Govt cash not limitless

Finance minister Calle Schlettwein says demands for more money can hamper sustainability.

15 May 2019 | Economics

Finance minister Calle Schlettwein has cautioned that demands for more money appear to be based on the perception that government has unlimited resources.

Speaking in the National Assembly this week, while responding to the matters raised during budget motivations by ministers, Schlettwein said that stretching the government's finances beyond affordability ranges came with the risk of compromising long-term sustainability.

In March the finance minister had unveiled a N$66.5 billion budget - 2% larger than last year's - geared towards “stimulating economic growth” and creating decent jobs, while further adjusting the public fiscal stance to “sustainable and stable levels”.

The development budget was increased to N$7.9 billion, from N$5.5 billion, and would be protected against frequent reallocation during the financial year.

Schlettwein also announced a raft of tax proposals that are expected to generate approximately N$400 million in revenue. Income-tax changes will come into effect in 2020 after the drafting and tabling of the specific tax proposals. New excise duties will become effective upon the tabling and gazetting of the schedules. Schlettwein said at the time that the budget deficit was estimated at N$8.2 billion, or 4.1% of GDP, and was expected to average 3.4% over the medium-term expenditure framework (MTEF), compared to 4.4% in 2018/19. The deficit would be financed through a combination of domestic, multilateral and bilateral borrowing. The leveraging of state assets in the telecommunication sector is expected to ease financing obligations and mitigate against increases in the debt stock, Schlettwein said.

This week he emphasised prudence. “The increasing calls for adequacy of resources is predicated by the fundamentals of unlimited resources at any point in time. Overemphasis on adequacy of budget allocations has associated risks of going beyond affordability ranges and compromising on long-term sustainability,” he said. He added that as the fiscal space improves, budgetary allocations should increasingly improve, and that at a national level, the timely implementation of structural policy reforms must be done to support the realisation of better outcomes. “In the same vein, the implementation of measures to improve internal operational efficiencies at offices, ministries and agency level are among the success factors to bring about internal gains and enhance sectorial outcomes,” said Schlettwein.

He added that allocative efficiency enables government to increasingly allocate resources where value for money is best realised.

“We live in finite world, with finite resources, and therefore scarcity is a fundamental economic matter of long duration. The tensions of resource adequacy and resource scarcity is a constraint, which comes to bear on budgetary considerations,” he said.


Similar News


Once bitten, twice shy

3 days ago - 13 September 2019 | Economics

The Government Institutions Pension Fund says it cannot guarantee the success of its unlisted investment scheme but has taken precautions to ensure that it does...

Inflation edges upwards

3 days ago - 12 September 2019 | Economics

Annual inflation in Namibia was 3.7% in August, up slightly from 3.6% the previous month, but still below the 4.4% of a year ago.Data released...

China's N$10bn loan still on table

4 days ago - 12 September 2019 | Economics

The government is yet to take up the Chinese government offer to borrow up to N$10 billion through the Export-Import Bank of China. ...

AfCFTA: Hard egg to crack

5 days ago - 11 September 2019 | Economics

YANNA SMITH - The African Continental Free Trade Area (AfCFTA), which entered into force on 30 May this year, has caused quite a furore across...

Diversify economy to find growth

5 days ago - 11 September 2019 | Economics

Namibia needs to find ways of diversifying its struggling economy and cutting down the reliance on mining industry for sustenance, the vice chairperson of the...

Struggling NBC pulls the plug

6 days ago - 10 September 2019 | Economics

STAFF REPORTERIn an effort to contain costs, the financially crippled public broadcaster, the Namibian Broadcasting Corporation (NBC), yesterday announced a host of austerity measures, which...

Sierra Leone capital confronts water crisis

2 weeks ago - 28 August 2019 | Economics

Nellie Peyton - Half the year, Iyatunde Kamara worries torrential rains will wash her house off its hillside and into the rivers of waste that...

Recession to hit even harder

2 weeks ago - 27 August 2019 | Economics

Namibia is likely to spend its third consecutive year in recession in 2019, with the economic contraction worse than the previous two years.In its latest...

Xi’s bad year clouds China's celebrations

3 weeks ago - 22 August 2019 | Economics

Helen Roxburgh - It was meant to be an unabashed celebration of the triumph of Communism in China, and of president Xi Jinping's authority as...

Solar-irrigated farms face hungry elephants

3 weeks ago - 22 August 2019 | Economics

Lungelo Ndhlovu - When one of Zimbabwe's first solar mini-grid systems was installed in this drought-prone village near the Botswana border in 2016, residents thought...

Latest News

Great risk, great reward

3 days ago - 13 September 2019 | Business

Evany van Wyk In only three years, Braam Vermeulen and his two other founding partners...

Once bitten, twice shy

3 days ago - 13 September 2019 | Economics

The Government Institutions Pension Fund says it cannot guarantee the success of its unlisted investment scheme but has taken precautions to ensure that it does...

Rape: No means no

3 days ago - 13 September 2019 | Crime

Police chief Sebastian Ndeitunga yesterday underlined a woman's right to say no and urged Namibians to band together to end the epidemic of violence by...

Perseverance and a good attitude...

3 days ago - 13 September 2019 | Business

Evany van Wyk Growing up in the small town of Rehoboth, Chantell Engelbrecht longs for the times she used to play street soccer with her...

Fear is not a factor

3 days ago - 13 September 2019 | Business

Michelline Nawatises Primus Shaapopi was born at Eenhana in the Ohangwena Region. For 17 years, he was raised as a Catholic by his grandmother at...

Self-motivation and teamwork

3 days ago - 13 September 2019 | Business

Mariselle StofbergEvery new challenge can translate into a learning experience, which helps Natalia Simon gain deeper knowledge of my profession.Simon has never allowed the challenges...

Adding value to the equation

3 days ago - 13 September 2019 | Business

Evany van Wyk Born and raised in Oranjemund in the //Karas Region, Marisol Basson attended high school in South Africa. She decided to study marketing...

SOEs a burden - Jooste

3 days ago - 13 September 2019 | Government

Public enterprises minister Leon Jooste says state-owned enterprises in Namibia, with the exception of a few, have failed to optimally deliver on their mandates.“In some...

Let's talk about sex

3 days ago - 13 September 2019 | Opinion

Teen pregnancy in Namibia remains a rising concern. The high teen pregnancy rate has also resulted in many girls dropping out of school to stay...

Load More