Budget 2024

“As such, the need to cultivate a conducive environment to support economic activities and encourage the development of nascent industries remains very urgent,” he said.

“We should carefully balance between our very real, very urgent, and very large spending requirements and putting something aside to leave a better country to the future generations,” he said. 

Shiimi cautioned to safeguard the fiscal gains the government has made over the past few years by utilising the window of opportunity presented by the strengthening economic activities to rebuild their fiscal buffers and spend our resources sparingly. 

Shiimi said the stable economic platform allowed the government room to channel resources to provide for the most urgent needs in the social sectors, increase outlays towards investments in infrastructure while providing some relief to households and corporates alike. 

“Furthermore, we maintained a careful balance to ensure that we can meet our upcoming debt obligations as we persist with the fiscal sustainability imperative,” he said.

The Electoral Commission of Namibia (ECN) has been allocated a total of N$438,0 million.

The Justice ministry receives N$674,3 million, Ministry of Urban and Rural Development to get N$2,6 billion as well as Office of the Prime Minister will remain steady at N$1,1 billion with provisions to the tune of N$700 million has been made to cater for drought relief in the event the 2024 rain season disappoints.

The Anti-Corruption Commission has been allocated N$106,0 million, Home Affairs, Immigration, Safety and Security receives N$7,4 billion and the Judiciary has been allocated N$445,5 million. 

“Accordingly, we have distributed the corresponding information regarding the utilisation of the Contingency Fund during the current financial year. In addition, a total of N$250 million is provided for in the Contingency Fund to cater for unforeseen emergencies in FY2024/25,” Shiimi said.

“A total of N$212,0 million has been budgeted for the Meat Corporation of Namibia (MeatCo), inclusive of the settlement of their contingent liabilities. Meanwhile, N$300 million has been provided for TransNamib to support their day-to-day operations cognizant of significant infrastructure and operational challenges. N$88 million has been allocated for the completion of the Luderitz Waterfront project. Furthermore, we have availed N$77,0 million to Agribank for a dedicated subsidy program to support farmers whose operations have been adversely affected by drought conditions,” he said.

Shiimi’s Ministry of Finance and Public Enterprises has been allocated a budget of N$8.1 billion for Public Servants Medical Aid Scheme (PSEMAS) and more than N$700 million in transfers to public enterprises.

“The increased allocation is meant to improve capacity at the ministry, especially in the Petroleum Affairs Directorate in light of the upsurge in exploration activities in the Orange basin. Furthermore, the development budget of the ministry has more than doubled, with N$131,0 million availed to fast-track rural electrification and improve access to electricity countrywide,” Shiimi said. 

“In this context, funding has been allocated to the Equipment Aid Scheme, Start-Up Namibia and EMPRETEC Namibia to facilitate domestic trade activities and build domestic entrepreneurship capacity especially for SMEs,” he said.

The Ministry of Industrialisation and Trade received N$365,5 million in support of SMEs and domestic economic activities.

The Agriculture and Land Reform budget is a total of N$1,9 billion. 

“This includes N$50 million dedicated for land purchase to address the plight of generational farm workers as well as N$87 million for the improvement of animal health and marketing in communal areas. Provisions have also been made for improving food systems as well as the Green Scheme programme including Phase II of the Neckartal Dam Irrigation Project, among others,” he announced.

“Inclusive of projects funded through external loans, has been allocated to the sector ministries responsible for carrying out the construction of infrastructure and implementation of economic policies,” he said. 

Shiimi said to address the slow infrastructure development, a total of N$20,9 billion in FY2024/25 and some N$58,9 billion over the MTEF. 

The Ministry of Health and Social Services will receive N$10,9 billion and a sum of N$34,3 billion over the MTEF. 

“The additional allocation includes N$200 million to the Namibia Student Financial Assistance Fund (NSFAF), bringing their total allocation to N$2,3 billion and a total of N$7,1 billion over the MTEF. Furthermore, we have provided N$108,3 million for a 5,0 percent salary increment for Unam staff,” he said. 

Shiimi said the higher education ministry has been allocated N$4.8 billion in FY2024/25, 13,0 percent higher than the preceding year. 

“This includes N$29,5 million for preparatory activities to enable us to host the Region 5 Youth Games in May 2025. In addition, N$124 million has been provided in the development budget for, among other, upgrading of the Independence Stadium as well as various sports facilities and multipurpose youth centres across the country,” he said.

Shiimi said sport’s operational budget promotion programmes get an additional N$100 million.

