New Deal Or Same Old Promises?
FINANCE Minister Saara Kuugongelwa-Amadhila has promised a tightening of the purse strings in this year's National Budget but is she going to deliver?
We can say in all honesty that whatever the Minister, the same old
promises are made year after year, and Government expenditure as
well as the deficit, continues to skyrocket on an annual basis.
So how can we believe things are going to be better this time
around? Kuugongelwa-Amadhila emphasised that the next financial
year would be about what she termed 'tough compromises'.
"There are hard choices to be made.
The next financial year will be a challenge because finances are
tight, but it is also an opportunity for us to learn to manage our
scarce resources more effectively and efficiently", she said.
Again, the prognosis is not good.
The country's debt is expected to reach 30,3 per cent of gross
domestic product (GDP) by the end of this month, representing a big
increase over the preceding year when it was 25,2 per cent.
By 2005 it is expected to reach 32 per cent of GDP.
Again, not a positive sign.
The main contributors to the country's mounting debts are
considered to be a persistent domestic budget deficits as well as
foreign loans.
While stressing the need for financial prudence,
Kuugongelwa-Amadhila emphasised that this could not be expected to
be done at the cost of development, and that major challenges to
the country still include tackling poverty, addressing health and
social issues as well as improving educational standards and
infrastructure.
What did she propose to do about cutting Government expenditure?
The Finance Minister said that State departments would be required
to cut overtime payments among others.
She also said that vacancies in the civil service, except those
deemed essential, would be frozen.
Nothing new so far.
Government, she added, would also clamp down on easy borrowing
terms for parastatals and levies would be charged on loan
guarantees.
Again, possibly, too little and too late.
Everyone is aware that Government had earlier set itself the
target of limiting Namibia's national debt to no more than 25 per
cent of GDP.
But by the end of this month, it will be over 30 per cent.
And in the year ahead, it will have grown to 32 per cent.
Frugality will certainly have to be a priority in the year
ahead, but past promises not kept do not augur well, despite all
the best intentions by our Finance Minister.
We do need to count the cost of, among others, corruption.
This was not mentioned by Kuugongelwa-Amadhila, but we know it
is expensive for our country and its people.
The bailing out of parastatals is another area in which caution
must be the watchword, and the cutting of massive salaries and
benefits in these State Owned Enterprises, as well as in other
areas of Government - such as travel and subsistence allowances -
are essential if we are to make any progress in cutting back the
deficit.
The good news for us is the increase in social pensions, from
N$250 to N$300.
It still represents a paltry amount to live on, but is
nevertheless something which should have been done a long time
ago.
We sincerely hope that our new Finance Minister, who has just
introduced her maiden National Budget, will do better than her
predecessor in sticking to her promises, and ensuring fiscal
discipline from the word go.
We don't hold out much hope, given the past rather dismal record
in this regard, but there is always a chance that things will
improve for the better if we have a person at the helm of
government's monies who wants to succeed in the goals she has set
for herself and who is prepared to stake both her reputation, and
her job, on it.
So how can we believe things are going to be better this time
around? Kuugongelwa-Amadhila emphasised that the next financial
year would be about what she termed 'tough compromises'."There are
hard choices to be made.The next financial year will be a challenge
because finances are tight, but it is also an opportunity for us to
learn to manage our scarce resources more effectively and
efficiently", she said.Again, the prognosis is not good.The
country's debt is expected to reach 30,3 per cent of gross domestic
product (GDP) by the end of this month, representing a big increase
over the preceding year when it was 25,2 per cent.By 2005 it is
expected to reach 32 per cent of GDP.Again, not a positive sign.The
main contributors to the country's mounting debts are considered to
be a persistent domestic budget deficits as well as foreign
loans.While stressing the need for financial prudence,
Kuugongelwa-Amadhila emphasised that this could not be expected to
be done at the cost of development, and that major challenges to
the country still include tackling poverty, addressing health and
social issues as well as improving educational standards and
infrastructure.What did she propose to do about cutting Government
expenditure? The Finance Minister said that State departments would
be required to cut overtime payments among others.She also said
that vacancies in the civil service, except those deemed essential,
would be frozen.Nothing new so far.Government, she added, would
also clamp down on easy borrowing terms for parastatals and levies
would be charged on loan guarantees.Again, possibly, too little and
too late.Everyone is aware that Government had earlier set itself
the target of limiting Namibia's national debt to no more than 25
per cent of GDP.But by the end of this month, it will be over 30
per cent.And in the year ahead, it will have grown to 32 per
cent.Frugality will certainly have to be a priority in the year
ahead, but past promises not kept do not augur well, despite all
the best intentions by our Finance Minister.We do need to count the
cost of, among others, corruption.This was not mentioned by
Kuugongelwa-Amadhila, but we know it is expensive for our country
and its people.The bailing out of parastatals is another area in
which caution must be the watchword, and the cutting of massive
salaries and benefits in these State Owned Enterprises, as well as
in other areas of Government - such as travel and subsistence
allowances - are essential if we are to make any progress in
cutting back the deficit.The good news for us is the increase in
social pensions, from N$250 to N$300.It still represents a paltry
amount to live on, but is nevertheless something which should have
been done a long time ago.We sincerely hope that our new Finance
Minister, who has just introduced her maiden National Budget, will
do better than her predecessor in sticking to her promises, and
ensuring fiscal discipline from the word go.We don't hold out much
hope, given the past rather dismal record in this regard, but there
is always a chance that things will improve for the better if we
have a person at the helm of government's monies who wants to
succeed in the goals she has set for herself and who is prepared to
stake both her reputation, and her job, on it.