26 February 2013

Namibia: Minister Must Be Honest With 2013/14 Budget

Photo: http://www.newera.com.na
A confident Minister of Finance Saara Kuugongelwa-Amadhila increased government spending to a record N$47.6 billion for the 2013/14 financial year.

WHEN the minister of finance, Saara Kuugongelwa-Amadhila, rises this week to table her 'estimates of revenues and expenditure' (better known as the national budget) for the 2013/14 fiscal year, it will also ring in the beginning of the end for President Pohamba's tenure as head of state and government.

In terms of Article 32(2), he is expected, however, to put in his penultimate appearance, to... "address parliament on the state of the nation and on the future policies of the government, shall report on the policies of the previous year and shall be available to respond to questions". This leaves President Pohamba with a stringent schedule - another 24 months to his next state of the nation address - to share with us his vision for this, our country because when he speaks to us next time round it will be months before the next presidential and National Assembly elections. And when the curtain comes down it will be time for redeployment to Okanghudi, the Otavi farm or both.

But then, we are ahead of ourselves as the chronology of these events is scripted in the stars and will reveal itself in the fullness of time. Our focus, for now, must be to make sense of how the figures add up in the minister's budget and to pick out the winners and losers as an indication of the priorities of President Pohamba's government.

The usual suspects receiving the king's ransom have always been education and health, followed, in recent years, by a rapidly growing expenditure on defence as well as debt servicing. Sadly, the empirical evidence of our huge investments in education and health appear not to yield the results we all desire.

Government has recently taken two decisions which may result in further increase in the cost of education and health delivery. We refer here to the implementation of Article 20 of the Constitution on free and universal (pre- and) primary education for which only N$50 million was budgeted last year. It stands to reason that full implementation of this measure alone will hike the education budget. Then, in response to public outcry on our failing health services, a presidential commission of enquiry was appointed last year to investigate and make recommendations on how to fix our health system. Logically, funds need to be appropriated to plug the holes in the provision of health. Otherwise, the whole exercise would amount to a grand PR exercise hatched to lead us all up the garden path.

In 2011, long after Parliament approved the budget, in a sudden surge of brainwave the government came up with Targeted Intervention Programme for Employment and Economic Growth (Tipeeg). It was announced that Cabinet will be in the driving seat for its implementation in order to circumvent bureaucratic gridlock and ensure quick results in clearly selected economic sectors of agriculture, transport, housing and sanitation and public works. Ours is a country which suffers a dearth of statistics, making evidence-based policy difficult. But to support the whole idea of Tipeeg someone dug up an out-of-date - 2008 to be precise - labour force survey to justify the policy intervention whose purpose was to frontally attack the stubbornly high unemployment, particularly among the youth. The 2008 labour force report pitched unemployment to be of the order of 51%. Whatever the correct level of unemployment at the date of this intervention, economists of our persuasion believe that supply-side stimulants can only be good for the economy as expenditure drives the business cycle. But this is hardly a licence for making a bonfire of hard-earned tax dollars. And therein lies the rub, for the three-year Tipeeg period comes to an end with the budget to be tabled this week.

During last year's budget session, the finance minister told us that only 9 362 jobs were created by Tipeeg. She was being disingenuous by saying that the budget overall created 26 960 jobs and that since Tipeeg was now an integral part of the budget we should consider them all Tipeeg outcomes. She was not only being naughty but knew pretty well that she was not being truthful. At the end of the 2013/14 cycle she needs to give a complete account of where the entire N$14.7 billion has been spent project by project, complete with the jobs created. After all, this is supposed to be one of President Pohamba's legacy projects!

She needs to assure us too that the Tipeeg adventure, which widened both the government deficit and sovereign debt, was worth our while. We shall also keenly be watching that the budget tabled this week reflects both the spending priorities as well as the developmental direction charted by NDP4 [fourth National Development Plan].

If all these do not work in tandem, speaking the same language, what the heck is the reason for all the labour put into them?

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