Govt spins up Budget

GOVERNMENT’S finances are looking even better than was expected when Namibia’s Budget for 2006-07 was unveiled in mid-March.

Namibia is expected to realise a budget surplus of N$921 million this financial year, Finance Minister Saara Kuugongelwa-Amadhila announced yesterday when she tabled the country’s Additional Budget for the financial year ending March 31 2007 in the National Assembly. The budget surplus – the first since Independence – was projected to be N$122,5 million when the Main Budget was announced on March 16.Revenue received from the Southern African Customs Union (Sacu) has again rescued the income base of Government as a ‘shock absorber’ and sweetened the bitter medicine of N$342,01 million required for additional expenditure.Just over half of this additional spending – N$209,4 million – has already been covered under the Main Budget, and the remaining N$132,6 million needs to be financed.Most of the funds allocated under the Additional Budget represent a re-allocation of money already earmarked for spending under the Main Budget.The Additional Budget envisions that existing funds of N$190,8 million from the Prime Minister’s Office would be distributed to the different ministries and used for improved service conditions such as salary increases and allowances for civil servants agreed with the labour unions earlier this year.An amount of N$215,3 million for additional budgetary needs is redistributed among different votes, which came from savings and under-expenditure by some ministries, Kuugongelwa-Amadhila told the National Assembly, but N$132,6 million needs to be raised to cover the remaining funds required.The Minister did not say how this would be done.”This shall be comprehensively outlined in the next Budget statement for the new financial year,” she said.The Finance Ministry receives the largest allocation of N$83,2 million, followed by Education (N$65,1 million), the Public Service Employees Medical Aid Scheme (Psemas), which receives N$80 million, and the Police Department (N$32,5 million).The Prison and Correctional Services Department is to get an extra N$8,2 million.A large chunk of the budgetary cake is also going to the Defence Ministry (N$46,5 million), while the Health Ministry requires N$22,4 million more.The Namibia Tourism Board needs N$6 million to cover international marketing activities to promote Namibia as a tourism destination.On the positive side, Kuugongelwa-Amadhila said her Ministry expected a budget surplus of N$921,2 million, “which translates into a surplus of 2,2 per cent of the Gross Domestic Product (GDP)”.This higher than expected budget surplus follows on a budget deficit in the 2005-06 financial year that is now estimated to have been much lower than previously forecast, Kuugongelwa-Amadhila also announced.The actual deficit in 2006-07 turned out to be N$86 million, compared to the deficit of N$448,5 million that had been estimated in the Main Budget for that year, she said.That deficit was equivalent to “a mere 0,2 per cent” of Namibia’s gross domestic product, and was the result of an improvement in revenue collection, she said.She further announced that Namibia’s national debt, when compared to the size of the country’s economy, had declined by two per cent between the 2004-05 and 2005-06 financial years.By the end of the 2005-06 fiscal year, the country’s national debt totalled N$12,8 billion – or 32,2 per cent of GDP.This financial year, a windfall of N$321,8 million from Sacu and N$648 million from cellular phone company MTC, which sold a 34 per cent stake to a Portuguese investor, added to the positive revenue outlook.The Minister said revenue collection since April 2006 had been encouraging: “Total revenue can now be estimated at N$16,2 billion for the current financial year, N$931 million higher than originally anticipated.”Further good news is an envisaged five per cent general salary increase for civil servants planned for the 2008-09 financial year, which the Minister announced yesterday.Future effects of the agreed public service salary increases will however leave a shortfall of N$209 million in the previously set budget projections for 2007-08, and a shortfall of N$514 million in 2008-09, the Minister warned.”Following our continuous commitment to move away from additional budgets, I observed the positive trend that there were much fewer requests for additional funding (from ministries) than last year,” the Minister concluded.Debate on the budget will start next week Tuesday.The Namibian yesterday sought comment from economists, but various experts approached said they did not have the budget documents yet.CoD President Ben Ulenga said it was time for Government to stick to its goals of avoiding an additional budget.He also criticised the fact that Parliamentarians had no say in the drafting of the budget and saw it for the first time when it was tabled.”I further don’t see that the service conditions of political office bearers like Members of Parliament were considered.Opposition parties asked for travel allowances as we must pay ourselves for trips to the regions when we want to meet our voters, but that was not considered in the additional budget,” Ulenga told The Namibian.Johan de Waal of the DTA criticised the Finance Minister’s speech.He said it contained “very little information” on what the individual ministries needed the extra funds for.”We have understanding for the Police and that the lower salary grades in