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Schlettwein gives half the budget to social sector

by Kelvin Chiringa


Once again, responding to the need of safe-guarding Namibia’s vulnerable, finance minister Calle Schlettwein has allocated half (49.2%) of the 2018/19 budget to the social sectors amounting to N$28.8 billion or N$86.9 billion over the Medium Term Expenditure Framework.

Hell-bent on responding to the needs of quality education, the minister allocated N$13.5 billion, which is 4.0 percent more than the revised allocation for FY2017/18.

Over the MTEF, the allocation stands at N$40.8 billion.

Said the minister, “The allocation of such a large resource envelop should contribute to commensurate better quality of outcomes.”

 He also hinted that based on an estimated learner population of 722, 000 learners, Namibia spends over N$18,668 dollars per learner per year, or some US$ 1,585 dollars, compared to the world average of US$ 446.

Namibia’s huge budget allocations to its education sector however continue to receive disappointing results emanating from poor national pass rates.

Only 36.8% of Grade 12 full time candidates qualified for tertiary education last year.

“There is thus an urgent case for improving the quality of outcomes to justify the high investment rate as more money does not buy success,” said the minister.

Higher Education and Training received N$3.2 billion and about N$9.8 billion over the MTEF.

This entails, among others N$960 million for UNAM, N$600 million for NUST and N$1.45 billion for NSFAF in respect of FY2018/19.

The student financial assistance fund continues to be monitored under the radar as it has been battling a lack of accountability and good governance, magnified by some lost funds.

A new board there has however been tasked to restore the image of the fund.

Schlettwein said of the total expenditure this year, 28.5 % goes to education, equating to 9 % of GDP, making Namibia one of the highest spenders on education.

The minister said this investment is “more than just an expense”, but rather, “a contribution towards prosperity for the youth.”

“If and when however, the returns on such an investment are not commensurate with expectations we need to worry. The risk prevails that in amongst this generous spending a significant amount of inefficiency crept in.”

“The shortage of money here is not the problem, it may be a nasty combination of inefficient management systems in schools and tertiary institutions, teaching capacity gaps, weak research and innovation drives, lack of performance management, hands-off attitudes of parents. Those aspects call for immediate and urgent attention,” he said.  

The health and social services which is riddled with inefficiencies due to over-priced services and pharmaceuticals has received N$6.5 billion and about N$19.6 billion over the MTEF.

“When resources are scarce such inefficiencies must be routed out,” said the minister.  

Poverty Eradication and Social Welfare is allocated N$3.4 billion, 3.7 percent more than the revised allocation for the previous year and about N$10.6 billion.

This is meant to maintain existing programs.

Schlettwein announced that as a commitment to maintain the grants in real value, and given the high dependence ratio, the Old Age Pension is increased by N$50.00 per month.

The third largest chunk of the budget went to the economic and infrastructure sectors with a total sectorial share of 21.7 percent and in line with the increased weight accorded to the development budget.

For FY2018/19, an amount of N$12.7 billion and about N$37.7 billion are allocated over the MTEF.

Transport has received N$3.5 billion, and over the MTEF, the allocation stands at N$9.7 billion meant for the completion of on-going phases of road capital projects with contractual awards.

The amount is supported by N$2.6 billion from the Road Fund in FY2018/19 or about N$ 13 billion over the MTEF as well as N$2 billion annually for project financing under the AfDB loan arrangement over the next two years.

“The envisaged industrialization and Logistics hub investment stimulus will further reinforce this allocation,” said the minister.  

Alpheus !Naruseb’s Agriculture ministry got  N$2.1 billion, and about N$6.7 billion over the MTEF.  

The Ministry of Finance has been allocated N$4.0 billion and about N$12.1 billion over the MTEF.

Out of this amount, N$2.5 billion or 62.5 percent is allocated for PSEMAS or some N$7.5 billion over the MTEF.

 N$124 million has been earmarked for transfers to DBN over the MTEF to support implementation of the SME Financing Strategy, N$70.5 million for transfer to AgriBank over the MTEF to support  its loan book and lending activities.

A total of N$319.9 million was earmarked for the transitional arrangements for the establishment of NAMRA over the MTEF on top of the allocations made for the departments of Inland Revenue and Customs and Excise.

N$ 2 million is allocated annually for the Financial Literacy Initiative.

“The PSEMAS Medical Aid Scheme at N$ 2.5 billion, that is 28% of total allocation the Health Ministry is out of balance. We are grateful for the cooperation we have received so far from the medical professions in our efforts to bring this scheme within affordability ranges whilst maintaining benefits and high quality services.”

“However, we have not yet managed the scheme into a sustainable and affordable medical aid scheme. This therefore is a priority task to be completed within FY2018/19,” said the minister.  

Public Safety and Order takes up the second largest share of the budget allocations, with a total share of 21.7 percent.

For FY2018/19, an amount of N$12.7 billion is allocated and about N$38.7 billion over the MTEF.

In spite of an outcry over unsustainable allocations to the military during a time of peace, Schlettwein went ahead to give defense a whopping N$6.0 billion.

This is 4.9 percent more than the allocation for FY2017/18 and over the MTEF, the allocation stands at N$17.8 billion,

Safety and Security got N$5.2 billion, 3.0 percent more than the revised allocation for FY2017/18 and over the MTEF, the allocation stands at N$16.2 billion.

The Ministry of Home Affairs and Immigration got N$609 and N$1.7 billion over the MTEF.  

The Judiciary got N$366 million, and a total of about N$1.1 billion over the MTEF, while the Anti-Corruption Commission received N$61.0 million, and a total of about N$175.6 million over the MTEF,

In support of these huge allocations, the minister said, “It would be unwise to compromise the sovereignty and safety of our nation and its citizens. This however does not mean that there are no efficiency gains possible here. Namibia’s spending on Defense remains high as a portion of GDP and even here performance management systems should be rolled out to improve impact on Namibia’s.”

Urban and Rural Development got N$2.2 billion, and a total of about N$7.0 billion over the MTEF.  

International Relations and Cooperation got N$884 million in FY2018/19 and a total of about N$2.8 billion over the MTEF,

The National Assembly received N$112.5 million in FY2018/19 and a total of about N$339.0 million over the MTEF, while the National Council was allocated N$100.4 million and N$294.4 million over the MTEF.

Schlettwein also gave an amount of N$200 million to the Contingency Fund in the budget year and about some N$553.0 million for the MTEF to cater for unforeseen emergencies.

For the FY2017/18, a total of N$250 million was allocated to the Contingency Fund and N$179.4 million was spent.

“I have distributed the corresponding information regarding the utilization of the Contingency Fund,” he said.