23 November 2017

Namibia: Finance Unreliable - Opposition Leaders

Leaders of opposition political parties on Tuesday said the finance ministry has lost all credibility over its economic projections and its budgetary processes.

The opposition leaders, including Popular Democratic Movement (PDM) leader McHenry Venaani, the Rally for Democracy and Progress (RDP)'s Mike Kavekotora, the United Democratic Front (UDF)'s Themistokles 'Dudu' Murorua and the All People's Party (APP)'s Reinhold 'Madala' Nauyoma all voiced similar sentiments during the debate of finance minister Calle Schlettweein's mid-term budget review in the National Assembly.

The opposition politicians said projections in the mid-term budget review which was tabled recently by Schlettwein do not reflect the real issues on the ground.

In a statement issued yesterday, PDM parliamentarian Nico Smit said the finance ministry's loss of credibility was highlighted by this week's Fitch downgrade of Namibia to junk status, which indicated that "projections made by international ratings agencies and international financial institutions are significantly different from those made by the ministry of finance, thus diminishing the credibility of the projections of the ministry, and again calling into question the budgetary process in its entirety".

In its downgrade announcement on Monday afternoon, Fitch cited weaker-than-forecast fiscal outcomes and rising government debt as influential factors.

The downgrade came just two weeks after Schlettwein promised improved financial controls, gradual fiscal consolidation and increased economic growth.

His revised budget also states that government debt was manageable.

Smit said the finance ministry should focus on addressing the underlying structural obstacles, both in the broader economy and on the fiscal side, rather than announcing lofty promises and ambitions to Namibians.

The opposition parties also criticised the announcement of additional expenditure and rising national debt, as well as the lack of policy guidance on debt management, singling out additional expenditure on the public sector wage bill as concerning.

Although Schlettwein said the revised budget was targeted at gradual fiscal consolidation through a reduction in the budget deficit and addressed long-term stabilisation plus concerns raised by ratings agencies, many opposition parliamentarians did not agree.

The finance minister on Tuesday maintained his stance that the revised budget was geared to achieve debt sustainability.

He said the additional expenditure in the revised budget was targeted at correcting budgetary shortfalls, "which arose as a result of the front-loading of spending on the previously unreported spending arrears".

The opposition parties, however, said this week's downgrade of the country's credit rating was evidence that government was not serious about economic reforms as promised in the recently-revised budget.

Venaani and Kavekotora questioned government's inability to pay invoices on time, saying delayed payments promoted corruption and negatively impacted the economy.

They furthermore found fault with government's ability and commitment to deal with corrupt officials, including those involved in the SME Bank's collapse.

Venaani also referred to the millions lost at the Government Institutions Pension Fund (GIPF) and the SME Bank through dubious investments, adding that government needed to be tougher on corruption and mismanagement, and labelled the Anti-Corruption Commission (ACC) as "toothless and protecting bigger fish".

The parliamentary discussion became heated and descended into personal attacks and accusations when the PDM's Vipuakuje Muharukua accused Swapo MPs of defending corrupt officials.

Muharukua singled out fisheries minister Bernard Esau, Prime Minister Saara Kuugongelwa-Amadhila and land reform minister Utoni Nujoma, saying they always "jump" into discussions when corruption is mentioned.

Kuugongelwa-Amadhila responded by saying there are institutions which exist to combat corruption, including the ACC and the courts.

She said the cases of the SME Bank and the GIPF were already in the courts, and government has also implemented policies targetting corruption.

Kuugongelwa-Amadhila's claim was backed by both Esau and Nujoma, who challenged opposition politicians to provide evidence of corruption involving government officials.

Nujoma and presidential affairs minister Frans Kapofi said Muharukua was disrespecting other parliamentarians by aligning them with corruption and the SME Bank saga. Nujoma said Muharukua was "obsessed" with Kuugongelwa-Amadhila.

The Appropriation Amendment Bill will be re-read in parliament next week before being sent to the National Council for scrutiny.

The Namibian learnt that National Assembly and National Council sittings have been cancelled for the week due to the Swapo congress.

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