THE mid-year-budget review was presented against the backdrop of the historical expansionary fiscal stance and its consequences as well as the significant negative developments in the global and regional economy, a challenging macroeconomic environment and the resultant unprecedented shocks to the domestic economy.
At global level, economic growth in 2016 has been reduced significantly. After first being projected at 3.4 percent, the International Monetary Fund (IMF), in its third consecutive downward revision, has now estimated global growth for 2016 at 3.1 percent.
The Sub-Saharan African region has not escaped from the headwinds emanating from the fallout and negative spill overs from global economic, financial and trading developments, especially the low for longer commodity prices. Essentially, the Namibian economy has never before been in such a precarious situation and to rid the country of this tight economic situation, this period calls for a well-conceived and timely, resolute and consistent policy response with adjustments to the fiscus standing.
Imperatively, Government is keen to respond and among other measures Government will implement an integrated and sound macro-fiscal framework for macro fiscal projections and assessment of various policy scenarios, effect effective expenditure control measures and a fiscal risk management framework to ensure that public expenditure is contained within the budgetary and financing framework and the quality of expenditure is improved, undertake research to identify bankable investment opportunities through a sustained consultative forum with the financial services industry and other role players as a catalyst for private sector-led growth and promote efficiency in public investment and procurement through implementation of objective criteria for project appraisal, PPPs and Government procurement costs.
Further, the Government will implement credible reforms for the public sector wage bill through freezing posts, foster selective filling of vacancies to reduce the ratio of wage bill to GDP and index wage rise to levels not higher than inflation, raise revenue, deepen existing revenue sources and strengthen tax administration for increased revenue collection and diversification of revenue sources, implement public enterprise reforms and undertake research in regard to achieve the partial listing of some of the Public Enterprises, utilise public, private partnership arrangements and create a conducive environment for leveraging private capital in the development of infrastructure and provide services, and implement structural reforms aimed at promoting economic growth and social development.
It is important to note that the consolidation framework has the objective of placing national public finances on a sound, prudent and sustainable path. It is a balanced consolidation adjustment, with a supportive policy package to enhance efficiencies and quality of spending and cushion the adverse impact of expenditure cuts on growth and service delivery.
Conclusively, achieving shared goals and fiscal sustainability is a collective responsibility and retaining fiscal sovereignty is not a matter of choice.
Confidente. Lifting the Lid. Copyright © 2015