Public debt to raise to N$140bn

Public debt to raise to N$140bnShiimi paints a gloomy picture of nation’s finances A decade of massive borrowing has seen government debt levels rising from N$13.8 billion in 2011 to N$140 billion in 2021. OGONE TLHAGE







WINDHOEK

Namibia’s public debt is expected to raise to N$140 billion - or 76.25% of the gross domestic product, finance minister Iipumbu Shiimi said yesterday during the tabling of the budget in the National Assembly.

This is forecasted to increase to 84.6% towards the end of 2025/26 fiscal year when the Medium-Term Expenditure Framework (MTEF) runs its course, Shiimi said as he laid down his N$67.9 billion budget. Public debt was expected to remain elevated over the MTEF, he said.

He added that to fund its debt obligations, government will spend 14% of revenue - or N$7.7 billion.

Despite the increase, Shiimi sounded confident that public finances would be managed prudently.

“This budget strikes a balance between boosting our resilience in the core dimensions of sustainable growth and anchoring the fiscal operations in a sustainable macro-fiscal framework,” he said.

As debt escalates, revenue is, however, expected to come under some pressure, with a 6.1% decline - or N$52.1 billion - in revenue due to a contraction in receipts from the Southern African Customs Union pool.

But an upward trend in the growth of revenue was expected until 2025/26.

Over the remainder of the MTEF, revenue is forecasted to gather pace at an average rate of 4.8% as domestic economic activity and regional trade pick up, Shiimi said.

Tax policy interventions

With the newly established Namibia Revenue Agency becoming operational on 7 April, a total of N$79 million has been allocated to it.

Another tax matter of prominence was the minister’s announcement that sanitary pads would now be zero-rated.

“I wish to announce that the supply of sanitary pads will be Value-Added Tax [VAT] zero-rated to enhance affordability by the girl child. I urge suppliers and retailers to pass on this relief to consumers once enacted,” Shiimi said.

Tax refunds would also now be processed faster, he said.

“The re-engineering of VAT claim procedures is progressing well and taxpayers will receive their claims within 90 days if there are no audit queries.”

On the sin tax front, the price of beer increases by 14 cents, wine by 26 cents, 750ml of sparkling wine by 86 cents and a bottle of 750ml of spirts by N$5.50.

A packet of 20 cigarettes will cost N$1.39 more, while 25 grams of piped tobacco will cost 47 cents more and a 23-gram cigar will cost N$7.71 more.

Ministerial allocations

The health ministry has been allocated N$$8.1 billion to, among others, support government’s national response on Covid-19, the associated roll-out of the vaccination plan and the acquisition of pharmaceuticals.

Meanwhile, N$13.8 billion will be allocated to the education ministry while the ministry of higher education gets N$3.1 billion. The University of Namibia has been allocated N$851 million, while N$488 million goes to the Namibia University of Science and Technology and N$1.2 billion for the Namibia Students Financial Assistance Fund. N$5.4 billion will be rolled out to fund social safety net programmes.

On the security front, the home affairs ministry will receive N$5.7 billion while defence will receive N$5.4 billion, a reduction of N$800 million, which will be geared to the health sector.

The justice ministry will be allocated N$491.4 million while the Office of the Judiciary receives N$371.2 million. Graft fighting organisation, the Anti-Corruption Commission, will receive N$62.8 million, taking into account N$11 million already availed to support its operations from the contingency fund.

The ministry of urban and rural development will be allocated N$1.6 billion to support the increasing provision for sanitation infrastructure, land servicing and bulk water, sewage and electricity supply services.

The Financial Intelligence Centre is allocated N$39 million while the Central Procurement Board gets N$32 million.

Furthermore, N$417 million will be channelled to the Office of the Prime Minister, while the National Emergency Disaster Fund was recently capitalised to the tune of N$100 million to boost its responsiveness to prevailing emergency conditions and vulnerabilities.