Finance minister Calle Schlettwein said it is better to keep the wage bill untouched rather than lay off people at a time when the economy was imploding, and retrenchments are the order of the day.
Schlettwein told The Villager this yesterday on the sidelines of a conference on public-private partnerships in Windhoek.
“It is important to realise that when you come with drastic measures to curtail the wage bill that would mean job losses.
"In an economy which is turning down where we are experiencing retrenchments and job losses already, to cause more social suffering by taking families out of pocket we believe is not the right approach,” Schlettwein said.
He said the ministry has, instead, sought other alternative means to rein in the bloated wage bill as well as wage-related expenditure.
He did not go into detail on what these means would be, but he said that he has to be cautious when dealing with the issue.
“We have a more cautious approach through the sets that we’ve announced that bargain on freezing the size rather than reducing the bill at the moment,” he said.
The minister says as signs of recovery are starting to appear, retrenchments are beginning to stabilise.
“We’ve looked into some sectors, and we indeed see that we are bottoming out just like growth is re-emerging. We can see some evidence of retrenchments being stabilised or not continue anymore.
"So it’s true the situation is improving. As growth improves, as the general economy improves we believe that employment will also start happening again,” he said.
On the state of the depressed economy that has so far registered sub-normal growth, Schlettwein said, the poor growth has not been a Namibian case alone.
“The economic times in Namibia are not the best that we have experienced, but one must see in the light that it is the whole sub-Saharan Africa that is having a tough time. We’ve bottomed out. We see some emerging growth,” he said.
In his budget review speech, he pointed at the prospects for the Sub-Saharan African Region as anticipated to brighten moderately, “with growth rising from the worst performance in two decades of 1.4 percent in 2016 to 2.6 percent in 2017 and 3.4 percent in 2018”.
He also added, “I think our approach during the mid-year-budget-review and the outlook is to protect that growth while we rein on debt, move back on sustainability, and that has seen (the) reducing (of) deficit and reducing expenditure ratios to GDP and improved growth. So we believe we are improving.”
The budget deficit for FY2016/17 increased from the revised budget estimate of 6.3 percent to 6.9 percent.
Public debt as a ratio of GDP stood at 38.3 percent, about 0.8 percent better than the budget estimate of 39.1 percent.
Meanwhile, the Minister has so far prioritised effective expenditure control measures and financial risk management framework to ensure that public expenditure is contained within the budgetary and financing framework and the quality of expenditure is improved.
He has also committed to protecting expenditure in the social sectors of education, health and skills and mobilising domestic resources for development through tax policy and tax administration reforms.
Other commitments are the increasing of domestic asset requirement for institutional investors alongside measures to improve the investment climate, establishment and operationalisation of the Revenue Agency for Namibia and introduction of measures to protect the revenue base from base erosion and illicit financial flows.