25 Feb 2016 18:30pm
WINDHOEK, 25 FEB (NAMPA) There will be no net increase in the current size of the civil service for the next three years, Minister of Finance Calle Schlettwein announced on Thursday.
Tabling the 2016/2017 National Budget of N.dollars 66 billion in the National Assembly, Schlettwein also proposed that any public sector wage increases be capped to a maximum of the annual inflation rate.
Namibia has approximately 100 000 public servants.
The country's annual inflation for 2016 increased considerably to 5,3 per cent from the 3,7 per cent recorded in 2015.
Last year, civil servants received a salary increase of between three and six per cent, as per an agreement signed between the unions and Government.
The increases that cover the next three years over the Medium Term Expenditure Framework (MTEF), pushed up Government expenditure by N.dollars 5.6 billion through salaries and other benefits.
Schlettwein explained that the recent trend in growth in remuneration expenditure and related budget subdivisions has been a cause for concern.
Whilst these categories of expenditure support gainful employment and opportunities for many Namibians, we must seek to ensure that recurrent expenditure is not funded in the long-term at the expense of other public investments to improve the productive capacity of the economy.
In this regard and in keeping with Governments commitment to ensuring that all public institutions become more effective, efficient and economic in the use of public funds, a realignment of growth in remuneration expenditure in line with inflation is currently under consideration.
As part of the consolidation stance, Schlettwein said the development budget is also reduced, but such cuts mainly lie in the postponement of the construction of office blocks for various ministries, Government institutions and agencies that are non-productive investments.
Taking into consideration these effects, Schlettwein said, the total development budget has been reduced to N.dollars 9.06 billion in 2016/2017 and rises moderately over the (MTEF) to reach N.dollars 11.01 billion by 2018/19.
In addition to the development budget allocation, he explained that budgetary allocations are made under the operational budget for targeted transfers to Public Enterprises for investment in strategic infrastructure projects.
Among the key off-budget infrastructure projects are railway works, the rehabilitation of several national road projects and energy and water infrastructure development projects.
Going forward, Government must seek a better alignment of the development budget to our economic priorities, industrialisation policy and our Growth at Home Strategy.
This alignment would further be optimised through leveraging local sourcing requirements, Public-Private Partnerships (PPPs), improved Namibian ownership and the development of value chains across the development initiatives, the minister explained.
This year's National budget aims to address structural challenges of the economy and improve wealth creation.