All eyes on the mid-term budget review
IMF urges fiscal consolidation
At the previous mid-term budget review for the financial year 2021/22, a total of N$2.2 billion was made available for reallocation.
Finance minister Ipumbu Shiimi will table the mid-term budget review for the financial year 2022/23 next week Tuesday. In February, N$70.8 billion was budgeted for the current financial period.
At the previous mid-term budget for the financial year 2021/22, a total of N$2.2 billion was made available for reallocation.
According to Shiimi’s budget statement for the current financial year, N$59.7 billion was expected to be obtained from government revenue and grants. That means N$11.1 billion was going be sourced elsewhere.
In addition, the public debt stock was expected to increase to N$140.2 billion, equivalent to 71.0% of gross domestic product (GDP). The deficit was estimated at 5.6% of what the country produces.
Interest payments were projected to increase to N$9.2 billion in the current financial year.
The International Monetary International Fund (IMF) recently urged the government that implementing a fiscal consolidation strategy is crucial to preserve debt sustainability.
That includes, containing the wage bill, advancing the reform of state-owned enterprises, and strengthening tax administration is key. Civil servants recently received a salary increment of 3%.
Expectations
Danie van Wyk, head of research at IJG Securities expect the mid-year budget to be broadly similar to the one tabled in February this year.
Early figures from the Namibia Revenue Agency (NamRa) show that revenue collection seems to be in line with the target for the fiscal year, with the collection agency having collected N$25 billion during the first five months. Total revenue collection for the year is expected to come in at N$59.68 billion. “We therefore do not foresee major revisions to the budgeted figure,” he pointed out.
The civil servant salary increases which were announced in August were not budgeted for in the beginning of the year. “The increases are estimated to cost the government N$1.2 billion, and we anticipate Tuesday’s budget to give some additional clarity on how this will be funded. We know that the ministries were told to find savings within their current budgets to make funds available for the increases, and we therefore expect to see some adjustments to the expenditure votes,” van Wyk said.. [email protected]
At the previous mid-term budget for the financial year 2021/22, a total of N$2.2 billion was made available for reallocation.
According to Shiimi’s budget statement for the current financial year, N$59.7 billion was expected to be obtained from government revenue and grants. That means N$11.1 billion was going be sourced elsewhere.
In addition, the public debt stock was expected to increase to N$140.2 billion, equivalent to 71.0% of gross domestic product (GDP). The deficit was estimated at 5.6% of what the country produces.
Interest payments were projected to increase to N$9.2 billion in the current financial year.
The International Monetary International Fund (IMF) recently urged the government that implementing a fiscal consolidation strategy is crucial to preserve debt sustainability.
That includes, containing the wage bill, advancing the reform of state-owned enterprises, and strengthening tax administration is key. Civil servants recently received a salary increment of 3%.
Expectations
Danie van Wyk, head of research at IJG Securities expect the mid-year budget to be broadly similar to the one tabled in February this year.
Early figures from the Namibia Revenue Agency (NamRa) show that revenue collection seems to be in line with the target for the fiscal year, with the collection agency having collected N$25 billion during the first five months. Total revenue collection for the year is expected to come in at N$59.68 billion. “We therefore do not foresee major revisions to the budgeted figure,” he pointed out.
The civil servant salary increases which were announced in August were not budgeted for in the beginning of the year. “The increases are estimated to cost the government N$1.2 billion, and we anticipate Tuesday’s budget to give some additional clarity on how this will be funded. We know that the ministries were told to find savings within their current budgets to make funds available for the increases, and we therefore expect to see some adjustments to the expenditure votes,” van Wyk said.. [email protected]
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