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Home / Shiimi motivates N$4.7bn for finance ministry…excludes N$8.5 billion needed for debt servicing

Shiimi motivates N$4.7bn for finance ministry…excludes N$8.5 billion needed for debt servicing

2021-04-23  Edgar Brandt

Shiimi motivates N$4.7bn for finance ministry…excludes N$8.5 billion needed for debt servicing
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Finance minister Iipumbu Shiimi on Wednesday motivated the N$4.7 billion in total allocations of the 2021/22 financial year, for the finance ministry, the bulk of which, some N$3.2 billion is earmarked for the government medical aid. 

 Motivating in parliament, Shiimi explained that besides the Public Service Employee Medical Aid Scheme (PSEMAS), the greater part of his ministry’s proposed ceilings is earmarked for cross-cutting expenditure items such as the procurement of Covid-19 vaccines, contingency provision, political parties funding as well as government institutions falling under finance. However, he noted that the motivated amount excludes a total of N$8.5 billion estimated for debt servicing during the 2021/22 financial year. 

Some seven programmes fall under this budget motivation, including Economic Policy Advice, Revenue Management, Government Expenditure Management, Government Procurement Management, Civil Servant Managed Health Care, Public Private Partnership (PPP) as well as Policy Coordination and Support Services. 

The N$3.2 billion proposed for the Civil Servant Managed Health Care to ensure effective coordination and management of PSEMAS through the undertaking of reforms, members’ registration and coordination of members’ services as well as the timely payment of Health Service Providers’ claims. Included in the allocation to this programme, is N$484 million set aside for the procurement of Covid-19 vaccines. 

The Economic Policy Advice programme, for which N$13.5 million is being requested, is tasked with providing advice on economic policy aimed at fostering macro-economic stability, advancing economic development and addressing socio-economic challenges. During the past financial year, this programme produced the Macro-economic Framework for the 2020/21 Mid-term Review and Policy Statement for the 2021/22-2023/24 MTEF. The main activities for this programme in the current financial year include assessing macro-fiscal economic developments and continuously updating projections, undertaking economic research activities and producing the 2021/2022 Mid-Year Budget Review and Policy Statement for the 2022/2023-2024/25 MTEF.

The programme also oversees the implementation of the Financial Sector Strategy as well as the coordination of Article IV Consultations and Credit ratings. 

During the past year, the Revenue Management programme focused on revenue collections and achieved the estimated target. For this programme, the ministry has earmarked N$538.7 million for the current financial year, of which N$79 million is allocated as an additional amount to the baseline programme activities to bring the Namibia Revenue Agency (NamRA) into operation. Additional achievements under this programme last year were the Income Tax Amendment Act, promulgated in July 2020 and gazetted in December 2020, giving effect to the elimination of preferential tax regimes such as manufacturing incentives as well as the tax holiday provided for in the Export Processing Zones Act. This enabled Namibia to be delisted from the infamous tax haven list by the European Union. Export Levy was also amended from percentage rate to charge per kilograms to avoid undervaluation. 

“With the launch of the NamRA, activities under this programme are divided into two components, namely: the revenue policy formulation under the Ministry of Finance and the revenue administration under NamRA. The programme will oversee the drafting of amendments to the Customs and Excise Act, development of regulations to the Customs and Excise Act and amendments to the tax laws operationalise announced tax policy and administration measures,” Shiimi motivated. 

The Government Expenditure Management programme, for which N$554.4 million was allocated, last year facilitated the tabling of the Mid-Year Budget Review documents. In addition, the Central Government Consolidated Financial Statements for the 2019/2020 financial year were compiled and submitted to the Office of the Auditor General by the statutory date. The programme facilitated to a greater extend timely payments to foreign and local suppliers for goods and services provided to the central government.

For the current financial year, this programme is envisaged to compile 2020/21 Government Accounts and Financial Statements for submission to the Auditor General within the prescribed timeframe; review various votes’ spending results which will inform the formulation of 2021/22 Mid-Year Budget Review documents; coordinate stakeholders’ consultations for the 2022/23 budget and the corresponding MTEF documents; draft the Public Finance Management Bill and continue to update the State Asset Register. 

Said Shiimi: “Under this programme, an amount of N$200 million is earmarked for the Contingency Provision for 2021/22 financial year. An amount of N$103.8 million is allocated for political parties funding for 2021/22 financial year; an amount of N$213 million is earmarked to state entities under its stewardship, in order to contribute to the attainment of the national development objectives as follows: Agribank is to receive N$90 million, Namfisa Appeal Board N$1.5 million, Development Bank of Namibia an amount of N$45 million, Financial Intelligence Centre is allocated N$39 million, Public Accountants and Auditors Board is allocated N$2.5 million and the Central Procurement Board is allocated an amount of N$32 million.” 

Furthermore, the Government Procurement Management programme, for which N$9.8 million is proposed, aims to enhance the efficiency of the Public Procurement System and compliance with the Public Procurement Act. 

According to the finance minister, this programme will further promote integrity, transparency, competitive supply and value for money in the procurement of assets, works and services. The amended Public Procurement Bill and the Codes of Good Practice are expected to be submitted to Cabinet during the 2021/22 financial year.

The main objective of the Public Private Partnership (PPP) programme, for which N$20.3 million is allocated in 2021/22 for personnel and other operational expenses, is to promote an enabling environment to facilitate private sector investments in the provision of public infrastructure assets or services. 

Said Shiimi: “The programme is planning to establish a PPP Project Preparation Facility to be hosted by the Development Bank of Namibia and mobilise funds from regional and international Development Finance Institutions as well as multilateral organisations. Furthermore, the programme is planning to continue expanding the capacity building and outreach programme in order to ensure that public entities are familiar with PPP concepts and implementation framework.”

 Finally, under the Policy Coordination and Support Services programme N$395.6 million is earmarked to provide policy supervision and administrative support to the activities of the finance ministry. The programme entails strategic guidance and oversight towards the achievement of established goals as per the ministry’s strategic plan. 

“The programme will ensure the implementation of the Performance Management System for effective delivery of the goals in the strategic plan of the ministry. It shall ensure that all relevant systems of the vote are secure and available. The programme will provide regular maintenance to its IT infrastructure and review the Service Level Agreements,” Shiimi stated. 

– ebrandt@nepc.com.na


2021-04-23  Edgar Brandt

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