Minister of finance Iipumbu Shiimi is set to table the 2024/25 budget this month.
This is a critical opportunity for the government to lay out a roadmap for sustained growth and equality.
The 2024/25 budget should focus on protecting and driving the recovery of lives and livelihoods of Namibians, rebuilding resilience of the economy and catalysing socio-economic reform.
With this in mind, we expect a change in policy direction focusing more on youth empowerment, essential services and agriculture and tax reform to address unemployment.
Furthermore, human capital development, covering education, health and green hydrogen technologies are projected to take the largest share, followed by security, integrated transport infrastructure, services and agriculture.
Recognising and correctly valuing the performance, critical importance and increasing role of agriculture in economic development have important implications for public sector budgetary allocations and actual expenditures in agriculture, which continues to be low and inadequate.
It needs to be recognised, however, that as Namibia moves from a stage of agriculture-based development, either the percentage share of primary agriculture or the percentage share of expanded agriculture to gross domestic product (GDP) would decrease significantly.
This is because other sectors of the economy, especially the service sector, becomes much more dynamic.
At the same time, more needs to be done to increase rural living standards, reduce regional income differentials and lower the rate of rural-urban migration, while concomitantly increasing agricultural production and enhancing Namibia’s food and nutrition security.
RURAL DEVELOPMENT STRATEGY
The government should implementing a rural development strategy with focus on large modern farmsand family farming.
To make this shift, regulatory reforms lay out a framework for attracting private investment to the agricultural sector, while enhancing access to finance and responsiveness.
Agricultural production must increase accordingly to meet socio-economic and food and nutrition security issues.
The adverse effects on land resources and climate change must be countered with continued efforts to increase inputs and sustainable climate smart practices, protecting agricultural land against fragmentation, erosion, degradation and shifting production towards higher-value products while introducing land-saving technologies.
Furthermore, the budget should focus on youth empowerment.
Positive youth development programmes provide young people with the skills needed to adapt to future economic trends.
Young people must be well prepared with regards to the right information, skills and mindset so they can take advantage of the changing world of work.
Positive youth development programmes have the potential to unleash economic participation of young people and their families and communities.
Namibia should develop national action plans specifically targeting youth employment.
This could involve establishing enterprise incubation programmes and infrastructure projects that train young individuals.
Encouraging private operators and educational institutions to participate is also essential.
GREEN HYDROGEN AND OIL
Moreover, the upcoming budget should address green hydrogen and oil discoveries.
These are biggest challenges and opportunities which Namibia will facing to develop and demonstrate competencies.
An increase in investment in the sectors will ultimately lead to better development and more jobs.
It is also crucial for the government to support the sectors to enable the promotion of a hydrogen economy.
By building strong institutional capacity and promoting local content development, Namibia can lay the foundations for an oil industry that benefits its people and contributes to long-term national prosperity.
Tax reform is another area in which markets will be hoping for change.
Currently, businesses pay taxes on their profits, but shareholders are also taxed on their dividends, resulting in double taxation.
Changes to rectify this anomaly can be awaited, with reforms to make dividends tax-free for shareholders.
Furthermore, the pension payout tax percentage must be revisited.
Tax reforms would create resilience against uncertainty and higher inflation.
Namibia could cut taxes to encourage investment, or at the very least not raise them.
Improving governance and enacting policies would help safeguard limited resources.
All sectors of the economy need attention and resources to ensure the delivery of essential services to the people and stimulate growth.
The industry, as well as people of the country, have high expectations of this budget in terms of focus areas.
It is expected that the 2024/25 budget would address the policies and measures towards sustainable development, boosting exports and promoting a green economy.
We cannot ignore digital transformation.
The focus on these sectors is expected to help drive economic growth and create employment opportunities, while also reinforcing the government’s commitment to providing a better quality of life for all citizens.
- Josef Sheehama is a banking industry professional with 20 years’ experience. He writes in his personal capacity.
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