Government debt to increase

02 Apr 2015 10:00am
WINDHOEK, 02 APR (NAMPA) – Government’s guaranteed debt will be increased from the current 6.5 per cent to 11.4 per cent of the Gross Domestic Product (GDP) over the Medium Term-Expenditure Framework (MTEF) 2015/16 to 2017/18. In 2013, Namibia’s GDP was estimated at N.dollars 156 billion.
Finance Minister Calle Schlettwein announced this during the 2015 First National Bank (FNB) budget review breakfast meeting here on Wednesday.
The meeting was organised after Schlettwein tabled the 2015/2016 National Budget of N.dollars 67.08 billion under the theme, “No Namibian must feel left out”, in Parliament on Tuesday.
Government debt, also known as public debt, national debt and sovereign debt, is the debt owed by a central government.
Schlettwein explained that the increment is slightly above the agreed cap of 10 per cent of GDP, adding that financial government guarantees to public enterprises are projected to increase significantly over the same period.
The government has created the Ministry of Public Enterprises and a total of N.dollars 26 343 000 is allocated to them during the 2015/16 financial year.
Schlettwein said there are projects that require sovereign guarantees to pubic enterprises, such as the construction of a dual-carriage highway between Windhoek and Okahandja to the Road Fund Administration and the construction of national fuel storage, fuel pipeline and fuel off-loading jetty at Walvis Bay to the National Energy Fund.
Other projects include the rehabilitation and upgrading of the railway network to TransNamib and the realisation of the Kudu Gas-to-Power project in both upstream and downstream developments to the National Petroleum Corporation of Namibia (NAMCOR) and Namibia Power Corporation (NamPower) respectively.
Schlettwein added that the government is fully geared for implementing the Namibian Financial Sector Strategy, which is a long-term development strategy for the entire financial sector aimed at addressing inherent weaknesses in the financial system.
He explained that the ultimate objective is to develop a financial sector that contributes more meaningfully to the development objectives of the country.