By Hilary Mare
FINANCE Minister Calle Schlettwein has moved to dispel notions posited by opposition leader, McHenry Venaani that the Targeted Intervention Programme for Employment and Economic Growth (TIPEEG) program implemented between 2011/12 to 2013/14 is one of the reasons why the economy is bleeding today.
Venaani’s remarks which characterised the overall impact of TIPEEG as a failure further warned government to be cautious not to make similar errors for other foreign-funded projects.
The total budget outlay for TIPEEG including public works was N$14.7 billion, with the sectoral focus on Agriculture, transport and logistics, tourism, and housing and sanitation.
In his response in Parliament this week, Schlettwein said the injection of such large funding outlay over the three-year period had positive effects on economic growth, jobs and incomes.
“Economic growth averaged 5.6 percent between 2010 and 2014. This average is significantly higher than the long term average growth rate of 3.9 percent since 1991. The annual real growth rates achieved during the TIPEEG period are one of the historic highest achieved to date.
“Gross income per capita increased by more than 60 percent, from N$38.2 billion in 2010 to N$61.9 billion in 2014. Out of this substantial rise in per capita incomes, the evidence brought about by the successive National Household Income and Expenditure Surveys between 2009/10 and 2015/16 indicate that not only per capita incomes rise significantly, but the incomes of the middle class and the bottom quartiles increased the most, hence the discernible impact on poverty reduction,” the Minister stated
Schlettwein stated that over the TIPEEG period, poverty and inequalities significantly decelerated with extreme poverty reducing from 15.4 percent in 2019/10 to 10.7 percent by 2015/16, while absolute poverty declined to 17.4 percent from 28.8 percent over the same period. Further, inequality, as measured by the Gini index, slowed from 0.58 to 0.56 during this period, the Minister said.
Out of the N$14.7 billion total allocation, N$13 billion was spent, resulting in an overall execution rate of 88.9 percent.
“While the declining path on these indices cannot be entirely attributed to TIPEEG, there is no denial that the programme has had added momentum on realising high growth and pushing back the frontiers of poverty and inequalities. Such discernible progress cannot be termed as a failure, regrettable or anything to be apologetic about,” added Schlettwein.
Furthering his defence, Schlettwein also said that over 15,829 permanent jobs were created, while the temporary jobs were in excess of 87,000 as a result of public works programs.
The TIPEEG period is the only time when such large number of jobs was created under a public works program.
“The question to be raised is whether the overall outcome of TIPEEG, positive as it is, was optimal and commensurate with the magnitude of investment made. I reiterate that the results should have been better, that the productive, industrial and digital capacity of the economy would have improved, that the outcomes are sustainable and more permanent jobs should have been created. This is the balanced context in which the outcomes of TIPEEG should be assessed,” Schlettwein further stated.
Conclusively, the Minister went onto say that: “The development budget, which was the anchor for TIPEEG, is a key anchor for fiscal policy impulse in the economy. The fiscal consolidation measures are centred on doing away with non-core operational spending and non-core projects with low growth potential. In particular, measures have been implemented under the directive by the Office of the Prime Minister to contain the wage bill through a combination of measures, including the vacancy freeze and compensatory reduction in the size of the civil service.”
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