Shiimi said youth and national service has increased by 45,3 percent to N$679,4 million in FY2024/25 and a total of N$2,2 billion over the MTEF period.

Shiimi said they have made provision to increase the frequency of food distribution to marginalised communities at a cost of N$170,0 million, and N$284,5 million to ensure full coverage of the orphan and vulnerable children grant.

The Ministry of Gender, Poverty Eradication and Social Welfare has increased by 23,2 percent to N$8,0 billion. 

Sin tax update taking effect on 22 February 2024:

  • • 340 ml can of beer increases by 10c
  • • 750 ml bottle of wine goes up by 18c
  • • 750 ml bottle of spirits will increase by N$3,90
  • • 23 gram cigar goes up by N$5,47 and
  • • pack of 20 cigarettes, the duty rises by 98 cents

“Accordingly, the exempt level will be lifted from N$600 000 to N$1,1 million. Moreover, the threshold to trigger the transfer duty rate of 8 percent will be increased to N$3,15 million effective in FY2024/25,” he said. 

“In this regard, a capital depreciation allowance of 10 percent each year will be applicable on the costs of buildings erected, added to, extended or improved and which are used for trade purposes,” he said.

Shiimi hopes that these reforms will yield additional taxes of more than N$600 million per year. 

The minister plans to amend the law to remove nonresident shareholder tax exemption for foreign insurance company shareholders and provide for taxation of shareholders activities like other businesses. 

“This change takes effect in FY2024/25 and is projected to yield additional revenue of N$180 million per year,” he said.

“Nonetheless, to maintain tax neutrality, this reduction will be undertaken alongside broadening the corporate income tax base by: replacing the 3:1 thin capitalisation ratio with a 30 percent limit on interest deductions; capping assessed losses carried forward at five years for normal companies and 10 years for companies operating in the natural resources sectors; and introducing a 10 percent dividend tax effective on 1 January 2026 to address the existing disparity in the investment arena where dividends paid to non-resident shareholders is subject to tax,” Shiimi explained. 

Shiimi said non-mining company tax rate will be reduced by 2% points during the MTEF. 

“Accordingly, the tax rate will be reduced to 31 percent effective on 01 January 2024, with a further reduction to 30 percent taking effect on 01 January 2025,” he said

He said the government will increase the threshold for income tax on individuals from the current N$50 000 to N$100 000. 

“This action will result in an injection of N$646,0 million directly into the pockets of taxpayers. Effectively, all individual taxpayers will be exempted from paying tax on the first N$100 000 of their income as from 01 March 2024. In this respect, the revised tax tables will be published accordingly,” he said.

Shiimi said they have set aside N$2,2 billion in FY2024/25 including N$1,1 billion in loan funded projects to address the country’s water needs. 

To implement the National Housing Policy, the government will allocated a total of N$700 million to the informal settlements upgrading, massive land servicing and other programmes to improve access to housing opportunities nationwide.

The government will give N$970 million to the Ministry of Education, Arts and Culture to cater for the construction and renovation of classrooms and other school infrastructures. 

“In this context, critical sections of the national railway line are in a state of disrepair and will thus enjoy attention from a funding perspective over the MTEF. In this regard, a total of N$6.6 billion is earmarked for the railway network development over the MTEF. These allocations are further complemented by operational funding, a dedicated loan facility to purchase rolling stock as well as ongoing efforts to improve governance at TransNamib,” he explained.

Shiimi said N$2,5 billion will go towards railway infrastructures, consisting mainly of N$1,9 billion for the upgrading of the Kranzberg-Otjiwarongo railway section and N$488 million for the rehabilitation of the Sandverhaar-Buchholzbrunn railway section in the south. 

“As customary, the detailed borrowing plan for the issuance of domestic securities will be disseminated to market participants before the commencement of the new financial year,” he told parliament.

“Therefore, the fiscal framework provides for specific measures to maintain public debt on a reduction path and ensure that debt is raised in the most cost-effective manner,” he said.

“This is inclusive of N$3,2 billion in grant-funded and loan-funded projects to improve infrastructure through various ministries,” Shiimi said. 

“I would like to emphasise that this is an exceptional once-off exercise to clear the legacy debt of public enterprises accumulated prior to the establishment of NamRA. This action is undertaken to enable NamRA to apply the law to all taxpayers equally. Should any public enterprise accumulate tax liabilities going forward, the Treasury is not prepared to offer any support,” he said.

He thanked civil servants for being patient and waiting for this increase. 

