Govt not likely to make 12% revenue

A local economist, Daniel Steinmann is of the opinion that the Government will not be able to grow its fiscus by 12 per cent in its current financial budget.

Steinmann was speaking during a presentation entitled ‘Bringing the budget deficit in line’ on Thursday night. The presentation was organised by Nedbank Namibia.The Minister of Finance, Saara Kuugongelwa-Amadhila said in her 2004/05 budget statement during March this year that government intended to reduce the budget deficit to 1,6 per cent of the Gross Domestic Product (GDP), which was largely based on an assumption that revenue would increase by 12 per cent for the current fiscal year.As a result, the debt ratio would decline to below 30 per cent of the GDP by the end of the 2006/07 financial year.Steinmann indicated that it is highly unlikely that government’s expenditure will remain within the projected framework.He said: “Government must adopt a 20-year view when addressing deficits.Government should bring deficit management into Vision 2030.”Sources of revenue in the country amongst others included tax revenue, income tax on individuals, diamond mining revenue, company taxes, dividends from parastatals, grants and loans.Renegotiating the Southern African Customs Union (Sacu) revenue share formula would lead to 3,3 per cent shrinking of total revenue for the 2005/06 financial year, Steinmann warned.He noted that government debt is a major and dynamic component of local capital market, adding that Namibia has a 14-year-old history of underestimating expenditure.”Successful implementation of the Integrated Financial Management System is the key to enable line ministries to stay within budgeted Medium Term Expenditure Framework (MTEF),” he advised.The total expenditure estimated for 2004/05 financial year is N$12,69 billion.The total recurrent expenditure for the same financial year is N$10, 52 billion.This comprises N$9,3 billion for current expenditure plus N$1,2 billion for statutory expenditure.Total capital expenditure for 2004/05 financial year is N$2, 16 billion, which is just less than 10 per cent of the total expenditure.”The growing debt of Namibia is structurally captured within Government expenditure framework.It is the most serious problem the country’s economy is facing, Steinmann added.He predicted that Government’s debt at March 31 2005 will be at N$11, 98 billion.-NampaThe presentation was organised by Nedbank Namibia.The Minister of Finance, Saara Kuugongelwa-Amadhila said in her 2004/05 budget statement during March this year that government intended to reduce the budget deficit to 1,6 per cent of the Gross Domestic Product (GDP), which was largely based on an assumption that revenue would increase by 12 per cent for the current fiscal year.As a result, the debt ratio would decline to below 30 per cent of the GDP by the end of the 2006/07 financial year.Steinmann indicated that it is highly unlikely that government’s expenditure will remain within the projected framework.He said: “Government must adopt a 20-year view when addressing deficits.Government should bring deficit management into Vision 2030.”Sources of revenue in the country amongst others included tax revenue, income tax on individuals, diamond mining revenue, company taxes, dividends from parastatals, grants and loans.Renegotiating the Southern African Customs Union (Sacu) revenue share formula would lead to 3,3 per cent shrinking of total revenue for the 2005/06 financial year, Steinmann warned.He noted that government debt is a major and dynamic component of local capital market, adding that Namibia has a 14-year-old history of underestimating expenditure.”Successful implementation of the Integrated Financial Management System is the key to enable line ministries to stay within budgeted Medium Term Expenditure Framework (MTEF),” he advised.The total expenditure estimated for 2004/05 financial year is N$12,69 billion.The total recurrent expenditure for the same financial year is N$10, 52 billion.This comprises N$9,3 billion for current expenditure plus N$1,2 billion for statutory expenditure.Total capital expenditure for 2004/05 financial year is N$2, 16 billion, which is just less than 10 per cent of the total expenditure.”The growing debt of Namibia is structurally captured within Government expenditure framework.It is the most serious problem the country’s economy is facing, Steinmann added.He predicted that Government’s debt at March 31 2005 will be at N$11, 98 billion.-Nampa