The annual budget panel discussion hosted by Simonis Storm Securities, KPMG, NCCI and Prime Focus magazine was held on the 2nd of April 2015.
Held with the theme, “Driving growth at home” the event was moderated by Afra Schimming-Chase with the panel made up of :
Hon. Calle Schlettwein - Minister of Finance
Mr. Johannes Gawaxab - Executive Chairman: EOS Capital
Mr. James Cumming - Head of Research: Simonis Storm Securities
Mrs. Adeline Beukes - Senior Manager, Tax: KPMG
Driving growth at home
“The main poverty alleviation method that we want to embark upon is to enhance our productive capacity – make SME’s a meaningful link in any value chains that we develop”. said the Minister of Finance Hon. Calle Schlettwein. The Minister stated that the National budget 2015/16 was meant to show a recommitment of government to address the social insufficiencies of the Namibian landscape while fostering sustainable economic growth.
The panellists were given a platform to share their views on the budget in specifically focusing on the implications within the economy at large. Starting the discussions from the private perspective was Mr. Gawaxab who focused on the positive aspects of the budget by applauding government’s efforts of improving the financial charter which should help: improve access to finance, modernise the regulatory framework and improve local ownership of financial services companies. He further defended the current state of the country’s borrowing patterns while suggesting that the government has further room to extend its debt appetite in order to foster the much needed growth.
He also focused on the inherent opportunities that are being birthed with the finalisation of the private public partnerships legislature which will allow significantly larger investments to take place in Namibia. SACU revenue remains a big concern with Mr. Gawaxab highlighting that an overall drop in the region’s revenue can be expected (from N$50bn to N$37$bn) by 2020. This, he believes, will inevitably affect Namibia’s revenue line which is currently 30% dependent on this source.
Mrs. Beukes touched on the tax portion of the budget stating that few amendments were made in terms of tax legislation. She did however enquire as to government’s efforts to ease the tax administration burden of small businesses. She added that the semi-autonomous revenue agency should ensure the efficient management of the current tax base. Mrs Beukes also encouraged more consultation between government and the private sector when introducing new or changes to current tax legislation.
Mr. Cumming focused on the implementation aspects of the budget stating that despite the budget being pro-business, government has to ensure that the projects are executed in a timely manner. On a macroeconomic level, he stated that the budget deficit is mainly used to fund the development aspect of the expenditure which he reckons is a prudent way of ensuring that government’s priorities are properly aligned. This was in line with Moody’s recent credit rating report which encouraged government spending, provided it was in line with reducing poverty and increasing employment within Namibia.
In response to questions asked during the debate, the Hon. Minister commented on the procurement of services and goods and said efforts should be made to source locally produced producst. He further believes that massive projects such as the mass housing project should capitalize on the use of locally extracted raw material and locally groomed craftsmen which would induce substantial value gains into the local economy.
Also discussed during the debate was government’s spending on certain sectors that have been viewed contentious. The national budget had an allocated 11.4% on Defence and 7.5% on Safety and Security which despite being in line with MTEF, raised concerns regarding Namibia’s true priorities. The Hon. Minister addressed the spending by reiterating government’s desire to ensure that peace and stability are maintained within the country. He further alluded to the need to build a strong and local military capacity which will not only serve Namibia, but the region as well in line with the ever growing geo-political risks that have already marred several African countries. The Hon. Minister stated Namibia has been lauded for political stability with regional and global peacekeeping efforts. The Hon. Minister believes that by building reliable security networks it allows for secure growth for not only the country but also the region.
In conclusion, the Hon. Minister highlighted government’s efforts to actively engage the private sector specifically in technical matters regarding policy formation which would simultaneously improve the relationship between the two economic agents while tackling potential business bottlenecks which could hamper the nation’s path to industrialization. In attendance at the Windhoek Country club were 120 people ranging from both government officials and experts in the financial services sector.
This annual lunch was sponsored by Simonis Storm Securities, KPMG, Prime Focus Magazine and the NCCI.