Nedbank Namibia, Simonis Storm review budget

Experts discussed the effect of the budget on ordinary Namibians and the business sector.

30 April 2019 | Economics

Keeping in mind that businesses are under immense pressure, there are not many initiatives in the budget aimed at tackling the tough situation. – Dr Edward Turner, Head: Nedbank Corporate and Investment Banking

A panel consisting of experts from Nedbank Namibia and Simonis Storm which reviewed the 2019/20 National Budget agreed that finance minister Calle Schlettwein presented a fair and neutral budget, but the real test remains in its implementation.

The panel discussion which aired live on the Nedbank Facebook page, took place just after Schlettwein tabled the budget in parliament. It was moderated by the managing director of Simonis Storm (SS), Bruce Hansen, and included the head of Nedbank corporate and investment banking, Dr Edward Turner, the head of Nedbank business banking, Britt du Plessis, the head of research at SS, Megameno Shetunyena, and SS economist, Indileni Nanghonga.

The discussion aimed to give an overview of the budget and identify potential outcomes of the minister’s budget speech, as well as determine what these outcomes signal about the economic road ahead.

“The greatest challenge is to balance a limited fiscal capacity with the need to make politically tough decisions,” Hansen commented on the challenges of the national budget.

Consumer

A number of items raised in the National Budget were unpacked at the discussion, and one issue highlighted was its effect to the man on the street. Commenting on this, Du Plessis said: “It is commendable to see that the budget is focused on the individual in these economic times by keeping the income tax rate unchanged.”

Nanghonga said that even though the income tax rate has not increased, the increase of the fuel levy and sin tax could ultimately burden the consumer.

“Consumers are currently under distress, and it seems like increasing the fuel levy and sin tax are easy to implement without necessary getting public rejections. However, what we need to look at is, what the real effects of those increases are on the household. Increasing the fuel levy last year lead to taxi drivers demanding an increase in taxi fare, which resulted in the burden being carried by the consumer,” she said.

Business

Furthermore, Turner pointed out: “Keeping in mind that businesses are under immense pressure, there are not many initiatives in the budget aimed at tackling the tough situation. However, the Whistle Blowers Act will be implemented, which should help with the prevention of corruption and that could have a positive effect on foreign direct investment.”

Adding to this point, Shetunyena said: “The business investor community is looking for certainty around policy. Further delays in specific policies will determine if investors will deploy their capital in Namibia or not. We need certainty around tax amendments.”

“The budget’s purpose to make more income available to improve our lives. However we operate honestly, diligently, with the common good as our only objective in mind. This forum will keep monitoring the budget implementation and provide regular feedback,” concluded Hansen.

To date, the Nedbank’s live budget review video received 13 552 views.

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