By:Justicia Shipena and Nghiinomenwa-vali Erastus
Ministries and government agencies that overspent their budget by more than 2% have decreased from three in 2020/21 to just one in the previous financial year (2021/22).
This was revealed in the government’s accountability report for the financial year 2021/22.
The Government Accountability Report provides a snapshot of achievements made during the 2021/22 financial year.
The report is, in essence, an account of how how the allocated public funds were utilized against the planned targets of each Office, Ministry and Agency, for the period under review.
“The number of votes that overspent beyond the allowable margin of 2 percent has decreased from 3 in the 2020/21 financial year to only 1 in 2021/22,” says the report.
The report shows that only the Ministry of Health and Social Services overspent its budget by a big margin of 6% and beyond the allowable margin of 2 percent.
In monetary value, the health ministry has exceeded its allocated budget by more than half a billion (N$532,2 million).
There are, however, two other ministries/agencies that exceeded the allowable margin slightly, namely the national assembly (102.4%) and Education, Arts and Culture (102.4%).
In absolute value, the education ministry exceeded its budget by more than N$330 million, while the national assembly exceeded its budget by N$2 million.
According to the report, four ministries and government agencies under-spent their budgets, compared to eight recorded during the 2020/21 financial year.
Some of the under-spenders are the ministry of agriculture, water, and land reforms together with the national council, with only 94% of their budgets spent.
The water department in the ministry of agriculture could not spend N$14,6 million for the financial year 2021/22.
The report did not, however, attempt to update taxpayers on the reasons for under-spending, despite calls for more accountability and transparency.
There are also ministries such as finance, works and transport, and mines and energy, who also did not finish what they have been allocated by the treasury even though they demanded it.
The ministry of rural and urban development could not utilize N$20 million last year according to the expenditure figures-despite the housing crisis and land servicing backlogs across the country.
“Overall, the execution rate on the operational expenditure was within the allowable margin of 2 percent.”
The government’s operational expenditure out-turn for the financial year 2021/22 amounted to N$56.9 billion against a budget estimate of N$56.3 billion.
The report states that the expenditure represents an execution rate of 101.1 percent, the same as the execution rate recorded in the 2020/21 financial year.
Meanwhile, the accountability report shows that development expenditures out-turn for the period under review stood at N$4.7 billion against the budget of N$5.1 billion.
Almost every ministry could not exhaust its capital budget in 2021/22, with only four ministries/agencies who managed to spend/invest 100% of their capital budget allocation.
The situation was so dire for the office of the prime minister and the ministry of gender and poverty eradication.
The office of the prime minister only managed to spend 33% (N$2,9 million) of the N$8,5 million that they received for capital projects last year.
As for the ministry of gender and poverty eradication which is tasked to reduce poverty and make a dent in gender-related matters, only managed to spend 30.1% of its capital budget.
In absolute value, the report highlighted that the revised allocation to the ministry of gender in the 2021/22 financial year was N$13,8 million, however, the actual expenditure was N$4,1 million.
The health ministry, which overspent in its operational budget, has also struggled to invest in health capital projects- leaving N$70 million unspent.
Overall, the development execution rate decreased from 96% in the 2020/21 financial year to 92.7% in the 2021/22 financial year, according to the report.
“The development budget accounts for 8.3 percent of the total budget while the operational budget accounts for 91.7 percent of the total budget excluding statutory expenditure.”
The report said the total expenditure out-turn excluding interest payments for the 2021/22 financial year amounted to N$61.6 billion, representing an execution rate of 100 percent in line with the budget estimates.
This is compared to the 2020/21 financial year when the execution rate decreased by 1.0 percentage points.
“As a percentage of GDP, government expenditure amounted to 32.7 percent,” it reads.
According to the report, budget deficit funding and debt out-turn for 2021/22 total revenue out-turn for the 2021/22 financial year amounted to N$55.4 billion.
This is said to be equivalent to 29.4% of GDP, while the expenditure out-turn including statutory payments stood at N$70.2 billion or 37.3%t of GDP.
“This resulted in a budget deficit of N$14.9 billion for the year under review, equivalent to 7.9 percent of GDP,” it said.
Furthermore, the total funding requirement was further increased to account for other statutory financing requirements below the line.
The report also states that the budget deficit financing out-turn of the total borrowing requirement, N$18.8 billion was financed from the domestic market through the issuance of treasury bills, fixed-rate bonds, and inflation-linked bonds.
“The balance was sourced through external financing from several sources including the Africa Development Bank (AfDB) funding of N$2.3 billion and the International Monetary Fund (IMF) Rapid Financing Instrument (RFI) worth N$3.9 billion.”
On domestic debt, the report states that 75% of the total funding requirement was sourced through the issuance of debt instruments in the domestic market.
Hence, the domestic debt increased to N$94.9 billion from N$79.6 billion the previous year.
“This effectively increased the ratio of domestic debt to 75 percent of total debt from 70 percent recorded at the end of the preceding fiscal year,” said the report.