The central government's budget deficit is estimated to narrow during 2019/20 when compared to the preceding fiscal year, which is mainly due to an increase in revenue as a result of higher SACU receipts.
And the deficit is expected to decline even further over the Medium-Term Expenditure Framework (MTEF) period, as was reported in the Bank of Namibia quarterly bulletin for December 2019.
"During the mid-year budget review in October 2019, the central government deficit as a percentage of GDP was estimated at 4.1 percent, the same as the earlier estimate in the main budget in March 2019. However, this was lower than the actual 2018/19 financial year deficit-to-GDP ratio of 4.8 percent, and is estimated to decline further to 2.8 percent over the MTEF period," it reported.
Government expenditure is estimated to rise during the fiscal year 2019/20, compared to the previous fiscal year. During the recent mid-year budget review, government expenditure was estimated at N$66.6 billion, similar to the estimate in the 2019 main budget, and it is further projected to gradually increase over the MTEF period.
The report further stated that this estimate is slightly higher than the N$65.1 billion registered during the fiscal year 2018/19. Meanwhile, an amount of N$1.2 billion was re-allocated under the mid-year budget review to cater for shortfalls in some government offices/ministries or agencies that could otherwise not wait for consideration under the next budget.
These funds were re-allocated from different votes that had recorded saving or underspending, predominantly the development budget. Additionally, the re-allocations were for operational expenditure mostly to cater for the shortfalls in the social sector.
Adding to that, the "central government revenue is estimated to rise during the fiscal year 2019/20, compared to the previous fiscal year, as a result of higher SACU receipts. Central government revenue is estimated to rise by 4.5 percent to N$58.4 billion during the 2019/20 financial year. This is mainly due to higher SACU receipts which are set to rise by 8.9 percent to N$18.9 billion during the 2019/20 financial year, compared to the previous fiscal year."
Moreover, over the MTEF period, government revenue is projected to increase to N$61.8 billion by fiscal year 2021/22 mainly due to higher anticipated tax revenue collections, including SACU receipts.