SLOW execution of Government projects, coupled with Sacu income and better collection of revenue, meant that Namibia’s deficit at the end of October was only 0,7% of its gross domestic product (GDP), Bank of Namibia (BoN) Deputy Governor Ebson Uanguta said yesterday.
However, the BoN expects Government to speed up expenditure during the remainder of its financial year, which concludes at the end of March, and the central bank is sticking to its forecast that the budget deficit for 2012-13 will be 4,6% of GDP.
Commenting on why ministries are dawdling to spend their development budgets, Uanguta said the issue of slow execution is “not a new phenomenon”. The Fourth National Development Plan (NDP4) has measures in place to counter the problem, he said.
“But it will not happen overnight,” Uanguta said.
Income from the revenue-sharing pool of the Southern African Customs Union (Sacu) boosted foreign reserves during the third quarter on 2013, he said. By the end of October, Namibia’s stock of international reserves were US$1,7 billion, or N$15,1 billion.
Sacu income for the quarter were N$3,5 billion and the BoN expects about N$14 billion in Sacu receipts to flow into state coffers during the 2012-13 fiscal year. Looking at the Namibian economy as a whole, Uanguta said the BoN maintains its growth forecast of 4,6% for 2012-13, which will be slightly lower than the 4,8% per cent last year. For 2013-14, the BoN estimates economic growth of 4,3%.
The subdued forecast is based on the global economic outlook. The world’s economy remains fragile and this will impact on Namibia, Uanguta said.
Domestic economic growth for 2012-13 will be driven by the primary sector, especially mining, he said.
“In addition, the secondary industry is also expected to contribute to this growth, supported by construction activities. Despite slowing down, growth in the tertiary industry will be driven by activities in the wholesale and retail, as well as the transport sectors,” Uanguta said.