08 Feb 2018 08:10am
WINDHOEK, 08 FEB (NAMPA) Government should abandon the Harambee Prosperity Plan (HPP) and the Fifth National Development Plan (NDP5) and come up with a plan to rescue Namibias teetering economy, Mally Likukela, Managing Director of Twilight Capital Consulting said.
Responding to questions on how Namibia can forge ahead in the midst of economic turbulence on Tuesday, the economist argued that the HPP and NDP5 were crafted under assumptions that the economy would survive the recession.
The assumptions under which these plans were crafted have significantly changed and trying to pursue them will lead to more debt accumulation than the country can sustain, said Likukela.
According to him, both plans are expansionary and expenditure-oriented.
Since we dont have money of our own, we have to borrow to sustain them. Right now the government does not have fiscal space to implement most of these plans, Likukela reasoned, advising Government to instead come up with a rescue plan.
If we pursue NDP5 or Harambee, it will be like ignoring the fact that we are in a crisis and its business as usual, he said.
As widely reported, the government has tightened the noose on the State purse by instituting austerity measures.
Chiefly, Likukela pointed to the barring of politicians and civil servants from undertaking foreign business travel; the freezing of capital projects [budget cuts] and lack of tenders as Government interventions that have negatively impacted economic growth.
Putting breaks on capital projects has led to a complete collapse of the construction industry. With it, a number of companies were brought down to a close and job losses, he said.
Likukela said austerity measures are not bad at all, but when they are undertaken, special care must be given first to the timing and second to the depth of the measures.
Government has maintained that it is being prudent and efficient in its expenditure and not broke as reported.
Finance Minister, Calle Schlettwein, recently rubbished claims of the country being broke, saying the country is in a better position compared to the same time last year.