Saara’s audacious N$60 billion budget
Finance Minister Saara Kuungogelwa-Amadila has tabled a daring N$60.28 billion budget for the 2014/15 financial year, a 26.7% increase from last year’s N$47.58 billion budget. Speaking in Parliament on Wednesday, the minister said the budget is aimed at supporting inclusive growth, human resources development and skills formation. A large chunk of the allocated resources, N$48 billion, will go towards operational expenditure representing a 29.1% increase from the N$37.18 billion allocated during the 2013/14 financial year. The money will be used mainly to finance civil servants salary increases as well as fund a job evaluation and regrading exercise that was carried out last year.
Another large chunk of the operational budget, N$9.52 billion, will be given to State Owned Enterprises (SOEs) as subsidies while the development budget allocation increased by 17.6% to N$9.58 billion, almost the same as subsidies to SOEs. Revenue for the year is projected to increase from a revised estimate of N$43.87 billion in the ending financial year to N$52.47 billion with the SACU revenue pool expected to contribute an estimated N$18.12 billion or 34.7% of total revenue. The budget deficit is projected at N$7.62 billion or 5.4% of GDP, a moderation from the 6.4% deficit budgeted for in the 2013/14 financial year. The budget deficit will be financed mainly from borrowings on the domestic market. Total debt is projected to increase from N$32.39 billion to about N$38.48 billion or 27.2% of GDP. Non-mining companies benefited from a 1% reduction in their corporate income tax rate to 32% as announced in last year’s budget while the first phase of environmental taxes will be introduced on carbon dioxide emission on tax on motor vehicles, incandescent light bulbs and motor vehicle tyres. Kuugongelwa-Amadhila said the country is still grappling with glaring social and structural economic challenges including a jobless growth trajectory with a lopsided distribution of income and resource ownership as well as a substantial skills deficit and a narrow economic base with primary commodities still serving as the engine of export led growth. The minister urged fellow politicians to act swiftly and decisively to strengthen the institutions through which public services are delivered, and to transform the structure of the economy so that all Namibians can share in the opportunities that the country offers.