Economy in critical need of health care
A healthy workforce is a productive workforce and sufficient tax revenue will help government to provide a stable health sector.
12 April 2021 | Economics
We need to come up with a permanent structure to monitor and ensure that services are delivered to the people. - Jacob Nyambe, Dean of the Faculty of Economics and Management Sciences: UNAM
This was one of the talking points last week during a public discussion facilitated by the Economic Association of Namibia (EAN) under the theme, “Fiscal Policy as a Catalyst for Economic Growth: The National Budget 2021/22”, with finance minister Iipumbu Shiimi being the main speaker.
There are various macroeconomic objectives to be achieved, however, there are scares resources. Shiimi noted that there was an urgent need to grow the economy in order to expand the tax base which will ensure that the government collects sufficient revenue as more employees and businesses will be paying tax.
He pointed that improving efficiency in collecting tax was crucial and the newly launched Namibia Revenue Agency (NamRA) would play an instrumental role.
Ensuring efficiency in collecting tax revenue will determine the provision of public goods such as road infrastructure, ensuring a stable health and education sector.
Namibia has been too reliant on the mining sector to drive growth for too long. Over-reliance on one sector is not sustainable in the long run as resources can get depleted.
There is a need to diversify the economy and invest in other potential untapped sectors. When one sector is not performing well, other sectors can also be productive, create employment and ensure sustainable growth, Shiimi said.
He also pointed out the need to cut expenditure on inefficient state owed enterprises (SOEs) and redirect funds and resources to more productive activities to ensure that the economy grows.
James Mnyupe, presidential economic advisor, Patty Karuaihe-Martin, second vice president of the Namibia Chamber of Commerce and Industry (NCCI), and Jacob Nyambe, the dean of the faculty of economics and management sciences at the University of Namibia (UNAM), in a panel discussion shared their thoughts on the 2021/22 budget.
Mnyupe acknowledged the reallocation of scares resources to boost productivity in existing industries and create new ones which will ensure that Namibia yields its potential output. This will help diversify the economy, however, implementation is of critical importance, he said.
Karuaihe-Martin applauded Shiimi for consulting the private sector, as well as small and medium enterprises (SMEs) to give input.
Given the tough business environment that the private sector is operating in, she applauded the minister for not increasing tax rates.
“We have noticed how volatile the tourism industry is, there is a need to diversify our resources in order to boost growth,” she said.
Nyambe said the debt figures were concerning.
He further pointed out that it was not wrong to borrow as Namibia is in a crisis, however, debt sustainability is a major concern. “We should be concerned about the future generation,” he said.
“How is the deficit going to be financed?” he asked.
The other challenge that Nyambe foresees is a need to fast tract the service delivery. Past experience showed that funds allocated to specific sectors were returned back to treasury while people on the ground were in serious need of services.
“We need to come up with a permanent structure to monitor and ensure that services are delivered to the people,” he stressed.