Schlettwein’s maiden budget welcomed
Analysts wasted no time in breaking down the budget after it was delivered by newly appointed Minister of Finance, Calle Schlettwein for the first time.
Schlettwein drew praise for his quick response to addressing new budget votes by the creation of new ministries, moderate expenditure envisaged over the Medium Term Expenditure and most notably, a notable pension increase and the introduction of free secondary education.
Expressing his view, Standard Bank Namibia Economist Mally Likukela said, “This year’s theme [No Namibian must be left out] highlights the fundamental aspiration of the government of Namibia and its people and that is to have all-inclusive growth.”
Likukela also highlighted government’s commitment to spur projects of national interest such as the Kudu-Power-to Gas project, funding for the refurbishment of the country’s rail networks, the expansion of the Walvis Bay Port and the mass housing project respectively and support for state-owned enterprises.
PriceWaterHouse Tax man, Stephen Hugo turned his attention to government’s revenue stream. He said, “As expected, no change in the tax brackets for individuals was announced. The Minister further confirmed the increase in the Value-Added-Threshold from N$200,000 to N$500,000.” Noteworthy for Hugo was the reduction in the corporate tax rate from 33% to 32%. “The minister confirmed the reduction in the corporate tax rate from 33% to 32%, as announced in the prior year, although uncertainty exists as to whether this rate will be applied retrospectively.”
Added Hugo, “The proposed taxes on commodity exports like minerals, fish and meat, will increase the tax burden for these industries.”
Stock-broking firm IJG Securities in a statement said, “We are of the view that the current budget is reasonable, particularly given the limited time to add new Ministries and the little time available to the new Minister [Calle Schlettwein] to make his mark. “We are relieved to see moderation and caution exercised in the preparation of forecasts, particularly on the revenue front. We believe that the time for fiscal belt tightening is upon us.”
IJG is expectant of a contraction in spending throughout the Medium Term Expenditure Framework and praised government’s pro-poor budget focus over the MTEF.
“We view the slowing of expenditure growth as a highly positive development, which we hope to continue in coming years as laid out in the Medium Term Expenditure Framework. We firmly agree with the four broad focal points outlined by the Minister, and commend the Ministry for their efforts to increase social pensions, a much needed and overdue initiative.”
The Institute for Public Policy Research said, “Congratulations to Minister of Finance Calle Schlettwein who in his budget statement said government will introduce a Mid-Year Budget Review and Pre-Budget Statement to be presented in October/November annually as a measure to assess budget execution and budget policy implementation as well as to further inject greater transparency in the budget process.
“This should see Namibia moving up the global Open Budget Index compiled by the International Budget Partnership with input from the IPPR.”