the civil service receive an increment.We have to see how the debate evolves, if we find out more details,” De Waal said.Since Independence there have been only two years when no additional budget was tabled.The budget surplus – the first since Independence – was projected to be N$122,5 million when the Main Budget was announced on March 16.Revenue received from the Southern African Customs Union (Sacu) has again rescued the income base of Government as a ‘shock absorber’ and sweetened the bitter medicine of N$342,01 million required for additional expenditure. Just over half of this additional spending – N$209,4 million – has already been covered under the Main Budget, and the remaining N$132,6 million needs to be financed.Most of the funds allocated under the Additional Budget represent a re-allocation of money already earmarked for spending under the Main Budget.The Additional Budget envisions that existing funds of N$190,8 million from the Prime Minister’s Office would be distributed to the different ministries and used for improved service conditions such as salary increases and allowances for civil servants agreed with the labour unions earlier this year.An amount of N$215,3 million for additional budgetary needs is redistributed among different votes, which came from savings and under-expenditure by some ministries, Kuugongelwa-Amadhila told the National Assembly, but N$132,6 million needs to be raised to cover the remaining funds required.The Minister did not say how this would be done.”This shall be comprehensively outlined in the next Budget statement for the new financial year,” she said.The Finance Ministry receives the largest allocation of N$83,2 million, followed by Education (N$65,1 million), the Public Service Employees Medical Aid Scheme (Psemas), which receives N$80 million, and the Police Department (N$32,5 million).The Prison and Correctional Services Department is to get an extra N$8,2 million.A large chunk of the budgetary cake is also going to the Defence Ministry (N$46,5 million), while the Health Ministry requires N$22,4 million more.The Namibia Tourism Board needs N$6 million to cover international marketing activities to promote Namibia as a tourism destination.On the positive side, Kuugongelwa-Amadhila said her Ministry expected a budget surplus of N$921,2 million, “which translates into a surplus of 2,2 per cent of the Gross Domestic Product (GDP)”.This higher than expected budget surplus follows on a budget deficit in the 2005-06 financial year that is now estimated to have been much lower than previously forecast, Kuugongelwa-Amadhila also announced.The actual deficit in 2006-07 turned out to be N$86 million, compared to the deficit of N$448,5 million that had been estimated in the Main Budget for that year, she said.That deficit was equivalent to “a mere 0,2 per cent” of Namibia’s gross domestic product, and was the result of an improvement in revenue collection, she said.She further announced that Namibia’s national debt, when compared to the size of the country’s economy, had declined by two per cent between the 2004-05 and 2005-06 financial years.By the end of the 2005-06 fiscal year, the country’s national debt totalled N$12,8 billion – or 32,2 per cent of GDP.This financial year, a windfall of N$321,8 million from Sacu and N$648 million from cellular phone company MTC, which sold a 34 per cent stake to a Portuguese investor, added to the positive revenue outlook.The Minister said revenue collection since April 2006 had been encouraging: “Total revenue can now be estimated at N$16,2 billion for the current financial year, N$931 million higher than originally anticipated.”Further good news is an envisaged five per cent general salary increase for civil servants planned for the 2008-09 financial year, which the Minister announced yesterday.Future effects of the agreed public service salary increases will however leave a shortfall of N$209 million in the previously set budget projections for 2007-08, and a shortfall of N$514 million in 2008-09, the Minister warned.”Following our continuous commitment to move away from additional budgets, I observed the positive trend that there were much fewer requests for additional funding (from ministries) than last year,” the Minister concluded.Debate on the budget will start next week Tuesday.The Namibian yesterday sought comment from economists, but various experts approached said they did not have the budget documents yet.CoD President Ben Ulenga said it was time for Government to stick to its goals of avoiding an additional budget.He also criticised the fact that Parliamentarians had no say in the drafting of the budget and saw it for the first time when it was tabled.”I further don’t see that the service conditions of political office bearers like Members of Parliament were considered.Opposition parties asked for travel allowances as we must pay ourselves for trips to the regions when we want to meet our voters, but that was not considered in the additional budget,” Ulenga told The Namibian.Johan de Waal of the DTA criticised the Finance Minister’s speech.He said it contained “very little information” on what the individual ministries needed the extra funds for.”We have understanding for the Police and that the lower salary grades in the civil service receive an increment.We have to see how the debate evolves, if we find out more details,” De Waal said.Since Independence there have been only two years when no additional budget was tabled.