Forget the figures, budget must be implemented- SPYL
High sounding figures and long speeches in parliament do not address the problems on the ground for the Namibian people if the budget is not effectively implemented, Swapo party youth league spokesperson Gerson Dumeni has cautioned.
Speaking to this publication a day after the national budget’s presentation in the August House, Dumeni said it is incumbent that the nation addresses the issue of climate change, a lack of which will ruin efforts to heal the floundering economy.
“We can not talk about growth if we do not address climate change, if we can not address the drought and the issue of the floods in the north. This can also affect all the other sectors that we are talking about, be it in education, be it growth in business.”
“As far as the budget of 2018/19 is concerned and is described as pro-growth and pro-poor, one would not really mind much about the figures but want to see the implementation. We can have billions, but as long as we do not have the measures in which we are going to fast track the implementation that budget will just be a paper,” he said.
From a political dimension, academic and analyst, Ndumba Kamwanya submits that the contents of the budget were influenced by the presidential call to alleviate poverty.
He said it is time that resources by focused on addressing the scourge of poverty given that economic growth cannot go in isolation.
Kamwanya, too, says implementation remains the paramount watchword from here onwards.
A rigorous fellow up to institutions also needs to be made to see to it that programs are being efficiently rolled out.
“Allocation of resources itself or the money itself does not tell us the whole story. I think when a budget of this kind is tabled, it is also sending a message of that particular institution. So the question is not that we should not pump money into it, the question is that how are we going o make sure that money is utilised more effectively,” he said.
Economist at Capricorn Asset Management, Claudia Boamah says that commendable efforts have been made to enforce some kind of fiscal discipline such as the reduction of Subsistence and & Travel Allowances by 62.3% over the last three years.
“The culture of SOE dependency on state coffers is also being addressed so that transfers to these entities reduce by 20.0%. However, despite efforts to increase revenue and an intention to decrease spending, over the mid-term the deficit will remain above 3.0% of GDP thus edging the debt-GDP ratio to 46.1% which is significantly above 35.0% required to keep another downgrade at bay,” she says.
She adds, "In the Land of the Free, they’d toast to the “pursuit of happiness”, but this is the Land of the Brave so here’s to the “pursuit of a people-centered, sustainable development agenda for inclusive growth, jobs and an erosion of poverty and inequality… against a backdrop of a subdued growth”.
However, Simonis Storm Securities is disappointed that the budget didn’t give enough comfort that the economy will recover significantly over the medium term.
“This is important as the government continues to be a large contributor to economic activity and fiscal policy therefore has a strong bearing on the outlook for the Namibian economy,” says analyst Indileni Nanghonga.
But a few areas have stood out.
The reduction in the tax bracket for lower income earners should provide some further respite, the firm says.
It welcomes the increase in development expenditure especially as it relates to the improvement in water and logistics hub infrastructure.
“We hoped that the Minister would be more deliberate in implementing measures that would support the real economy, being individuals and SME’s to help them survive the current economic environment.”
“We see this budget as more reactive than proactive as taxes mentioned in the prior fiscal year have been ignored during the current budget statement (e.g. wealth tax), while at the same time new taxes were introduced. We struggle to see where the sustainable fiscal consolidation plans are coming through in the budget,” she says.
Given that in the prior year there were talks about the deficit being funded by the sale of MTC and other non-strategic assets Simonis Storm Securities analyst are disappointed that no mention was made of this in the yesterday’s speech.
The firm regards the tax reforms, coupled with the NEEEF Bill as negative for foreign direct investment.
Finance’s position is such that bill, set for finalization this year under the leadership of the Office of the Prime Minister, should provide certainty in the economy.