Ministry to review budget allocation formula for councils

The Ministry of Urban and Rural Development is busy reviewing the current budget allocation formula for regional and local authorities to include five regional recurrent grants of education, health, water supply and rural services, executive director of the ministry Nghidinwa Daniel told The Namibian on Wednesday.

In order to guide the allocation of subsidies guided by the principles of enhanced equity, predictability, transparency, efficiency and accountability, a formula-based system has been found necessary.

“The principles and modalities on the above mentioned system are set out in an intergovernmental fiscal transfer policy, which is under development and a subject of further consultations within the government and other key stakeholders.

“In general, the policy concept proposes a grant system consisting of sectoral recurrent transfer schemes, supplemented by a cross-sectoral capital/development grant scheme,” said Daniel.

Daniel said the current system being utilised in distributing or allocating the available overall annual subsidy budget to and among regional councils considers the level of poverty in a given region as measured by the national multi-dimensional poverty index.

Other factors considered are the number of constituencies and declared settlement areas under the administration of a regional council, the total population, the vastness and distance between the regional capital and Windhoek, after due consultations with regional councils.

“For each of the sectoral recurrent grants, a detailed formula, which includes relevant allocation factors and corresponding weights, will be developed and be the basis for allocating funds to regional councils considering a number of factors such as poverty level in a region, land area, population, number of potential healthcare and education recipients, health, education and economic conditions prevailing in a region and availability and access to healthcare and education facilities,” said Daniel.

Hardap Regional Council chairperson Gersohn Dausab said it is not only the formula that requires review, but also the policies applied to determine the development budget by the National Planning Commission (NPC), and the lack of participatory budget consultations prior to the budget being tabled.

Dausab said based on the current approach, the question is who determines what the priorities ought to be for the people in a given locality?

“The policies used by the NPC are applied as one-size-fits-all across the country. Then the education policy says a child must not travel more than 10-15km to access primary or secondary school from their home. But not all towns in Hardap have senior secondary schools and the closest starts at 60km away.

“But I can’t get a senior secondary school in the home of that child because the population size does not allow me to qualify. In the northern region within a two kilometre radius, the population size is vast and they qualify,”

“The same mandate that central government has to plan, implement, monitor and evaluate, regional councils also have – so who is deciding for who now? And this rolling budget where money goes back and you lose project funding after the mid-term review must also be stopped. Funds must be left for those three years, because you kill small and medium enterprises (SMEs) like that,” said Dausab.

At a recent meeting held at Keetmanshoop by the minister of finance and public enterprises with SMEs to consult on how the mid-term review and budget to be tabled next year can support SMEs, Namibia Statistics Agency representative Junias Amadila said forms filled in by constituency development committees for budgetary allocations do not seem to be considered by the NPC.

“The amounts we request are never the amounts we receive and there will be no explanation provided also. So, why do we fill them?”

NPC national development adviser Leena Sindano said availability of funding determines the share received by all regions.

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