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Revised deficit up by N$579 mln

Mid-year budget review
Finance minister Iipumbu Shiimi this afternoon warned against the volatility in Sacu revenues and said Namibia needs to aggressively diversify its economy with the view to reduce dependence on receipts from the customs union.
Jo-Maré Duddy
Namibia’s economy is, in several ways, outperforming its peers, but remains vulnerable, finance minister Iipumbi Shiimi has said in his mid-year budget review speech in parliament this afternoon.

“The immediate focus of fiscal policy in the near term is to shield the economy and the wellbeing of our people, particularly the most vulnerable segments of society, from the impact of the ongoing drought. Similarly, the medium-term fiscal framework will aim to implement further measures to contain cost of living pressures while maintaining fiscal sustainability through managing the pace of debt accumulation,” Shiimi said.

The preliminary revenue outturn at the end of September 2023 stood at N$40.1 billion, equivalent to 53.7% of the initial revenue projections in the budget. In this regard, revenue collections are some 6.6 percentage points higher than the historical mid-year collection rate and is thus expected to exceed the initial budget projections.

Revenue

Due to the positive fiscal performance in the medium term, there has been a need to increase the revenue projection for the fiscal year 2023/24 by N$3.8 billion. This brings the new revenue estimate to N$78.5 billion, up from the previously anticipated N$74.7 billion in the initial budget.

This revision reflects a 22.1% year-on-year revenue growth compared to the previous fiscal year. Looking ahead over the Medium-Term Expenditure Framework (MTEF), it is anticipated that revenue will continue to expand at an average rate of 8.8%, reaching approximately N$82 billion by the fiscal year 2025/26.

The upward revisions in revenue for 2023/24 are a result of strong mid-term collection performance, primarily driven by increased receipts from various sources. Notably, these sources include income tax from individuals, corporate tax paid by both diamond mining and non-mining companies, value-added tax, and dividends received from entities like DebMarine Namibia, the Namibia Post and Telecom Holdings (NPTH), the Namibia Desert Diamonds (NamDia), and the Namibia Port Authority (NamPort).

Substantial upward adjustments were made for non-resident shareholder's tax and withholding tax on services, with mid-term collection rates exceeding 90% and 130%, respectively. These revisions, in particular, are partly attributable to early tax revenues generated by ongoing exploration activities within the natural resources sector, Shiimi said.

Sacu

In the outer years of the MTEF, the revenue outlook is clouded by potentially feeble economic activities in the region which could impact on trade and subsequently revenue flows into the Southern African Customs Union (Sacu) revenue pool, the minister said.

“In this regard, we are concerned about possible significant downward revisions in Sacu revenue for the next financial year,” he added.

Shiimi continued: “The exact share for Namibia from the Sacu pool in the next financial year will only be known in a few weeks, fortunately before we table the main budget in February 2024. The volatility in Sacu revenues further underscores the need for Namibia to aggressively diversify her economy with the view to reduce dependence on Sacu receipts.”

Expenditure

Total expenditure is expected to rise to nearly N$88.97 billion, which includes statutory commitments.

Shiimi allocated extra money as follow:

N$1.2 billion has been allocated to subsidies and other transfers to government organisations, inclusive of N$376.3 million to cover shortfalls on student funding at NSFAF, N$230 million to support TransNamib operations, N$200 million to meet an anticipated deficit on the Public Servants Medical Aid Scheme (Psemas), N$105.3 million to supplement the contingency budget and N$87.5 million for Namibia’s contribution to the deployment of the SADC mission in the Democratic Republic of Congo.

a total of N$438.5 million has been added on the goods and services budgets of various votes including, among others, N$250 million to supplement the pharmaceutical budget at the ministry of health and social services, N$40 million to complement the special fund for uncommon diseases, N$25 million to the ministry of justice to cover escalating legal costs and supplement the Legal Aid budget, as well as N$17 million to the ministry of environment, forestry and tourism to support anti-poaching activities;

an additional N$14.5 million to the ministry of sports, youth and national service for, among others, youth empowerment projects and the youth credit schemes.

The development budget remains unchanged at N$6.5 billion. The execution rate on the development budget at mid-year stood at 32.6%.

As a result, Shiimi reallocated a total of N$167.3 million from lagging projects to address urgent development priorities including N$129.7 million to expedite the construction of classrooms countrywide; and

considering the rising interest rate environment, the allocation for interest payments has been increased significantly by N$1.7 billion to meet anticipated shortfalls as the interest-sensitive component of the debt portfolio reprices at higher rates.

An additional N$602.8 million has been set aside under other statutory payments to honour calls on loan guarantees.

