Economic stability begins at home: Shiimi

30 Sep 2016 18:20pm
WINDHOEK, 30 SEP (NAMPA) - Namibians from all walks of life need to intensify efforts to curb non-essential expenditure to preserve the country's foreign reserves.
This is crucial to assist Government’s efforts in preserving the macro-economic stability of the country, said Governor of the Bank of Namibia Iipumbu Shiimi at a public discussion held by the Alumni Association of the University of Namibia here on Thursday.
“It is not only Government which is spending but all of us are spending. All of us are accumulating debt, which is unproductive, so it is now time to slow down because borrowing is becoming expensive due to the high interest rate.”
His remarks come shortly after international rating agency, Fitch Ratings, expressed concern that despite strengthening its tax collection mechanism, Namibia would not be able to collect enough money to pay off Government debt calculated at 38,2 per cent of Gross Domestic Product (GDP) at the end of 2015.
The downturn in the global economy and a decrease in exports such as uranium and copper has also reduced Government revenue and slowed down the construction industry and infrastructure development.
To cut costs, Government in August suspended recruitment in the public sector to allocate more money to assist citizens in coping with the prevailing drought.
Shimii urged Namibians to understand that as a major importer of consumables and processed goods, and not a producer of many goods found on the shelves of local supermarkets, every purchase costs Government money.
“When we are all spending, it means we are buying foreign goods, which means that we are spending the foreign reserves of the country because we buy those goods using foreign currency and not Namibian dollars. So we may deplete our foreign currency reserve and you may go to a shop and find nothing on the shelves.”
Shimii said Government has been forced to increase debt in order to keep afloat.
According to the Namibian Fixed Income & Economics report by stock brokerage firm Simonis Storm in August, Government debt over the last six years has grown significantly to N.dollars 6.1 billion in June 2016.
The BoN governor projected that Government will be forced to cut its 2017/18 budget by 2,5 per cent.
Shimii thus urged parents to assist their children in their quest of becoming productive citizens.
“It means if you are a student, you must study and pass in order to become a productive person. If you are teaching it means you have to do your best. If you are a mother, it means you have to bring up your children in order to become productive employees or employers. It starts with us, it must start at home.”