Standard Bank Namibia’s Manager of Economic and Market Research Mally Likukela said the budget should be responsive in a sense that it takes cognizance of the new emerging trends that requires new and innovative growth paths.
Likukela said the country’s relatively strong Human Development Record is a testimony to the successes of the effective fiscal policy (Budgeting), adding that its score of 0.624 on the 2014 United Nations Human Development Index (HDI) is 13.5 % higher than the scores in the 1980s, making it a medium ranked country and positioning it well above the sub-Saharan African average of 0.502.
“More success stories are reflected in the poverty reduction and social protection programmes that Government has pursued and continues to pursue. Namibia has made great progress in reducing poverty. The old age grants and various other generous Government social safety net programmes have led to a slight improvement in the GINI coefficient (0.593) – although it remains one of the highest in the world. The unemployment rate has also come down considerably to around 29%,” he said.
He added that with these general improvements in the standard of living in Namibia comes new challenges and these are the challenges that needs a refocused and re-engineered intervention angles. He went on to say that the budgeting process should be aligned with urbanization, and service delivery.
“Recently, there has been an escalation of movement of people from rural areas and small towns to cities. This movement has been associated with notable changes in the lifestyles of both rural and urban people. Transportation: With this additional number of people in urban area, the need for public transportation has increased tremendously. The surge in urban centers has also seen a rise in the demand for general and urban amenities as well. Education: Another trend that has been observed is the increased demand for education and the use of social media and access to internet.”
“The improvement in the standard of living also gave rise to a new trend in the form of a growing importance of service industries and tourism. Globalization: Furthermore, Namibia has become more and more linked to Africa and the global economy,” Likukela said.
Likukela noted that the recent mid-term budget review brought to the forefront yet again some more key concerns and observations, adding that the elephant in the house is Government expenditure mix which is heavily skewed in favour of recurrent expenditure remains a concern and should be addressed as a matter of urgency.
“Recurrent expenditures are necessary but they must be controlled and managed. Secondly, the ever caring mother GRN: Government’s tolerance of Non-performance in several parastatals remains a key concern as it remains a major source of resource wastage. Thirdly, low execution rate of budget mandates is a critical concern that Government should address as a matter of urgency as well. Funds must not be returned or even be re-allocated because the implementing agency or ministry was slow to execute,” he said.