November 01, 2024
Economy

Here’s what you need to know about Shiimi’s budget

February 24, 2022
Here’s what you need to know about Shiimi’s budget

Finance minister Ipumbu Shiimi on Thursday announced a N$61.556 billion budget under the theme “Reimaging, a Better Future for the Youth.”

Over the Medium-Term Expenditure Framework (MTEF), Namibia’s revenue is expected to grow at an average pace of 6.7% to reach N$61.8 billion in FY2023/24 and N$64.7 billion by FY2024/25, underpinned by the increase in receipts from the SACU Customs Revenue Pool and strengthening domestic revenues as the economy recovers over the period. 

Interest payments are projected to increase to N$9.2 billion in FY2022/23, equivalent to 15.4% of projected revenues for the year.

“This means a significant share of our revenues will be absorbed by debt servicing, adversely impacting allocations to key programmes in furtherance of our national development objectives. In lieu of this, we need to continue with concerted efforts to live within our means and stem the pace of debt accumulation,” he said.

Namibia’s budget deficit is projected to reduce to about 5.6% of GDP in FY2022/23. Over the MTEF, the deficit is projected to average about 5.5% of GDP. Accordingly, Shiimi said, a balanced fiscal consolidation policy stance remains necessary over the medium term.

The Treasury Boss said the public debt stock is expected to increase to N$140.2billion, equivalent to 71% of GDP.

“Government is committed to redirect much of the revenue increases in the coming years, as the economy recovers, towards debt redemption and reducing the borrowing requirement. At the same time, we recognize that the scope for further expenditure consolidation has thinned significantly, and we thus shift the policy focus towards entrenching sustainable economic growth,” he said. 

Position pronouncements 

Cabinet has decided to freeze the filling of non-critical positions in the public service for the next financial year. 

Government is seized with the implementation of the resolutions from the 2nd Land Conference.

Government has committed an initial N$50 million to seed the sovereign wealth fund for Namibia, the Welwitschia Fund, which will be managed by the Bank of Namibia.

No undertaking of any new projects during the FY2022/23, given the significant revenue constraints.

Cabinet has decided to freeze the filling of non-critical positions in the public service for the next financial year. 

Allocations 

Ministry of Education, Arts and Culture is allocated N$14.1 billion, equivalent to 19.9% of the budget.

Ministry of Higher Education, Training and Innovation receives N$3.3 billion and about N$9.6 billion over the MTEF. This allocation includes, among others:N$840 million for UNAM, N$455 million for NUST and N$1.4 billion for NSFAF for the FY2022/23.

Ministry of Health and Social Services will receive N$8.4 billion in FY2022/23 and N$25.2 billion over the MTEF.

An amount of N$175 million, and N$523.6 million over the MTEF, has been allocated to TransNamib to give further impetus to the national logistics hub aspirations through recapitalization of the entity.

Ministry of Agriculture, Water and Land Reform is allocated N$1.9 billion in FY2022/23, with specific allocations for water infrastructure refurbishment and development program.

The Development Bank of Namibia (DBN) was allocated N$45 million and some N$144.4 million over the MTEF to support the Bank SME lending activities and youth entrepreneurship financing facilities

An amount of N$90 million and a total of N$288.6 million is earmarked for a targeted budgetary transfer to AgriBank to further support interventions in the agricultural sector.

The Anti-Corruption Commission (ACC) receives N$62.8 million and N$188.5 million over the same period.

Tax

Government says it has taken a principle decision to delay the implementation and announcement of any tax proposals that could stifle economic recovery, but is still exploring options to reduce the non-mining company tax, with consideration to effect it in the outer years of the MTEF.

A modified Electronic Filing Tax Relief Programme will be introduced for another period of 12 months to offer much-needed relief to taxpayers by writing off a percentage of the interest and penalties owed as tax arrears.

 Sin Tax

 The following increases will be effected, effective from 23 February 2022:

A 340ml can of beer or cider will cost an extra 11c,

A 750ml bottle of wine will cost an extra 17c,

A bottle of sparkling wine will cost an extra 76c,

A bottle of spirits will be N$4.83 more expensive,

A packet of 20 cigarettes will cost an extra N$1.03,

A 25 gram of piped tobacco will cost 37c more, and

A 23 gram cigar will cost an extra N$6.77.

 

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Last modified on Friday, 25 February 2022 16:14
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