07 Mar 2018 21:50pm
WINDHOEK, 07 MAR (NAMPA) Total expenditure over the Medium Term Expenditure Framework (MTEF) is projected to increase by an average of 1,2 per cent on account of expenditure containment measures and the moratorium on new non-productive expenditure items.
In this regard, aggregate expenditure levels increase from N.dollars 65.0 billion in 2018/19, N.dollars 65.7 billion in respect of 2019/20 and N.dollars 66.3 billion by 2020/21, said Minister of Finance Calle Schlettwein on Wednesday when he tabled the 2018/19 National Budget in the National Assembly.
Schlettwein added that as a proportion of gross domestic product (GDP), total expenditure is projected to continue declining, from 38,4 per cent in 2017/18 to 35,2 per cent in 2018/19 and hover around 32,8 per cent on average over the MTEF.
He said marked reduction in non-core expenditure items has been realised since the adoption of targeted consolidation measures in 2015/16.
The minister cited total spending on Subsistence and Travel Allowance that reduced by a cumulative 62,3 per cent over the past three years, from N.dollars 634.3 million in 2015/16 to N.dollars 221.8 million allocation in 2018/19.
I welcome the administrative cost saving measures instituted by the Office the Prime Minister to curb wastage and unnecessary expenditure.
He added that the budget deficit is estimated at 4,5 per cent of GDP in 2018/19, from 5,4 per cent in 2017/18 and average around 3,6 per cent over the MTEF.
The deficit will be financed through a combination of domestic financing instruments and African Development Bank (AfDB) operational budget support, explained Schlettwein.
He indicated that the fiscal policy stance for the next MTEF is to retain the fiscal consolidation stance to safeguard macroeconomic stability and fiscal sustainability, providing fiscal policy support for inclusive economic growth interventions and the achievement of socio-economic development objectives set out in the Harambee Prosperity Plan, NDP5 and Vision 2030.
The minister said Government plans to stabilise the growth of Government debt at 46,0 per cent of GDP through a gradual reduction in the budget deficit and debt amortization programme.
It further plans to implement revenue-raising tax policy changes and alternative forms of financing, particularly private-public partnerships and structural policy reforms to support the implementation of the fiscal consolidation programme, while keeping fiscal risks in check.
While reducing total expenditure this budget [of N.dollars 65 billion] proposes to increase the size of the revised development budget from N.dollars 5.6 billion in 2017/18 to N.dollars 7.3 billion and reach N.dollars 8.2 billion by 2020/21, the minister noted.
Schlettwein added that total non-interest operational expenditure for 2018/19 is proposed at N.dollars 51.2 billion, compared to N.dollars 55.4 billion in 2017/18, increasing to N.dollars 51.4 billion by 2020/21.
Interest payments amounts to N.dollars 5.7 billion or 11,5 per cent of revenue in 2018/19 and hover around 11,4 per cent of revenue over the MTEF, reflecting the increasing financing obligations for the budget deficit and project financing obligations.