THE Appropriation Bill tabled in parliament last week, in which the social sector guzzled half of the budget, has once again showed us that President Hage Geingob’s administration is keen on reinforcing the poverty fight and provide for a growth stimulus package.
This is highly commendable given the importance of a vibrant social sector as an effective, tangible and direct conduit towards the achievement of human development objectives such as better nutrition, maternal and child health care as well as educational outcomes.
While aggregate fiscal policy is ideally embedded in a macroeconomic framework that ensures economic stability and promotes economic growth, this recent stance that proposes to devote N$28.8 billion to our social framework sets an aggregate level of spending that is consistent with the country’s overall macroeconomic goals as well as promises of the Harambee Prosperity Plan.
It remains a key developmental factor that an N$86.9 billion social sector distribution over the MTEF houses critical crucial basics fundamentals such basic Education that will receive N$13.5 billion this coming financial year, with higher education, training and innovation and health and social services receiving N$3.2 billion and N$6.5 billion, respectively.
This budget presentation further appears to place poverty eradication at the top of Government’s development agenda with the Poverty Eradication and Social Welfare Ministry being allocated N$3.4 billion, 3.7 percent more than the revised allocation for the previous year.
As avowed by Finance Minister Calle Schlettwein, there is real commitment by government to maintain the grants in real value, and given the high dependence ratio, the Old Age Pension was increased by N$50.00 per month.
Essentially, improved poverty focus requires the extension of basic services to the poor majority. With resources constrained by low growth and limited tax capacity, this can only be afforded if Governments make hard choices to reduce the cost of free or subsidised services currently enjoyed by a mainly non-poor minority.
It is imperative however to highlight that over the years, Namibia’s Achilles heels in achieving poverty reduction goals has been ineffective public expenditure management which has remained an obstacle to achievement of poverty reduction objectives.
Fragmented budgets and an exclusive focus on inputs are among the factors that have undermined the ability of our budget systems to discipline policy making and to facilitate performance feedback that would improve outcomes.
Many of the problems of ineffective budget management that undermine the ability to reorient spending towards the poor stem from political reluctance to recognise the need for tough choices and for budget discipline.
Even if budget allocations reflect poverty reduction priorities, the actual flow of resources to front line service delivery agencies determines the extent to which stated budget objectives are realized during budget execution. The flow of resources to front-line agencies can only be understood within the overall incentive framework of the budget process and the public sector as a whole.
While our budget system has always allowed for flexibility to accommodate changing circumstances during budget execution, it is also time for government to put in place more stringent measures to safeguard the need to ensure that resources are used as intended by government and approved by parliament.
Finally, as we are most likely to succeed in enacting the fundamental reforms necessary for efficient and effective outcome-oriented public expenditure management, there will be a need to pay more attention to institutionalising a poverty focus.
Confidente. Lifting the Lid. Copyright © 2015