N$740m for Air Namibia
Amid a continued government belt-tightening exercise Air Namibia has once again scooped the lion's share of the budget for state-owned enterprises.
National carrier Air Namibia has received the lion's share of the funding allocated to public enterprises for the current fiscal year - a whopping N$740 million.
Air Namibia's budgetary allocation for the 2018/19 financial year, announced as part of finance minister Calle Schlettwein's national budget statement on Wednesday last week, represents 50% of the total allocations given to public enterprises.
This towers over the amount given to rail operator TransNamib which received N$171 million and the Namibian Broadcasting Corporation's N$140 million.
Other public enterprises that received significant allocations include the Namibia Statistics Agency (N$94 million), Development Bank of Namibia (N$80 million), the National Youth Service (N$36 million), the Road Contractor Company (N$21 million), the National Council for Research, Science and Technology (N$11 million), the Agro-Marketing and Trade Agency (N$15 million), New Era Publications (N$15 million) and the Namibia Press Agency (N$15 million), while the media joint-venture between the governments of Namibia and Zimbabwe (Namzim) got N$10 million.
Commenting on the allocations to public enterprises, its line minister Leon Jooste said it was a situation that would need to be embraced.
According to him, funding mechanisms would need to be sought to help plug potential gaps.
“The reality of our current budgetary constraints should be embraced by us all and that includes the public enterprises. The allocations to public enterprises will have to be complemented and supplemented by creative funding mechanisms and the leveraging of their respective assets,” said Jooste.
He added there was also a continued dependence on government support packages, without finding other sources.
“Most public enterprises have relied exclusively on funding from the state as shareholder without taking the responsibility for sourcing alternatives,” said Jooste.
Independent analyst Klaus Schade felt more would be needed to understand the support packages required for public enterprises.
“A more detailed analysis of the public enterprises that have received financial support and for what purposes is needed. Some public enterprises receive bailouts to keep afloat while others receive financial support for infrastructure development,” said Schade.
He also felt government would need to monitor allocations to public enterprises to ensure it would be in a position to honour existing obligations.
“Guarantees granted to public enterprises have more than doubled from N$6.4 billion (2015/16) to N$12.8 billion (2017/18) and are expected to reach N$14.8 billion in 2018/19 and N$17.4 billion in 2020/21, which amounts to about 7.9% of Gross Domestic Product. It is important to closely monitor and evaluate the performance of public enterprises to ensure that government does not need to honour these guarantees,” said Schade.
Labour expert Herbert Jauch said efforts should have been made much earlier to rein in bailouts.
“A more coherent and strategic approach to subsidies for public enterprises and cutting lavish management packages could also have been adopted years back,” said Jauch.
Academic Roman Grynberg felt the issue of unending bailouts was not being addressed properly.
“From what I can see insufficient attention is being paid to dealing with public enterprise deficits and poverty alleviation should be receiving the money used to ensure the existence of SOEs,” said Grynberg.Public enterprises received a total of N$1.47 billion for the current year.
OGONE TLHAGE
Air Namibia's budgetary allocation for the 2018/19 financial year, announced as part of finance minister Calle Schlettwein's national budget statement on Wednesday last week, represents 50% of the total allocations given to public enterprises.
This towers over the amount given to rail operator TransNamib which received N$171 million and the Namibian Broadcasting Corporation's N$140 million.
Other public enterprises that received significant allocations include the Namibia Statistics Agency (N$94 million), Development Bank of Namibia (N$80 million), the National Youth Service (N$36 million), the Road Contractor Company (N$21 million), the National Council for Research, Science and Technology (N$11 million), the Agro-Marketing and Trade Agency (N$15 million), New Era Publications (N$15 million) and the Namibia Press Agency (N$15 million), while the media joint-venture between the governments of Namibia and Zimbabwe (Namzim) got N$10 million.
Commenting on the allocations to public enterprises, its line minister Leon Jooste said it was a situation that would need to be embraced.
According to him, funding mechanisms would need to be sought to help plug potential gaps.
“The reality of our current budgetary constraints should be embraced by us all and that includes the public enterprises. The allocations to public enterprises will have to be complemented and supplemented by creative funding mechanisms and the leveraging of their respective assets,” said Jooste.
He added there was also a continued dependence on government support packages, without finding other sources.
“Most public enterprises have relied exclusively on funding from the state as shareholder without taking the responsibility for sourcing alternatives,” said Jooste.
Independent analyst Klaus Schade felt more would be needed to understand the support packages required for public enterprises.
“A more detailed analysis of the public enterprises that have received financial support and for what purposes is needed. Some public enterprises receive bailouts to keep afloat while others receive financial support for infrastructure development,” said Schade.
He also felt government would need to monitor allocations to public enterprises to ensure it would be in a position to honour existing obligations.
“Guarantees granted to public enterprises have more than doubled from N$6.4 billion (2015/16) to N$12.8 billion (2017/18) and are expected to reach N$14.8 billion in 2018/19 and N$17.4 billion in 2020/21, which amounts to about 7.9% of Gross Domestic Product. It is important to closely monitor and evaluate the performance of public enterprises to ensure that government does not need to honour these guarantees,” said Schade.
Labour expert Herbert Jauch said efforts should have been made much earlier to rein in bailouts.
“A more coherent and strategic approach to subsidies for public enterprises and cutting lavish management packages could also have been adopted years back,” said Jauch.
Academic Roman Grynberg felt the issue of unending bailouts was not being addressed properly.
“From what I can see insufficient attention is being paid to dealing with public enterprise deficits and poverty alleviation should be receiving the money used to ensure the existence of SOEs,” said Grynberg.Public enterprises received a total of N$1.47 billion for the current year.
OGONE TLHAGE
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