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Budget cut looms large

Mon, 24 October 2016 19:00
by Rodney Pienaar
News Flash

Treasury will have to cut the budget expenditure for the next financial year to accommodate the approved nine percent increase for civil servants, including teachers, slated for next year March.
This has been confirmed by the Minister of Finance, Calle Schlettwein this week.
“The state will definitely afford nine percent increment across the board.  We will definitely look into where the budget will be cut only when we start formalizing the budget. The budget committee will have to decide on where the budget will be cut in the formalizing process. But what I can tell you is that the state will definitely afford the nine percent increment. All I can tell you for now on the question is that we will afford the increment and will look into where the budget will be cut,” Schlettwein said.
Schlettwein added that the decision to cut down on the budget, although not mentioning which ministries are affected, has been necessitated by the need to accommodate the recently agreed salary increment of nine percent for civil servants.
This latest pronouncement comes at a time when the nation is awaiting the finance minister to deliver a second mid-term budget policy statement towards the end of this month that is expected to even require more tightening of the government finance belts as the state struggles to stay afloat amid social-economic factors contributing to a short fall on funds.
Commenting on the issue the Namibia Public Workers Union (NAPWU), Secretary General (SG) of NAPWU, Petrus Nevonga   welcomed the move by Government to already institute a budget cut to accommodate the expected salary increments.
 “If there are limited resource and no alternative than the state is on the right track. I am not saying that they did well, but they have to do what must be done. In this case there are no alternative choices. If recruitment opportunities are effected that than the state will obviously look at some alternative means and unfreeze posts that might be put on hold,” Petrus Nevonga said.
Political analyst, Dr. Hoze Riruako, also applauded the move by Government to cut on unnecessary expenditure to accommodate the planned increments.
“I am quite sure that the minister decision to cut the budget is the right move, even though the budget will be cut. I think the minister could have taken that decision a long time ago. The thing is that most states are crippled today due to economic collapse. Although our economy is still stable, if we see ongoing strikes of workers in the country, it will come to the point where Namibians are no longer productive. I think the salary increment strikes will only lead to unproductivity of the Namibian nation at large,” Riruako said.
Renowned economic analyst James Cumming, who is also Director of Research at Simonis Storm Securities (SSS), reckons that Government and civil servants need to find ways to meet each other halfway when engaging in salary negotiations and thus avoid confrontation.
“Striking is not the only solution. Whenever public servants strike, the economy is affected because work stands still resulting in low performance any the sectors, which of course affects the economy negatively. When public servants strike, a lot is at stake. For instance some countries have systems in place that they use. Instead of striking, they make individual votes on issues such as salary increments to avoid striking and work continues,” Cumming said.