Government outstanding invoices stand at a colossal N$2.2 billion
Government’s reluctance to pay for services rendered to it, has contributed to outstanding invoices amounting to N$2.2 billion according to the Mid-Term Budget Review.
Four ministries alone make up 59.6% of this amount. The ministries are; Ministry of Rural and Urban Development (N$479.3 million), the Ministry of Health and Social Services (N$347.3 million, the Ministry of Defence (N$262.1 million) and the Ministry of Finance itself with N$200 million.
The Minister of Finance, Calle Schlettwein in the Mid-Term Budget Review document said that one of the primary reasons for the cause of the outstanding invoices was a mismatch between the budgeted amounts for the projects versus what is contained in the signed contracts.
“As a result, the Cabinet made a decision that the implementation of the large projects must now be centralized at Treasury to ensure proper budgeting and funding of these projects,” Schlettwein said.
Other measures such as the implementation of the Central Procurement Board, and establishment of an Infrastructure Fund are expected to aid in the monitoring and reporting on these types of commitments.
“It is a lesson learnt and it is an event which should not be allowed to repeat itself given the undesirable implication it has on the macroeconomic stability. This implies therefore that measures have to be instituted as soon as possible to avoid future recurrence,” Schlettwein added.
Additionally, the minister stated that the awards of large projects, including the projects of state-owned enterprises and local authorities, fall under the jurisdiction of the Central Procurement Board (CPB), which would ensure that before an award is done, the entity must first prove that a particular project is fully funded.