N$15.3 bn Budget

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– Targets the Poor – By Frederick Philander WINDHOEK A pro-poor and development programme oriented, three-year rolling budget, totalling N$15.3 billion, was tabled in the National Assembly yesterday. It will run from 2007 to 2009. The budget, with primary emphasis on education, health, social welfare, infrastructure and production as priorities, has been widely welcomed by local economic experts as balanced and economically sound. Delivering the budget, Minister of Finance Saara Kuugongelwa-Amadhila said: “The budget places high priority on the development of the rural areas where most of the poor reside. Growth is promoted through improved resource allocation for the development of infrastructure such as roads and rails, schools, health facilities, water and electricity.” The budget also caters for more resources to welfare and social programmes that target the vulnerable in society. “We should resist the temptation to be complacent because of the overall satisfactory performance of our economy. While economic growth is essential for the development of the country, on its own, it is not sufficient to ensure poverty reduction. Poverty, persisting disparities and high unemployment continue to be pressing challenges that need to be addressed,” warned the minister. Pensions for the aged have been increased from N$300 to N$370, with an additional amount of N$395 million allocated over the next three years within the medium expenditure framework. “An allocation is made to the registration of Orphans and Vulnerable Children. This amount will enable the government to properly identify OVC and ensure that assistance is extended to all the needy children,” she said. A whopping N$1,3 billion, of which N$338 million has been allocated in 2006/07 from which the govern-ment’s ETSIP programme will also be funded, has been set aside for education. “Increasing social grants and expanding safety and improving the quality of education and health services will surely improve living conditions. However, this is not enough. We need to address the causes of income poverty and inequities by tackling unemployment. The Ministry of Health and Social Services also received an additional amount of N$190 million over the medium term to accommodate 105 expatriate nurses for the next two years,” Kuugongelwa-Amadhila told the House. She announced that 20 percent of the government’s total expenditure would be spent on infrastructure development projects such as the Aus-LÃÆ’Æ‘Æ‘ÃÆ”šÃ‚¼deritz railway. “This will not only speed up the completion of these important transport links, but it will create employment through the use of labour intensive methods. At completion of these projects, Namibia is to become a regional transport hub as the transport corridors develop their full potential. To this end the Ministry of Works, Transport and Communication received an additional allocation of N$387 million,” she said. She further announced that an additional amount of N$120,5 million was allocated to the Development Bank of Namibia to enable entrepreneurs to access finances for the establishment of businesses. “We are committing a total of N$750 million over the MTEF period for the development of the Kudu gas field. Ensuring a reliable electricity supply is not only an obligation towards our citizens, it is also essential for maintaining Namibia’s favourable investment climate. Furthermore the mining, fishing and agricultural sectors receive N$2,6 billion, which include the Green scheme and aquaculture activities that will stimulate the economy,” she said. The minister stated that tourism had received an injection of N$475 million towards developing Namibia as a popular tourist destination, which will develop new job opportunities in the sector and related industries. The newly established Anti-Corruption Commission has been given a start up amount of N$13,5 million. “For the economy to grow, we need to provide the basis for peace and stability. Crime, be it physical or white-collar offences, need to be fought and the sovereignty of our country defended. The rule of law must be upheld and protected. Thus an additional amount of N$383 million for the combating of crime and the safe custody of prisoners is made,” said Kuugongelwa-Amadhila, who also said an amount of N$75 million was allocated to the ministry of Justice to complete the Oshakati High Court and to recruit new magistrates. The minister expressed concern over the government’s bloated civil service. “Previous attempts to contain the growth in the civil service have only had limited success. The number of civil servants has increased by almost 6 percent per year in the last three years, taking into account that about 4,3 percent of the population is employed in the civil service compared to an average of 2,1 percent in Africa and 1,6 percent in Southern Africa. This has financial implications. It has become urgent that government addresses increasing personnel expenditure,” she said. The minister suggested that civil servants not be laid off, but that it can be achieved through controlling the filling of vacancies by limiting it to only very essential ones. “The country’s debt levels and the management of the public debt stock were important in determining the outcome of credit ratings. The rating has already caused a decrease in borrowing rates for government. Increased interest in Namibian investment opportunities from abroad and improved funding possibilities and Namibian companies are other channels through which the rating outcome will be felt,” she predicted. Kuugongelwa-Amadhila proudly announced an increase of N$1,7 billion in revenue collection. “The revenue projection foresees a total increase in collection of 8,1 percent. This is mainly driven by an increase in domestic tax collection, which is set to increase by 22 percent to N$1,4 billion. This was achieved without any major adjustments to tax rates, but mainly through revenue collection improvement and through broadening the tax base.” She said the classification of Namibia as a middle-income country creates serious challenges in accessing concessional funding. “The fact that this classification relies exclusively on income per capita, it ignores one of the most important yardsticks for development and that is income disparity. It cannot be right to give low middle income countries such as Namibia the same terms for borrowing as are available to large developed countries. “A compromised set of terms and conditions for this group could bring us closer to an agreeable solution,” she hoped.

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