Government to establish infrastructure fund
Government expects economic growth of between 1.8% to 2.3% this year, down from its earlier forecast of 2.8%.
Namibia will establish an infrastructure fund by the end of October to finance current and future infrastructure in the country, Finance Minister Calle Schlettwein said Wednesday.
Schlettwein explained that the fund forms part of emerged policies to be tabled in the mid-year budget review to support the economy and address macro-fiscal risks. The budget review will be tabled in the last week of October, he said.
To give effect to economic growth dimension, Schlettwein said, they had engaged the public and private sector to establish an infrastructure fund to finance current and future priority economic infrastructure.
The fund, which will be implemented through the Development Bank of Namibia, will draw capitalisation from the domestic financial and capital markets, with amortisation provided for under the budget over time as a measure to embed sustainability and fiscal transparency.
“This intervention has latitude of complementarity with the infrastructure financing through the African Development Bank and public/private/partnership infrastructure financing arrangements,” he said.
These measures will be a good shot in the arm for the construction sector which is now bottoming out of the severe effects of the steep consolidation phase, Schlettwein said.
Other policies aimed to support the economy and address macro-fiscal risks, include the carrying through with the fiscal consolidation policy to achieve the expressed objective of stabilising growth in public debt and eventually reducing the debt level.
In addition the policies are meant to increasingly mobilise domestic resources to finance the national development agenda.
The consolidation plan included budget cuts for ministries and agencies, reduction in travelling and subsistence allowances and shelving some of the big projects.
Growth
Namibia's economy is anticipated to grow in the range of 1.8% and 2.3% this year, Schlettwein said. Earlier this year growth of 2.8% was anticipated.
Schlettwein said there is reasonable optimism that economic activity and outlook for this year is better than in 2016 when growth came in at 1.1%.
The economy is showing signs of modest recovery and could perform better this year, due to the agriculture sector which was in contraction and the mining sector that posted low growth last year and has now rebounded.
“These two sectors promise to lift the medium-term growth potential of the economy,” he said.
Schlettwein said the fiscal drag comes from contractions in the construction sector as it adjusts to the bust period in both public and private investment, the wholesale trade and retail sector due to subdued consumer demand, and resource stock-related pressures in the fisheries sector.
The agriculture sector has recovered from the severe drought over the past years, but erratic rain conditions should be kept in mind, Schlettwein warned.
“Commodity prices in the mining sector, with exception of uranium, have bottomed out and show gradual recovery,” he said, adding that the recovery in mining and agriculture would support potential growth in the primary industries.
He indicated that the severe impact on the construction sector will improve gradually with better recovery prospects anticipated in 2018 going forward. - Nampa
Schlettwein explained that the fund forms part of emerged policies to be tabled in the mid-year budget review to support the economy and address macro-fiscal risks. The budget review will be tabled in the last week of October, he said.
To give effect to economic growth dimension, Schlettwein said, they had engaged the public and private sector to establish an infrastructure fund to finance current and future priority economic infrastructure.
The fund, which will be implemented through the Development Bank of Namibia, will draw capitalisation from the domestic financial and capital markets, with amortisation provided for under the budget over time as a measure to embed sustainability and fiscal transparency.
“This intervention has latitude of complementarity with the infrastructure financing through the African Development Bank and public/private/partnership infrastructure financing arrangements,” he said.
These measures will be a good shot in the arm for the construction sector which is now bottoming out of the severe effects of the steep consolidation phase, Schlettwein said.
Other policies aimed to support the economy and address macro-fiscal risks, include the carrying through with the fiscal consolidation policy to achieve the expressed objective of stabilising growth in public debt and eventually reducing the debt level.
In addition the policies are meant to increasingly mobilise domestic resources to finance the national development agenda.
The consolidation plan included budget cuts for ministries and agencies, reduction in travelling and subsistence allowances and shelving some of the big projects.
Growth
Namibia's economy is anticipated to grow in the range of 1.8% and 2.3% this year, Schlettwein said. Earlier this year growth of 2.8% was anticipated.
Schlettwein said there is reasonable optimism that economic activity and outlook for this year is better than in 2016 when growth came in at 1.1%.
The economy is showing signs of modest recovery and could perform better this year, due to the agriculture sector which was in contraction and the mining sector that posted low growth last year and has now rebounded.
“These two sectors promise to lift the medium-term growth potential of the economy,” he said.
Schlettwein said the fiscal drag comes from contractions in the construction sector as it adjusts to the bust period in both public and private investment, the wholesale trade and retail sector due to subdued consumer demand, and resource stock-related pressures in the fisheries sector.
The agriculture sector has recovered from the severe drought over the past years, but erratic rain conditions should be kept in mind, Schlettwein warned.
“Commodity prices in the mining sector, with exception of uranium, have bottomed out and show gradual recovery,” he said, adding that the recovery in mining and agriculture would support potential growth in the primary industries.
He indicated that the severe impact on the construction sector will improve gradually with better recovery prospects anticipated in 2018 going forward. - Nampa
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