if government, regulators, the broader financial services industry and business work together in partnership. There are very encouraging signs that this is already happening. We need to get to the other side of this crisis with businesses that are strong enough to help the economy grow again. It is, after all the responsibility of all financial market participants to keep the debt and equity markets functioning, especially as the country’s reputation is on the line,” said RMB Namibia CEO, Philip Chapman at the event.
The panel discussion also included Daniel Kavishe, Sub-Saharan Economist at RMB South Africa, and Gerda Brand, Tax Director at Deloitte Namibia, both providing insights into how Namibia’s fiscal performance is stacking up against the region, noting as an example that many of Namibia’s peers have managed to secure funding and roll out vaccines at a faster pace than Namibia.
Kavishe pointed out that there remain pockets of growth in the economy that will bring down various negative fiscal metrics and get the country back to a path of fiscal sustainability. “These include investments into water and energy security and investments into network industries such as rail transport and ICT,” Kavishe said.
Brand echoed the need for growing the economy, to increase the revenue pool for the government. She also challenged the notion that Namibia has an expenditure problem only and not a revenue problem, as there is room to improve the efficiency with which tax is collected. More specifically, there is a need to ensure tax policies and tax legislation speak to each other and to ensure equity in the tax system.
The final consensus from the panel was that the successful implementation and execution of HPP II is core to growing the economy and ensuring that Namibia gets back to a path of fiscal sustainability.