Government not broke, says minister OGONE TLHAGE
Minister of finance Calle Schlettwein strongly denied allegations that the government is broke. He made the remark in response to a liquidity crisis which had many fearing that the government had run out of money.
“The paying of salaries is a priority,” he said in response to reports that employees of the National Youth Service, Namibia Tourism Board and service providers such as lawyers had not been paid.
“This is disturbing because government continues to honour its obligations. This notion is wrong and there are no defaults.”
It was recently reported that employees of the National Youth Service and the Namibia Tourism Board had not been paid because of problems at Finance, an allegation strongly denied by Schlettwein.
He attributed the non-payment of salaries to glitches experienced at the two state institutions. “The non-payment of staff is related to technical glitches and has nothing to do with the Ministry of Finance. This is a wrong perception.”
Asked whether the country was broke, he simply responded: “We are far from broke.”
Schlettwein said the government had enough money available to pay for projects such as roads and the salaries of government employees and some state-owned entities that relied on government for funding, such as educational institutions and other not-for-profit organisations.
“In December alone we had increased our rate of payment. We had paid N$10.1 billion, mainly in backlogs that appeared in November and December. We are within our 30-day period and that will be continued. The remaining backlog will be honoured.”
According to him, the government is honouring all its obligations.
“Another issue that should be viewed in a positive light was the fact that government remained committed to honouring all his obligations up until the new financial year begins, anticipated to be in the second week of March,” he said.
Recent budget cuts were a necessity, Schlettwein stressed, saying: “If we did not do what we had done, I am sure we would have been downgraded [by credit-ratings agencies]. It was a tough call but it was the right thing to do. If we did not do this, the consequences would have been more severe.”
He also dismissed the notion that the government had its hands in the coffer of the Government Institutions Pension Fund, explaining that the government, through the Bank of Namibia, had engaged in asset swaps with the pension fund.
He also said that N$3.6 billion had been raised in the debt markets and that not only the GIPF had bought government debt but other role players in the financial sector too, which he said illustrated the government’s ability to repay debt and the confidence the financial sector has in it.
Schlettwein said the fiscal consolidation was expected to continue when the new financial year starts in March.
Minister of finance Calle Schlettwein strongly denied allegations that the government is broke. He made the remark in response to a liquidity crisis which had many fearing that the government had run out of money.
“The paying of salaries is a priority,” he said in response to reports that employees of the National Youth Service, Namibia Tourism Board and service providers such as lawyers had not been paid.
“This is disturbing because government continues to honour its obligations. This notion is wrong and there are no defaults.”
It was recently reported that employees of the National Youth Service and the Namibia Tourism Board had not been paid because of problems at Finance, an allegation strongly denied by Schlettwein.
He attributed the non-payment of salaries to glitches experienced at the two state institutions. “The non-payment of staff is related to technical glitches and has nothing to do with the Ministry of Finance. This is a wrong perception.”
Asked whether the country was broke, he simply responded: “We are far from broke.”
Schlettwein said the government had enough money available to pay for projects such as roads and the salaries of government employees and some state-owned entities that relied on government for funding, such as educational institutions and other not-for-profit organisations.
“In December alone we had increased our rate of payment. We had paid N$10.1 billion, mainly in backlogs that appeared in November and December. We are within our 30-day period and that will be continued. The remaining backlog will be honoured.”
According to him, the government is honouring all its obligations.
“Another issue that should be viewed in a positive light was the fact that government remained committed to honouring all his obligations up until the new financial year begins, anticipated to be in the second week of March,” he said.
Recent budget cuts were a necessity, Schlettwein stressed, saying: “If we did not do what we had done, I am sure we would have been downgraded [by credit-ratings agencies]. It was a tough call but it was the right thing to do. If we did not do this, the consequences would have been more severe.”
He also dismissed the notion that the government had its hands in the coffer of the Government Institutions Pension Fund, explaining that the government, through the Bank of Namibia, had engaged in asset swaps with the pension fund.
He also said that N$3.6 billion had been raised in the debt markets and that not only the GIPF had bought government debt but other role players in the financial sector too, which he said illustrated the government’s ability to repay debt and the confidence the financial sector has in it.
Schlettwein said the fiscal consolidation was expected to continue when the new financial year starts in March.