Budget is pro poor - Likukela
Local economist Mally Likukela is of the view that the budget, while pro poor, also failed to address rating agencies' concerns.
Twilight Capital Consultants managing director, Mally Likukela says the 2017/18 budget presented in parliament by Finance Minister, Calle Schlettwein is pro poor because it addresses the growing public debt.
“The budget was very much according to my expectations, which is focus on assuring rating agencies that they are dealing with the expanding public debt and also the growing wage bill.”
Speaking to Nampa Likukela said the national document appears to be consolidating government expenditure, but the wage bill remains the same.
“This huge public structure that we have currently will continue. Forty-five to 50% of our budget goes to salaries.”
On the freezing of employment in the public service, Likukela said this will have a negative impact on fighting poverty as this is one way of pulling people out poverty.
Schlettwein said effective measures are required to manage the annual growth in the wage bill.
“This includes managing the growth of the public sector through natural attrition such that each office, ministry or agency identifies non-critical positions which should not be filled once they fall vacant and that annual cost of living adjustments are capped at levels not more than annual inflation.”
Last year, two international credit rating agencies, Moody's and Fitch, downgraded Namibia's economic outlook to negative and raised alarm about the public expenditure.
Likukela said nothing should be expected from rating agencies right now, as they will monitor the situation but noted that the budget failed to address two of the three issues raised by the agencies.
“The agencies had highlighted slow growth, huge public debt and the New Equitable Economic Empowerment Framework (NEEEF). The budget alluded to these three but only addressed satisfactory the measures to curb the ballooning public debt.”
Schlettwein said NEEEF and the proposed Bill is an important tool for an economic transformation and closing inequality gaps.
“While government and industry embrace this principle, we should seek win-win approaches to give effect to the national objective enshrined in the Bill through ongoing consultation under the Office of the Prime Minister and bring it to finality.”
Likukela said the budget suggested no significant measures to see economic growth in Namibia, with predictions pointing to 1.3% in 2017/18 from 5% in the previous two years. He said it will take Namibia two to three years to stop consolidating and start expanding.
NAMPA
“The budget was very much according to my expectations, which is focus on assuring rating agencies that they are dealing with the expanding public debt and also the growing wage bill.”
Speaking to Nampa Likukela said the national document appears to be consolidating government expenditure, but the wage bill remains the same.
“This huge public structure that we have currently will continue. Forty-five to 50% of our budget goes to salaries.”
On the freezing of employment in the public service, Likukela said this will have a negative impact on fighting poverty as this is one way of pulling people out poverty.
Schlettwein said effective measures are required to manage the annual growth in the wage bill.
“This includes managing the growth of the public sector through natural attrition such that each office, ministry or agency identifies non-critical positions which should not be filled once they fall vacant and that annual cost of living adjustments are capped at levels not more than annual inflation.”
Last year, two international credit rating agencies, Moody's and Fitch, downgraded Namibia's economic outlook to negative and raised alarm about the public expenditure.
Likukela said nothing should be expected from rating agencies right now, as they will monitor the situation but noted that the budget failed to address two of the three issues raised by the agencies.
“The agencies had highlighted slow growth, huge public debt and the New Equitable Economic Empowerment Framework (NEEEF). The budget alluded to these three but only addressed satisfactory the measures to curb the ballooning public debt.”
Schlettwein said NEEEF and the proposed Bill is an important tool for an economic transformation and closing inequality gaps.
“While government and industry embrace this principle, we should seek win-win approaches to give effect to the national objective enshrined in the Bill through ongoing consultation under the Office of the Prime Minister and bring it to finality.”
Likukela said the budget suggested no significant measures to see economic growth in Namibia, with predictions pointing to 1.3% in 2017/18 from 5% in the previous two years. He said it will take Namibia two to three years to stop consolidating and start expanding.
NAMPA
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