MINISTER of finance Iipumbu Shiimi yesterday delivered what he calls a midterm budget review coated with "cautious optimism", while teasing pensioners with a N$100 increase on their monthly grant "if resources permit".
Leaders of the opposition, however, say Shiimi tabled the balanced budget with the agenda of campaigning for Swapo.
Shiimi yesterday announced that expected revenue for the fiscal year would increase by N$4,4 billion, and expenditure also to increase by N$4 billion.
The increase in expenditure now has the revised budget at N$60,1 billion for normal operation expenditure, and N$5,5 billion for the development budget.
Shiimi said apart from the after-effects of Covid-19, the Russia-Ukraine war has also taken a toll on the local economy, although all is not lost.
The minister said the local economy will grow by 2,8% mainly on the back of good diamond mining, which is also a big source of the expected increase in expected revenue.
Other anticipated inflows are to come from company taxes, dividends, and royalties.
This is despite the minister's statement in February that the treasury was going to grow its non-tax revenue to allow businesses to recover.
The minister said although the inflow of taxes will improve, many Namibians still remain hit by the high cost of living, high interest rates, and dormant wages.
To this effect, several grants will be increased.
Civil servants' wages will increase with 3%, which will cost the treasury N$1,3 billion.
Shiimi said some grant increases will only be effected in the 2023/24 fiscal year, but the Conditional Income Grant (CIG) for former food bank recipients will be effective from this month and will increase by N$100 to N$600.
Disability grants for beneficiaries under the age of 18 will increase to N$1 300 from N$250, and old-age grants, disability grants, as well as the orphans and vulnerable children grants will increase by N$100 in the 2023/24 fiscal year.
The minister announced an allocation to the Namibia Statistics Agency to conduct a national census.
Allocations towards the Public Service Employees Medical Aid Scheme (Psemas) have been reduced by N$1 billion over a two-year period to capture expected gains from envisaged reforms to the benefit structure of the scheme.
Despite debt levels still being high, interest payments have been revised down slightly to N$9,1 billion for the fiscal year.
Shiimi said high public debt levels continue to be central in fiscal policy considerations over the medium term.
While debt redemption is important, the minister said the state was also looking at the private sector to boost more engines of growth, and the Special Economic Zone (SEZ) Policy was approved by the Cabinet in August this year.
Revamping the productivity of green scheme projects through leasing to the private sector is still ongoing, and some N$40 million has been made available to revive production activities while the leasing process unfolds.
The ministry is considering pushing up the tax threshold to N$100 000 from the current N$50 000, which has pushed low-income earners into the tax bracket.
The minister said the corporate tax rate for non-mining companies will only be reduced during the 2024/25 fiscal year to 31% and to 30% during the 2025/26 fiscal year.
Amendments to the VAT Act and Income Tax Act are currently reportedly with legal drafters, and will address items such as the zero rating of sanitary pads and pension fund contributions. These amendments have taken very long to be approved.
Shiimi said after adjustments, potential savings were identified for reallocation across votes to the tune of N$387,3 million.
The additional N$497,7 million is to settle outstanding invoices and cater for potential shortfalls on critical ongoing projects to ensure continuity and avoid further penalties on road projects.
Some N$747,4 million of additional personnel expenditure were granted for recruitment at the Ministry of Health and Social Services, and the Ministry of Education, Arts and Culture.
About N$531,1 million was allocated to subsidies and other transfers to government organisations to cover, among others, shortfalls on student funding at the Namibia Students Financial Assistance Fund and the refurbishment of locomotives for TransNamib, and N$99,3 million to purchase medical equipment to support the medical internship programme.
Shiimi said the execution rate on operational expenditure was 49,6% until September, while the development budget implementation rate, including expenditure commitments, stood at 38% by the end of September.
The total debt stood at N$136,2 billion, equivalent to 69% of gross domestic product.
'UNIMPRESSED'
Popular Democratic Movement parliamentarian Nico Smit doubts that the economy will grow with 2,8% within this financial year.
"There's no way. It is only the mining sector that picked up a little bit and the tourism sector," he said yesterday.
Smit says Shiimi keeps shifting borrowed money around.
"There's no new money actually coming. Remember, the other day they borrowed some N$1,1 billion," he said.
He accused Shiimi of trying to use the budget to campaign.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
"One can clearly see that Swapo is lining up. Already getting their footwork right . . . that they are doing something good with 'the economy is not that bad, and we are not in so much debt', but the debt is unacceptably high," he said.
Namibia Economic Freedom Fighters member of parliament Longinus Iipumbu said the country needed an upliftment as the economy is "limping".
"We thought this budget would address what we need to produce as a country, because now we are given excuses like the war in Ukraine," he said.
Iipumbu wants Shiimi to focus more on agriculture to ensure the country becomes self-sustainable.
The deputy minister of marginalised communities, Royal /Ui/o/oo, said the budget has a few challenges.
He said he believes his ministry, however, got their dues.
Shiimi also announced increases for the safety nets under the Ministry of Gender Equality, Poverty Eradicaton and Social Welfare.
Simonis Storm analyst Theo Klein yesterday said the budget was rather positive.
He mentioned corporate tax rates as some of the gains, as well as the increased tax threshold.
PwC senior partner Chantell Husselmann also said it was a positive budget review, especially considering the increases in social grants.
