By Martin Mwinga
Namibian citizens receive government services from central, regional, and local governments and their agencies. Although many of these services may appear to be provided by a single agency, in most cases, more than one agency is involved in paying for the services, determining how much of that service is provided, and in controlling the specifics of how the service is actually provided. Unlike other countries, the roles of the different levels of governments in Namibia are interrelated, and it is appropriate to view them as a “system” of government. This “system” should in theory be organized in such a fashion that each of its component parts works together to achieve government’s goals. Because of this unique system of government, regional and local government do not have separate ministers of finances, and therefore the only budget that makes their systems function is the national budget presented every March of each year by the Minister of Finance in Windhoek.
The national budget, whose expenditure is distributed to all of Namibia’s 13 regions and to different sectors of the economy, touches the lives of all citizens and has a major impact on the country’s economy. It is because of this that the national budget is the most scrutinized policy document by different entities and individuals in the country. Over time what you see in the budget is not only reflecting the views of politicians in government and parliament, but the concerns and aspirations of the nation at large. Not every citizen has an opportunity to get a copy of the minister’s budget speech or the budget itself, therefore the aim of these articles on the 2007/08 budget is to disseminate information from the budget, and hopefully this will enable you claim what is due to your community, your company and yourself as ordinary citizen of this country.
The 2007/08 Budget Statement was delivered by the Minister of Finance, Saara Kuugongelwa -Amadhila on 15 March 2007. Minister Kuugongelwa-Amadhila made history by becoming the first Minister of Finance to achieve a budget surplus for two consecutive years and in the process managed to meet government fiscal targets that were set some years ago but were never met or adhered to. In her first Budget speech as the new Minister of Finance in the 2003/04 fiscal year, she stressed the point that restoring macroeconomic stability is a pre-condition to achieving both poverty reduction and economic growth and made it clear to her colleagues in government that the honeymoon was over, where ministries could spend what they were not allocated. Fiscal discipline and prudence became her priority number one, not only in words, but in action. To put this in perspective, Namibia’s budget deficit reached 7.5% in 2003, while total debt reached 33% of GDP contrary to government’s deficit target of 3% and debt to GDP target of 25%. The timing of her appointment to the Ministry of Finance was crucial to turn around the situation that was on the verge of getting out of hand. Most economists and analysts at the time, including myself, doubted her capacity to turn around the deteriorating fiscal situation at the time. It took her three years to turn around the situation, and the result by 2007 is a budget surplus of more than 1% and debt to GDP ratio of 25% right on target set by government. How she managed to do this was to put ceilings on government expenditure, use the surplus to pay off government debt, improve tax revenue collection and cutting unnecessary expenditures. While the success in turning around the fiscal balance position of government could be said to be a collective responsibility by cabinet, we must give credit to the Minister of Finance and her team at the ministry of finance for a job well done and hope that her pursuit of fiscal prudence and discipline will remain a priority of her ministry and government. The current Minister of Finance’s success record demonstrates the importance of appointing the right people with the right skills and competence to lead government ministries and institutions, and if we can have most ministers perform at that level then we are assured of realizing vision 2030 goals.
Government Expenditure: What Is in It for Me?
The 2007/08 Budget can be described as an expansionary budget despite being in a surplus. Government expenditure increased by more than 16% to N$17.8 billion, in addition to tax relief given in the form of an increased income tax threshold from N$24 000 to N$36 000. Now that fiscal stability has been achieved the focus is to target growth points in the economy that will have a direct impact on the poor and the rural areas. I now highlight a list of expenditures that I believe have a bearing on the poor and the rural economies. Your business, your community and you can make money by identifying these allocations and contacting the right people with decision-making powers:
1. Agriculture & Rural Development: A total amount of N$390 million is allocated for this purpose, with N$174 million for rural water supply, which includes construction of boreholes. Agribank is given a grant of N$150 million and N$48 million for Affirmative Action Loans for communal agricultural support. For more information on the regional allocation of these funds contact the Ministry of Agriculture and Agribank.
2. Community Based Projects and Land Resettlement: A total amount of N$260 million is set aside for this purpose with N$88 million for land resettlement, N$53 million for community tourism and N$117 million for rural tourism development. For more on this contact ministries of Land and Resettlement and Environment and Tourism.
3. Rural Roads and Other Infrastructure: A total amount of N$470 million has been allocated for this cause, with N$288 million set aside for construction and upgrading of rural roads and N$182 million for the extension and construction of the northern railway. Ministry of Works, Transport and Communication will provide more information on this allocation.
4. Regional & Rural Housing Development. The availability of housing for all Namibians, especially low-income earners, is a top priority for government. Local governments play a major role in determining the cost and availability of housing in their areas. A total amount of N$79 million is allocated for housing, with the Build Together Project receiving N$33 million. Improvement of single quarters and informal settlements in different regions is allocated N$13 million. The remaining balance of N$34 million is allocated to regional and local authorities for provision of housing to their communities, including the N$7 million L??????’??