Understanding the national budget

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We all need to understand what a budget is and its importance. A budget is a strategic tool, or in simple terms, a plan for expenses. The purpose of having a budget is not to spend resources without planning.

The finance minister tabled the 2017/2018 budget in the National Assembly this week. The various objectives of government’s budget centre on the re-allocation of resources through budgetary policy, whereas government aims to re-allocate resources in accordance with the economic (profit maximisation) and social welfare priorities.

Government is discouraging the production of harmful consumption goods, like liquor, cigarettes through heavy taxes and encourages the use of Khaki Products by providing subsidies.

As I have indicated, a budget is an important strategic tool. To strengthen this we need to hold those assigned to key positions accountable for productive spending, investing money in assets that generate return on investment.

I would expect the pensioner grant to be increased to N$1200 per month and also expect money to be invested in areas, such as transport, electricity and communication infrastructure, so we must shift focus to more productive areas.

Another important aspect of the government budget is that the economic growth rate of a country depends on the rate of savings and investment. For this purpose the budgetary policy aims to mobilise sufficient resources for investment in the public sector. Therefore, government makes provision in the budget to the raise overall rate of savings and investments in the Economy.

Namibia should cut on expenditure and follow the implementation of fiscus consolidation, which means that expenditure is controlled and reduced. I look forward to the national budget.
* Festus Hangula

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