The operational budget includes N$1,4 billion in once-off legacy tax liabilities of selected public enterprises. 

“This includes those enterprises whose funding was severely reduced due to fiscal consolidation in previous years,” he said. 

He named these enterprises: the University of Namibia (Unam), TransNamib, the

Namibia Broadcasting Corporation (NBC), the New Era Corporation, the National Fishing Corporation of Namibia (FishCor) and the Roads Contractors Company (RCC).

Shiimi said over the MTEF period, revenue growth is projected to average 5,0 percent reaching N$93,6 billion by the end of the financial year 2026/27. 

“In the outer years, the revenue projections incorporated cautious estimates of SACU receipts as well as a moderate increase in domestic revenues aligned to our positive growth expectations,” he said.

Shiimi tabled a budget of N$100,1 billion. 

“This total expenditure includes N$3.2 billion in development projects funded through external loans and grants as well as N$12,8 billion in interest payments. On balance, the total budget has increased by 12.4 percent from the revised estimates of the preceding year,” he said.

The minister estimated total revenues of N$90,4 billion for the 2024/25 financial year, an increase of 11,5% from the revised estimates of the previous year. 

“The substantial boost to revenues stem from a positive adjustment in SACU receipts, which is estimated at N$28,0 billion, significantly better than our initial projections,” he said.

Shiimi said several domestic revenue streams have also been revised upwards.

“In this context, income tax on individuals is estimated to increase by N$1,3 billion over the revised estimates of FY2023/24, VAT is estimated to increase by N$1,7 billion while non-mining company taxes are estimated to increase by N$759,4 million over the same period,” he explained.

“Consequently, the remaining one-third of the bond (US$250 million) will be refinanced utilising the most cost-effective instrument in the next financial year, cognisant of the prevailing high interest rate environment and the need to manage debt servicing costs,” Shiimi said.

Shiimi reported that the past years of difficult economic conditions have culminated

in a slowed pace of public investments as evidenced in a persistently small and falling development budget.

“This will ensure that we minimise a potentially significant future drain on resources that are desperately needed for infrastructure development, poverty reduction and combating climate change, among others,” he said. 

Shiimi asserted that government cannot achieve sustainable job creation without the support of private businesses, including Small and Medium Enterprises (SMEs). 

“As such, the fiscal framework considered the requisite interventions to create a conducive operating environment to enable the private sector to expand domestic investments,” he said.

Shiimi told parliament that 92% of the budget was spent by the end of January 2024. 

“Cognisant of potential overspending, interest payments are revised upwards marginally by N$78.4 million,” he said.

The minister said they have secured N$10,4 billion equivalent to 80,4% of the total funding requirement, which was secured over the same period. 

“Consequently, the total debt stock stood at N$151,3 billion, equivalent to 61,3 percent of gross domestic product,” he said.

“The preliminary out-turn at the end of January 2024 stood at N$54,1 billion. This is equivalent to 70,7% of the revised expenditure numbers presented in the financial year 2023/24 mid-year budget review,” he said.

“The dividends underperformed primarily due to a significant decline in global diamond prices over the period, which has adversely affected the financial performance of the NamDeb Group over the medium term,” Shiimi said.

“We have noted particularly strong collections in the revenue categories of corporate income tax with a collection rate of 109,6%, value-added

tax, which recorded an 89,7% collection rate as well as withholding tax on services and tax on royalties, which both stood at 130% of estimated revenue over the period,” he said.

“In this context, revenue collections stood at N$72 billion, translating into a collection rate of 90,6% over the first 10 months of the financial year. This is significantly higher than the corresponding historical average,” he said. 

“This exercise subsequently shifted the global expenditure ceiling for the financial year 2023/24 upwards to N$89 billion,” he said. 

Shiimi said initial indicators at the end of January 2024, show strong and improving fiscal fundamentals, driven by strong revenue growth due to an improved tax administration as well as domestic economic recovery.

“Similarly, the latest data prints for January 2024 showed a continued downward trend in prices with an annual inflation rate of 5,4%,” he said. 

Shiimi believes that over time, the inflationary pressures are expected to subside.  

“Although the speed of moderation remains largely dependent on the performance of the exchange rate and global commodity price developments, among others,” he said.

The conducive environment will facilitate a faster emergence of new engines of growth, especially in sectors with potential to create high-quality jobs, Shiimi explained.

