19 Feb 2014 20:40pm
WINDHOEK, 19 FEB (NAMPA) - Namibia's economy is projected to grow above global averages, albeit moderate in line with global trends, the Minister of Finance said on Wednesday.
While tabling the National Budget for the 2014/15 financial year in Parliament, Saara Kuugongelwa-Amadhila said the Gross Domestic Product (GDP) is projected to grow by 5.0 per cent in 2014 and remain relatively flat at 4.8 per cent over the Medium-Term Expenditure Framework (MTEF) (2014-2017).
Kuugongelwa-Amadhila explained that stronger investment activity, the coming on-stream of some of the investment projects in the mineral and manufacturing sectors, and the strengthening of demand conditions in key trade partners for Namibia will account for improved pace of activity in 2014.
In particular, increased activity in the construction and manufacturing sub-sectors will anchor growth during the MTEF, while slow recuperation in mineral commodity prices and the devastating effects of the 2013 drought countrywide are expected to cause a drag on the volatile primary sector.
She said building on progress made in 2013, the recovery in the developed economies is expected to provide a basis for a global economic recovery in 2014.
For the recovery to be sustained, economic policies should be geared towards restoring the role of the private sector in the growth process and should foster productivity gains, increased employment and higher investment in the real sector.
This is important to avoid a relapse as policy support is withdrawn, she said.
On the fiscal outlook, Kuugongelwa-Amadhila noted that total revenue and grants for the MTEF is projected to increase by about 14,7 per cent annually on average.
She added that in nominal terms, revenue is projected to increase from a revised estimate of N.dollars 43,87 billion in 2013/14 to N.dollars 52,47 billion in 2014/15 and average around N.dollars 59,8 billion over the MTEF.
The minister noted that the South African Customs Union (SACU) revenue for 2014/15 is estimated at N.dollars 18,12 billion or 34,7 per cent of total revenue, which comprises N. dollars 17,31 billion from current collections and N.dollars 812 million from surplus emanating from 2011/12.
While the domestic revenue stream will contribute significantly to the expected revenue, a significant risk to the outlook derives from uncertainty regarding future SACU revenues due to ongoing reforms, she stressed.