Finance Minister responds to article on salary payments

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WINDHOEK, 26 January 2017 - Minister of Finance Calle Schlettwein. (Photo by: Joseph Nekaya) NAMPA

We would like to respond to the article published in the The Patriot newspaper of Friday, 26 May 2017, which carried the title “Govt Salary Uncertainty”, authored by Mathias Haufiku.

The article is misleading and therefore, cannot go unchallenged as it misinterpreted completely the Circular sent to all Accounting Officers by the Office of the Secretary to Cabinet. The content of the article implies that the Government of Namibia is unable to meet its salary obligations for May 2017 and, its other financial obligations.

At the onset, it is important to highlight that all Government salaries are paid through the Government Payroll System and that all Accounting Officers responsible for Central Government votes must align public expenditures with their approved budget allocation.

Therefore, when an Accounting Officer requests funds in excess of what has been granted by a monthly Treasury Authorisation Warrant (TAW), the request will be referred back to the Accounting Officer to realign the request within the limitations of the approved TAW.

The communication from the Office of the Secretary to Cabinet to Accounting Officers was simply intended to remind them of this important requirement and, is entirely consistent with the principles of sound management of public funds.

It should be noted, that salary payments are afforded a top-priority and as such, have been and will continue to be paid on time. The Payroll for May 2017 is not even an issue for discussion, as it has already been finalised and therefore, there is no “Government salary uncertainty”. Salaries will therefore be paid as normal next week as indicated in the circular issued.

Once again, we would appeal to our journalists to ensure that they fully understand the nature of the issue they are reporting on before going to print. Articles like this can potentially cause disquiet among public and create a climate where confidence in the Government’s ability to manage public funds is undermined.

This control measure, Payroll Funding Capping, of ensuring adequate allocation of funds by respective votes to payroll, is not new and has been in place since 2013. Since that date, in all meetings with Accounting Officers and monthly Financial Advisors’ meetings with the Treasury, the need to respect the requirements of the Payroll Funding Capping has been repeated over and over again. This type of expenditure control measure is not unique to Namibia. In fact, it is a key tool for fiscal discipline widely used by many national governments worldwide.

Instead of criticising this important fiscal discipline tool, The Patriot newspaper, should have supported its use in Namibia as evidence that the Government is serious when it advocates and demands that budget spending must be within the approved appropriations, as well as ensuring that the payment of salaries takes precedence.

As a Government, we will continue to support reforms designed to achieve fiscal discipline, fiscal consolidation and fiscal and macro-economic stability. These are high-level policy priorities of this Government.

The Government is committed to this reform agenda and wishes to reassure the public, investors and other interested parties that these reforms will be applied consistently and transparently for as long as they are needed. This statement was released by finance minister Calle Schlettwein.

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