The main factor for the positive outlook is the mining sector. “The strong economic activities largely reflect recovery in the traditional engines of domestic growth, particularly the mining sector which is highly capital intensive,” Shiimi said. 

“In addition, sentiments have also broadly improved across many other sectors

of the economy, such as tourism, transport and storage, financial services,

and electricity generation,” Shiimi said.

Shiimi said Namibia’s outlook has largely improved as stated by the Namibia Statistics Agency. 

“In this regard, we estimate GDP growth at 5,6%in 2023 before moderating to 4% in 2024 and 3,9% in 2025,” he said.

The minister said for Namibia’s economy, muted commodity prices present a significant risk for domestic production and export earnings, particularly for the diamond subsector.

Shiimi said the global growth remains below the historical average, weighed down by elevated interest rates to curb inflationary pressures, low productivity, as well as limited fiscal support due to high debt levels.

Shiimi said the government is supporting schools and developing them for the pupils. 

The minister recounts his visits to three Windhoek schools, namely Mix Primary School, Augustineum Secondary School and Havana High School where renovations were done. 

“At Havana High School I was joined by my team and Namra. Staff members gave us a brief history,” he said. 

Shiimi learned during this briefing that the school was filled with tents a few years back. 

“At Havana [school] you can see government funds put to good use,” he said.

Finance minister Iipumbu Shiimi says they are continuing the legacy of president Hage Geigob by caring for the Namibian child.

McHenry Venaani, the leader of the official opposition, questions the minister of mines and energy about allegations that Hyphen Hydrogen Energy, the preferred bidder to set up the country’s largest green hydrogen project at Lüderitz, has not been able to acquire the required funds to get the project off the ground. 

Shiimi was accompanied to parliament by pupils today.

“It’s all about supporting the Namibian child. We are also making provision to ramp up our investment in infrastructure and taxpayers and be able to give them some relief because inflation has been increasing,” Shiimi said.

Finance minister Iipumbu Shiimi says he is looking at how they can support the economy and ensure that they provide resources to the needy sectors such as education and health, but particularly education. 

PARLIAMENT … The speaker of parliament, Peter Katjavivi, has arrived in the parliament chamber for the tabling of the national budget for 2024/25. Photo: Shania Lazarus

The National Assembly is filling up ahead of the budget announcement.

ARRIVAL … National Assembly speaker Peter Katjavivi and minister of finance and public enterprises Iipumbu Shiimi have arrived at parliament for the tabling of the 2024/25 national budget. Photo: Donald Matthys

Good afternoon.

Big afternoon ahead as finance minister Iipumbu Shiimi is expected to deliver his 2024/25 budget speech at 14h30 in the National Assembly.

Stay with us as we take you through our blow-by-blow coverage right here.

We will also go live at parliament before and after Shiimi’s speech as we speak to parliamentarians and analysts, among others.

We will share the links here once we are live on our Facebook page.

In the meantime, here is a look back at last year’s budget announcement:

These are some of the previews we have done so far in the run-up to today’s proceedings:

And here:
And here:
Here are some of your expectations for the budget according to your social media reactions:

Boston Tedd Swartbooi says the government must support the ministry of trade and industry. He says small and medium enterprises need business start-up capital or equipment from the government.

Frans Hikia Vansuide says the monthly old-age pension must be increased to N$3 000. He also wants new schools to be built countrywide to tackle the high rate of unemployed graduate teachers.

He further says the health sector needs to have artisans at all state hospitals to do maintenance.

Justina Absalom says he wants a N$3 400 monthly pension for the elderly and a N$1 350 child grant. “That’s the only reason why I’m still asking God why he took our president (Hage Geingob) early.”

Klaas Swartbooi says the health ministry needs critical interventions. He also wants the budget of the Anti-Corruption Commission reduced. “It’s a joke, prioritise developmental initiatives.”

First_child06 says the health ministry needs enough beds, mattresses and linen for patients. “We don’t want to hear stories of no stock.”

Joaqina Domingo saysfunding should mostly be allocated to the ministries of education, health and agriculture. “Make agriculture meaningful by making use of our land by growing crops and focusing on meat products to allow employment.”

Justine Oaes says the focus should be on creating employment through sustainable projects, as prolonged hardships like unemployment and food scarcity contributes to mental health conditions like depression and anxiety.

Institute for Public Policy Research executive director Graham Hopwood says there is a need for accountability from various ministries on their spending.

He says there have been reports about wastage of funds. 

Hopwood says each ministry should provide a public accountability report on where money is being spent so that they ensure it is being spent correctly.

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