Windhoek-Alongside expenditure-based measures in the recently tabled N$65 billion national budget, key structural policy reforms – including the Public Procurement Act, the Investment Promotion Act and finalising as well as tabling of the NEEEF Bill – will be emphasised for the implementation of fiscal adjustment to contribute to a better policy environment. This is according to Finance Minister, Calle Schlettwein, who on Wednesday evening during a PwC Budget Dinner, said fiscal discipline must be enforced in all public entities.
Commenting on the tabling of the budget, Schlettwein pointed out that the total level of the proposed expenditure recognises that the revised spending for FY2017/18 included a one-off additional spending of N$2.2 billion for outstanding spending arrears.
“This budget is presented against the background of the expected recovery of the domestic economy and comes at a time after the Namibian economy had endured its most precarious phase,” he said.
He added that positive results are becoming visible of the difficult but correct and timely decisions taken two years ago. These positive signs include the rebounding of the economy to positive growth territory, with a potential boost on jobs and incomes, after a mild contraction in 2017, a realigned macroeconomic framework and stabilised public finances, and key macroeconomic fundamentals that have strengthened and are thereby closing the current account and trade deficits coupled with a strong international reserves position.
“The effects of a low growth environment in our most important trade partners in the region, external shocks to our small open economy over the past two years, coupled with a weaker domestic fiscal space have led our growth trajectory to be decoupled from the stronger global growth dynamics in the short-term. Our policy interventions have yielded positive results. Domestic economic fundamentals are strengthening and the improving global economic and financial landscapes offer a favourable environment for policy effectiveness. In spite of these positive results, we are not out of the woods yet. A lot still needs to be done to achieve the shared prosperity for an industrialised economy we aspire for in Vision 2030,” said Schlettwein.
He added that given the weak economic growth outlook, the FY2018/19 budget presents a funding compact for growth, bringing about jobs, less inequality, less poverty and improved service delivery. Overall, the budget centred on five key priority areas, namely, maintaining a gradual fiscal consolidation policy stance to safeguard macroeconomic stability and long-term fiscal sustainability; providing targeted support to fledgling economic growth protecting core spending in the social sectors of education, health, skills development and housing and sanitation; improving domestic resources mobilisation through fair and equitable tax policy, efficient and effective tax administration; mobilising domestic savings as well as utilising affordable alternative forms of financing; and implementing supportive policies and structural reforms to enhance overall policy effectiveness and bolster the competitiveness of the national economy.