NEEEF, credit ratings discussed
The New Equitable Economic Empowerment Framework will be tabled soon, according to President Geingob.
OGONE TLHAGE
Despite opposition to the New Equitable Economic Empowerment Framework (NEEEF), President Hage Geingob remains resolute in its implementation, saying that the anticipated bill will be tabled soon.
Addressing the economic elephant in the room during his State of the Nation Address, he said: “Public consultations on the Framework have been completed and the Office of the Prime Minister has consolidated the report, which will soon be tabled in cabinet. However, I have followed public discussions on this matter and have observed that while NEEEF may be imperfect, most commentators are avoiding the inequality question wherein NEEEF is located.”
He also spoke about the ratings predicament South Africa finds itself in and used the opportunity to state that there was no intent to delink the Namibian dollar from the rand. “The recent downgrade of South Africa’s foreign debt instruments by rating agencies may have an impact on our own debt ratings and costs of capital but at the moment, we do not see any reason to delink.”
Continuing with the ratings talk, he said: “We have contained government debt, with a good domestic versus foreign debt mix, and we continue to enjoy investment-grade ratings by Fitch and Moody. We have worked very hard over the past 18 months to avoid being downgraded, despite the fact that some variables that impact grading decisions of rating agencies are outside our control.”
This follows warnings by Fitch and Moody’s that Namibia was in danger of losing its investment grade if it failed to rein in spending and the debt-to GDP ratio, which is currently below the 45% threshold set by both agencies.
On the growth front, Geingob was of the opinion that economic growth would be modest for 2017.
“Whereas we expected the economy to expand above four percent at the beginning of 2016, we realised during the mid-term budget review that that projection was unattainable. Consequently, we had to effect the deepest cuts to the budget since Independence to ensure fiscal sustainability and put the economy on a sustainable long-term growth trajectory. Today, the fiscal position has stabilised. We expect modest growth for 2017, while the longer-term growth outlook has improved considerably.
“Our own domestic investors also remain confident in the economy as demonstrated by reinvestments into existing business enterprises and ongoing expansions into various economic sectors. We value the contribution of Namibian investors to the economy. It is for this reason that, last year, we repealed the Foreign Investment Act and replaced it with the Investment Promotion Act, which places local investors on the same footing as international investors,” he said.
* Additional reporting by NAMPA
Despite opposition to the New Equitable Economic Empowerment Framework (NEEEF), President Hage Geingob remains resolute in its implementation, saying that the anticipated bill will be tabled soon.
Addressing the economic elephant in the room during his State of the Nation Address, he said: “Public consultations on the Framework have been completed and the Office of the Prime Minister has consolidated the report, which will soon be tabled in cabinet. However, I have followed public discussions on this matter and have observed that while NEEEF may be imperfect, most commentators are avoiding the inequality question wherein NEEEF is located.”
He also spoke about the ratings predicament South Africa finds itself in and used the opportunity to state that there was no intent to delink the Namibian dollar from the rand. “The recent downgrade of South Africa’s foreign debt instruments by rating agencies may have an impact on our own debt ratings and costs of capital but at the moment, we do not see any reason to delink.”
Continuing with the ratings talk, he said: “We have contained government debt, with a good domestic versus foreign debt mix, and we continue to enjoy investment-grade ratings by Fitch and Moody. We have worked very hard over the past 18 months to avoid being downgraded, despite the fact that some variables that impact grading decisions of rating agencies are outside our control.”
This follows warnings by Fitch and Moody’s that Namibia was in danger of losing its investment grade if it failed to rein in spending and the debt-to GDP ratio, which is currently below the 45% threshold set by both agencies.
On the growth front, Geingob was of the opinion that economic growth would be modest for 2017.
“Whereas we expected the economy to expand above four percent at the beginning of 2016, we realised during the mid-term budget review that that projection was unattainable. Consequently, we had to effect the deepest cuts to the budget since Independence to ensure fiscal sustainability and put the economy on a sustainable long-term growth trajectory. Today, the fiscal position has stabilised. We expect modest growth for 2017, while the longer-term growth outlook has improved considerably.
“Our own domestic investors also remain confident in the economy as demonstrated by reinvestments into existing business enterprises and ongoing expansions into various economic sectors. We value the contribution of Namibian investors to the economy. It is for this reason that, last year, we repealed the Foreign Investment Act and replaced it with the Investment Promotion Act, which places local investors on the same footing as international investors,” he said.
* Additional reporting by NAMPA
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