By: Nghiinomenwa-vali Hangala
The tabled 2026/27 committed expenditure by the government for the next 12 months will require the government to go to the private sector to borrow N$19 billion.
This is because the budget deficit is expected to widen from N$12.8 billion to N$15.8 billion together with other funding needs.
The borrowing for the 2026/27 financial year will push government debts to N$174.6 billion, the country’s treasurer, Ericah Shafudah announced yesterday.
The borrowing needs are based on the projected decline in revenue, as diamond sales taper, VAT receipts decline, and income tax collections come in lower than anticipated.
In the current financial year ending in March 2026, the government has borrowed N$33.6 billion while for FY2024/25, it borrowed N$29.8 billion.
For the 2026/27 financial year, the government plans to spend N$81.3 billion on its operational budget, representing an increase of N$746 million from the N$80.6 billion of 2025/26.
Shafudah indicated that in formulating her budget, she focused efforts on examining major cost drivers, aiming to eliminate waste and reduce inefficient spending across all Offices, Ministries, and Agencies. As a result, total savings of N$2.3 billion were recorded.
In addition, adjustments were made to one-time expenditures from previous years, repurposing them to support essential new priority projects.
The development budget for FY2026/27 is set at N$6.5 billion for the state-funded developmental projects, as guided by the execution capacity of ongoing projects, she said.
This capital budget is also expected to receive N$4 billion in grant- and loan-funded projects to improve infrastructure across various ministries.
The total government debt is projected to increase from N$174.6 billion (which constituted
65.2 percent of GDP) in FY2025/26 to N$193.4 billion by FY2026/27.
Shafudah stated that her Ministry has commenced the implementation of the Commonwealth Meridian debt management system to enhance efficiency and transparency in public debt management, analysis, and reporting.
In addition, the Government will embrace blended finance, public-private partnerships (PPPs), and private sector participation to deliver resource-intensive but strategically important infrastructure projects.
This approach is expected to enable the Government to harness private sector efficiency and funding while protecting fiscal space.
Similarly, in line with the views expressed through stakeholders’ consultation and as aligned with the objectives of NDP6, the government is advocating for crucial fiscal policy reforms, according to Shafudah.
Shafudah indicated that in doing so, the country will stabilise public debt and place the debt-to-GDP ratio on a gradual downward path towards the SADC benchmark of 60% of GDP.
In her budget statement, Shafudah also indicated that eliminating undefined expenditure classifications (especially disclosure under vote 027) will improve transparency by centralising contingency provisions under a specific vote.
She expressed that the era of overpricing goods, works and services acquired by the government is over.
Shafudah stated that the government strengthening fiscal discipline requires more than sound laws, reinforcing the roles of accounting officers, financial advisors, and internal auditors across the public service as a critical pillar of the State Finance Act framework.
Moreover, it will implement reforms to strengthen accountability and oversight. In doing so, we are reinforcing the credibility of our budget, safeguarding value for money, and ensuring that fiscal discipline is embedded not only in policy, but in daily financial management across.
