THE national treasury has indicated that the Namibian government expects to receive over N$603 million in dividends in the current fiscal year.
This is, however, expected to be sourced from only four entities – despite the state having a stake in or full ownership of 28 commercial entities.
The 2021/22 national budget documents provide a glimpse of what the government collects, and also what it projects to collect in the future.
The documents still show that the usual entities who bail out the state are expected to continue doing so, even this year.
Seriously flawed revenue collection methods also seem to be prevalent. In one instance, the ministry of agriculture only expected an inflow of N$100 in auction fees.
As an alleged cash cow for the state, the Namibia Post and Telecommunications Ltd (mainly MTC) is expected to distribute N$320 million this year.
It is normally the only state-owned entity which declares massive dividends.
Namdeb, another entity in which the state has a 50% stake, is expected to dash treasury N$203 million, while the Bank of Namibia is projected to distribute N$68 million.
The other entity is the Namibia Reinsurance Corporation, which is expected to give the state a N$10 million share. The four entities make up the N$603 million expected inflow.
Tabling the national budget last week, minister of finance Iipumbu Shiimi said government revenue is nosediving while expenditure continues to rise.
When government revenue drops, it pushes up public debt and the government relies on entities that could fill that gap by operating at a profit and could therefore reduce the burden on the state’s coffers.
State revenue for the 2021/22 fiscal year is estimated to be a mere N$52 billion.
This is N$6 billion less than the N$58 billion collected a year ago.
Shiimi said the drop in revenue was largely due to the expected contraction in Southern African Customs Union receipts, as well as reduced economic activity in the country, which in turn reduces the amount of taxes that could be collected.
However, state-owned companies that could also add some muscle to state coffers mostly remain unprofitable.
For the 2019/20 fiscal year, over N$1,2 billion was received in dividends from the four public entities and about N$756 million in the last fiscal year.
It is unclear why the treasury expects such a small amount this year.
Of the N$52 billion in revenue inflow, N$48 billion is expected to flow from taxes and N$3,4 billion from non-tax revenue.
Reacting to the budget presentation this year, PSG Namibia’s head of research, Eloise du Plessis, said the much-delayed Namibia Revenue Agency, NamRA, stands a chance to help the government meet its revenue targets.
Email: lazarus@namibian.com.na
Twitter: @Lasarus_A