Stock guarantees

“Regarding the stock of guarantees, we do not envisage further significant disbursement in the short term, except for an additional N$250 million guarantee in favour of MeatCo during the current financial year,” Shiimi said.

In the medium term, further, provisions have been made for the pending US$100 million loan undertaking by NamPower relating to the planned transmission infrastructure expansion and battery energy storage projects sometime in 2025. This is an addition to the envisaged N$2.6 billion loan to strengthen rail operations.

Deficit, debt

On balance, however, the overall budget deficit is projected to remain steady at 4.2% of GDP in FY2023/24, with a moderate improvement in the primary surplus relative to the levels estimated in the main budget.

In nominal terms, however, the deficit is revised upwards slightly by N$579 million.

In FY2023/24, the public debt stock is expected to increase to N$153.8 billion, equivalent to 66% of GDP, a slight improvement from 67.9% in the previous financial year.

Over the MTEF, the pace of debt accumulation is estimated to have peaked resulting in a stabilisation of the debt ratios over the remainder of the MTEF, as nominal GDP growth outpace debt growth. It is opportune to continue capitalising on the growth momentum to move the debt metrics in the desired direction, Shiimi said.

“Despite the stabilising ratios owing to improved GDP outcomes, the high public debt levels should still remain central in fiscal policy considerations over the medium term. In this regard, we will continue to carefully balance between making the necessary provisions to attend to our developmental objectives while maintaining fiscal sustainability.

“As affirmed previously, government is committed to prudently manage the borrowing requirement and ensure macroeconomic sustainability,” he added.

