Namibia will survive drop in SACU revenue

28 Sep 2015 18:00pm
WINDHOEK, 28 SEP (NAMPA) – Finance Minister Calle Schlettwein will table the Medium-Term Budget Policy and Budget Review proposals in Parliament at the end of October 2015.
The review will allow Government to identify internal savings during the current fiscal year (2015/16), Schlettwein said in a statement issued on Monday.
He explained that the review will further allow the government to align the outer years of the Medium-Term Expenditure Framework (MTEF) to the revised macro-fiscal outlook.
Government has already commenced with the Mid-Year Budget Review, in line with the commitment made during the tabling of the FY2015/16 Budget.
“I thus invite the public to embrace the Mid-Year Review as a platform for enhancing the quality and targeting of expenditure, greater openness and participation in the budget process so that the input provided feed into the formulation of the budget and MTEF for the ensuring year,” he said.
The government expansionary fiscal policy for the past years has supported the growth of the economy, provision of increased services to more Namibians and creation of jobs, especially in the public infrastructure development and construction sector.
The minister however said the government is cognisant that prolonged fiscal expansion has exerted pressure on the stock of international reserves held at the Bank of Namibia (BoN) and also, to some extent, on the liquidity position in the domestic market.
Schlettwein further noted that the country's revenue from the Southern African Customs Union (SACU) has come under strain due to the weak growth and prospects of the South African economy.
Adjustment in SACU’s revenue means that Namibia is likely to bear the consequences of a negative adjustment in the next financial year. According to the minister, the outlook will only improve moderately, based on the growth prospects of SACU economies, especially South Africa.
“I wish to state that it is not the first time that volatility in SACU revenue has occurred,” he noted.
Schlettwein observed that Namibia has, however, been able to navigate through the effects of such volatility, adding that it is the country's plan to do so going forward, through expanding and deepening the domestic revenue base and most important, accelerating the tax administration reform agenda.
He emphasised that Namibia views SACU as a platform for achieving greater regional integration and industrial development than mere revenue distribution.
“As a country, we would advance these goals through the National Industrial Policy, the Growth at Home Strategy and other structural reforms,” Schlettwein added.