Sacu receipts boost Namibia’s revenue to N$90,4 billion

FINANCE and public enterprises minister Iipumbu Shiimi says Namibia expects an upsurge in revenue in the 2024/25 financial year, reaching N$90,4 billion thanks to improved receipts from the Southern African Customs Union (Sacu).

This represents 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.

“Similarly, 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 the 2023/24 financial year,” Shiimi said in parliament yesterday.

He said value-added tax (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.

“In addition to the above, the revenue estimates for 2024/25 include expected dividends of N$1,2 billion, following the anticipated dissolution of the Namibia Post and Telecom Holdings Company during the new financial year,” Shiiimi said.

He said the government coffers would also be boosted by N$500 million expected from the sale of the remaining 9% shares in Mobile Telecommunications Company.

“ Further dividends are expected from other public enterprises, notably, the Bank of Namibia, Namibia Desert Diamonds, and the Namibian Ports Authority.

“The revenue estimates also include N$1,4 billion in once-off legacy tax liabilities of selected public enterprises . . ,” Shiimi said.

The minister said revenue is expected to continue growing in the medium term expenditure framework period to average 5%, reaching N$93,6 billion by the end of the 2026/27 financial year.

“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.

“We project revenue as a ratio of gross domestic product to remain strong, averaging 29,9% over the medium term expenditure framework,” Shiimi said.

He said despite the anticipated downside risks, the government is taking a conservative approach in its forecasts.

“The revenue outlook is still clouded by uncertainties in the global and domestic economies. Nevertheless, we remain committed to maintaining fiscal sustainability and will thus approach any unanticipated revenue shortfalls in a manner that does not compromise the gains on our fiscal metrics thus far,” Shiimi said.

He said the strengthening domestic economic fundamentals and the resultant strong revenue performance have created an avenue for Namibia to increase the spending envelope to accelerate service delivery, address the most pressing needs and improve infrastructure development.

“In this context, I table before the house the 2024/25 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% from the revised estimates of the preceding year,” he said.