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H.E. Dr Nangolo Mbumba, President of the Republic of Namibia says they will continue to pursue the second struggle of Namibia Zambian President, Hakainde Hichilema said one road will be named after the late president in Lusaka and the other road will be named after the founding president of Namibia The late President Hage Geingob’s casket was stationed at the Eternal Flame before he was taken to his final resting place The casket will of the late president was lowered with a 21 gun salute Accoutrements will be handed over to the former first lady of Monica Geingos An official luncheon by invitation is scheduled to take place at 14:00 at the State House The foreign dignataries are currently paying their last tribute to the former first lady, Monica Geingos Heroes Acre will be closed to the public, the National Council will announce once it is reopenedSix Nations: Scotland 30 vs 21 England | Ireland 31 vs 7 Wales Premier League: Arsenal 4 vs 1 Newcastle | Bournemouth 0 vs 1 Manchester City | Brighton 1 vs 1 Everton | Crystal Palace 3 vs 0 Burnley | Aston Villa 4 vs 2 Forest | Manchester United 1 vs 2 Fulham | Chelsea 0 vs 0 Tottenham Hotspur LaLiga: Almería 2 vs 2 Atletico Madrid | Deportivo Alaves 1 vs 1 Mallorca | Barcelona 4 vs 0 Getafe | Granada 0 vs 0 Valencia | Real Sociedad 1 vs 3 Villarreal SerieA: Juventus 3 vs 2 Frosinone | Genoa 2 vs 0 Udinese | Salernitana 0 vs 2 Monza | Sassuolo 2 vs 3 Empoli | Bologna 2 vs 0 Hellas Verona | Torino 0 vs 2 SS Lazio European Championships Qualifying: Watford 1 vs 2 Huddersfield Town | Ipswich Town 3 vs 1 Birmingham City | Sunderland 1 vs 2 Swansea City | Blackburn Rovers 1 vs 1 Norwich City | Southampton 1 vs 2 Millwall FC | Cardiff City 2 vs 1 Stoke City | Queens Park Rangers 2 vs 1 Rotherham United | Sheffield Wednesday 2 vs 1 Bristol City | Middlesbrough 0 vs 2 Plymouth Argyle | Hull City 1 vs 1 West Bromwich Albion | Leeds United 3 vs 1 Leicester City | Coventry City 0 vs 3 Preston North End English Championship: Watford 1 vs 2 Huddersfield Town | Ipswich Town 3 vs 1 Birmingham City | Sunderland 1 vs 2 Swansea City | Blackburn Rovers 1 vs 1 Norwich City | Southampton 1 vs 2 Millwall FC | Cardiff City 2 vs 1 Stoke City | Queens Park Rangers 2 vs 1 Rotherham United | Sheffield Wednesday 2 vs 1 Bristol City | Middlesbrough 0 vs 2 Plymouth Argyle | Hull City 1 vs 1 West Bromwich Albion | Leeds United 3 vs 1 Leicester City | Coventry City 0 vs 3 Preston North End Katima Mulilo: 22° | 41° Rundu: 22° | 40° Eenhana: 22° | 37° Oshakati: 23° | 36° Ruacana: 19° | 36° Tsumeb: 24° | 37° Otjiwarongo: 22° | 34° Omaruru: 21° | 36° Windhoek: 22° | 32° Gobabis: 22° | 35° Henties Bay: 16° | 19° Wind speed: 21km/h, Wind direction: S, Low tide: 10:10, High tide: 04:15, Low Tide: 22:13, High tide: 16:26 Swakopmund: 16° | 17° Wind speed: 25km/h, Wind direction: SW, Low tide: 10:08, High tide: 04:13, Low Tide: 22:11, High tide: 16:24 Walvis Bay: 16° | 21° Wind speed: 30km/h, Wind direction: SW, Low tide: 10:08, High tide: 04:12, Low Tide: 22:11, High tide: 16:23 Rehoboth: 20° | 34° Mariental: 20° | 36° Keetmanshoop: 19° | 35° Aranos: 20° | 36° Lüderitz: 14° | 30° Ariamsvlei: 16° | 34° Oranjemund: 13° | 26° Luanda: 26° | 28° Gaborone: 21° | 39° Lubumbashi: 18° | 26° Mbabane: 14° | 20° Maseru: 10° | 32° Antananarivo: 15° | 27° Lilongwe: 18° | 30° Maputo: 21° | 26° Windhoek: 22° | 32° Cape Town: 16° | 25° Durban: 18° | 22° Johannesburg: 19° | 32° Dar es Salaam: 27° | 33° Lusaka: 18° | 34° Harare: 18° | 33° Currency: GBP to NAD 24.4 | EUR to NAD 20.87 | CNY to NAD 2.68 | USD to NAD 19.28 | DZD to NAD 0.14 | AOA to NAD 0.02 | BWP to NAD 1.35 | EGP to NAD 0.62 | KES to NAD 0.13 | NGN to NAD 0.01 | ZMW to NAD 0.83 | ZWL to NAD 0.04 | BRL to NAD 3.86 | RUB to NAD 0.21 | INR to NAD 0.23 | USD to DZD 134.44 | USD to AOA 828.51 | USD to BWP 13.77 | USD to EGP 30.85 | USD to KES 144.98 | USD to NGN 1488.4 | USD to ZAR 19.29 | USD to ZMW 22.95 | USD to ZWL 321 | Stock Exchange: JSE All Share Index 74213.39 Up +0.14% | Namibian Stock Exchange (NSX) Overall Index 1551.37 Up +0.01% | Casablanca Stock Exchange (CSE) MASI 13083.17 Up +0.74% | Egyptian Exchange (EGX) 30 Index 29309.73 Up +0.06% | Botswana Stock Exchange (BSE) DCI 9001.84 Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 035.38/OZ UP +0.52% | Copper US$ 3.86/lb DOWN -0.0073 | Zinc US$ 2 432.00/T UP 0.13% | Brent Crude Oil US$ 81.72/BBP DOWN -0.0194 | Platinum US$ 900.85/OZ DOWN -0.0011 Sport results: H.E. Dr Nangolo Mbumba, President of the Republic of Namibia says they will continue to pursue the second struggle of Namibia Zambian President, Hakainde Hichilema said one road will be named after the late president in Lusaka and the other road will be named after the founding president of Namibia The late President Hage Geingob’s casket was stationed at the Eternal Flame before he was taken to his final resting place The casket will of the late president was lowered with a 21 gun salute Accoutrements will be handed over to the former first lady of Monica Geingos An official luncheon by invitation is scheduled to take place at 14:00 at the State House The foreign dignataries are currently paying their last tribute to the former first lady, Monica Geingos Heroes Acre will be closed to the public, the National Council will announce once it is reopenedSix Nations: Scotland 30 vs 21 England | Ireland 31 vs 7 Wales Premier League: Arsenal 4 vs 1 Newcastle | Bournemouth 0 vs 1 Manchester City | Brighton 1 vs 1 Everton | Crystal Palace 3 vs 0 Burnley | Aston Villa 4 vs 2 Forest | Manchester United 1 vs 2 Fulham | Chelsea 0 vs 0 Tottenham Hotspur LaLiga: Almería 2 vs 2 Atletico Madrid | Deportivo Alaves 1 vs 1 Mallorca | Barcelona 4 vs 0 Getafe | Granada 0 vs 0 Valencia | Real Sociedad 1 vs 3 Villarreal SerieA: Juventus 3 vs 2 Frosinone | Genoa 2 vs 0 Udinese | Salernitana 0 vs 2 Monza | Sassuolo 2 vs 3 Empoli | Bologna 2 vs 0 Hellas Verona | Torino 0 vs 2 SS Lazio European Championships Qualifying: Watford 1 vs 2 Huddersfield Town | Ipswich Town 3 vs 1 Birmingham City | Sunderland 1 vs 2 Swansea City | Blackburn Rovers 1 vs 1 Norwich City | Southampton 1 vs 2 Millwall FC | Cardiff City 2 vs 1 Stoke City | Queens Park Rangers 2 vs 1 Rotherham United | Sheffield Wednesday 2 vs 1 Bristol City | Middlesbrough 0 vs 2 Plymouth Argyle | Hull City 1 vs 1 West Bromwich Albion | Leeds United 3 vs 1 Leicester City | Coventry City 0 vs 3 Preston North End English Championship: Watford 1 vs 2 Huddersfield Town | Ipswich Town 3 vs 1 Birmingham City | Sunderland 1 vs 2 Swansea City | Blackburn Rovers 1 vs 1 Norwich City | Southampton 1 vs 2 Millwall FC | Cardiff City 2 vs 1 Stoke City | Queens Park Rangers 2 vs 1 Rotherham United | Sheffield Wednesday 2 vs 1 Bristol City | Middlesbrough 0 vs 2 Plymouth Argyle | Hull City 1 vs 1 West Bromwich Albion | Leeds United 3 vs 1 Leicester City | Coventry City 0 vs 3 Preston North End Weather: Katima Mulilo: 22° | 41° Rundu: 22° | 40° Eenhana: 22° | 37° Oshakati: 23° | 36° Ruacana: 19° | 36° Tsumeb: 24° | 37° Otjiwarongo: 22° | 34° Omaruru: 21° | 36° Windhoek: 22° | 32° Gobabis: 22° | 35° Henties Bay: 16° | 19° Wind speed: 21km/h, Wind direction: S, Low tide: 10:10, High tide: 04:15, Low Tide: 22:13, High tide: 16:26 Swakopmund: 16° | 17° Wind speed: 25km/h, Wind direction: SW, Low tide: 10:08, High tide: 04:13, Low Tide: 22:11, High tide: 16:24 Walvis Bay: 16° | 21° Wind speed: 30km/h, Wind direction: SW, Low tide: 10:08, High tide: 04:12, Low Tide: 22:11, High tide: 16:23 Rehoboth: 20° | 34° Mariental: 20° | 36° Keetmanshoop: 19° | 35° Aranos: 20° | 36° Lüderitz: 14° | 30° Ariamsvlei: 16° | 34° Oranjemund: 13° | 26° Luanda: 26° | 28° Gaborone: 21° | 39° Lubumbashi: 18° | 26° Mbabane: 14° | 20° Maseru: 10° | 32° Antananarivo: 15° | 27° Lilongwe: 18° | 30° Maputo: 21° | 26° Windhoek: 22° | 32° Cape Town: 16° | 25° Durban: 18° | 22° Johannesburg: 19° | 32° Dar es Salaam: 27° | 33° Lusaka: 18° | 34° Harare: 18° | 33° Economic Indicators: Currency: GBP to NAD 24.4 | EUR to NAD 20.87 | CNY to NAD 2.68 | USD to NAD 19.28 | DZD to NAD 0.14 | AOA to NAD 0.02 | BWP to NAD 1.35 | EGP to NAD 0.62 | KES to NAD 0.13 | NGN to NAD 0.01 | ZMW to NAD 0.83 | ZWL to NAD 0.04 | BRL to NAD 3.86 | RUB to NAD 0.21 | INR to NAD 0.23 | USD to DZD 134.44 | USD to AOA 828.51 | USD to BWP 13.77 | USD to EGP 30.85 | USD to KES 144.98 | USD to NGN 1488.4 | USD to ZAR 19.29 | USD to ZMW 22.95 | USD to ZWL 321 | Stock Exchange: JSE All Share Index 74213.39 Up +0.14% | Namibian Stock Exchange (NSX) Overall Index 1551.37 Up +0.01% | Casablanca Stock Exchange (CSE) MASI 13083.17 Up +0.74% | Egyptian Exchange (EGX) 30 Index 29309.73 Up +0.06% | Botswana Stock Exchange (BSE) DCI 9001.84 Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 035.38/OZ UP +0.52% | Copper US$ 3.86/lb DOWN -0.0073 | Zinc US$ 2 432.00/T UP 0.13% | Brent Crude Oil US$ 81.72/BBP DOWN -0.0194 | Platinum US$ 900.85/OZ DOWN -0.0011