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Friday 18 January 2019
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Electricity imports cost Namibia N$2.6 billion yearly

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Political parties have an overarching wish for the budget policy statement, that spending on the military must be slashed to clear up funds for other socio economic programmes.
Finance Minister Calle Schlettwein should tackle at least three areas in order to give hope to thousands of Namibians living below the poverty line when he delivers the budget statement on 8 March 2017.
 
These include reduced defence spending, State Owned Enterprises (SOE) reforms and increased spending on agriculture.
The Patriot approached the country’s two biggest opposition parties-DTA of Namibia and Rally for Democracy and Progress to find out what their expectations for next month’s budget is.
During an interview this week outlining the DTA of Namibia’s expectations, party leader McHenry Venaani said his party expects the finance minister to announce that there will be an independent revenue collecting authority that would improve the country’s revenue collection.
 
“We must also rethink the calculus on procurement. One thing that the economy is lacking at the moment is the trickledown effect because the procurement rules are designed in such a manner that expatriates, companies of foreign nationals, mainly Chinese remain the greatest beneficiaries of government tenders,” he lamented.
He added: “When they get those tenders, they do not spend the money in the country, they take it off-shore, and it has already been proven by this N $3.5billion case. That case is just the tip of the iceberg, there are bigger tax evasions going on.”
 
The public procurement system has come under intense scrutiny and criticism in recent years because of alleged favoratism, nepotism and corruption when it comes to awarding tenders. This has led to widespread reforms of the procurement system that includes the collapse of the Tender Board that will make way for a Central Procurement Board and the introduction of the Public Private Partnership Bill.
 
“So what you need is a reform in the procurement rules to segment and compartmentalize tenders so that smaller and smaller portions of the tenders goes to smaller companies for you to have a tricking down effect. You cannot kick-start the economy without a trickledown effect…to keep the economy running you need an effective tricking down effect,” Venaani said.
DTA has over the years been consistent regarding the perceived high budget allocation to the Ministry of Defence which has been in the top tier of highest allocations in recent years.
 
Namibia’s defence budget has more than doubled since 2010, rising from N$2.6 billion in 2009/10 to N$6.6 billion in 2016. The public has often questioned the spending saying it does not make sense for a peaceful, stable country with no immediate enemies to spend a huge chunk of its budget on the army.
Government has spent over N$34 billion on the defence sector since 2010, despite close to 1 million citizens suffering from undernourishment.
 
The 2015 State of Food Insecurity Report released last year by the United Nations (UN) states that at least 966 000 of the 2.3 million Namibians were undernourished in 2014, compared to 621 000 in 2002.
 
“If you look at the ratio, the percentage of our Gross Domestic Product (GDP) (that we spend on Defence), we are in the same category with countries that overspend of defence. Our spending on defence would par countries like the United States (USA) and Saudi Arabia that are heavy spenders on defence,” he said.
He added: “I think that government has come to the realization that the country cannot continue spending exponentially on defence. Considering the economic hardships, one would think it will be wise to cap the procurement of defence machinery and weaponry and holistically put the brakes on defence spending.”
Venaani is of the view that the political leadership[ruling party] seems not to be bothered by the economic hardships of the country.
 
“How do you buy weaponry when in the times of an economic crisis?” he questioned.
“I think defence should drop to operational budget, to pay salaries and maintaining what you have as opposed to expanding.”
Regarding SOEs that continue to cost taxpayers billions, Venaani expects Schlettwein to announce new strategies cut unnecessary expenditure of SOEs.
 
“The continuous failure of SOEs and the fact that every now and then there’s turnaround strategies is a concern. The budget should fundamentally address the turnaround strategies and their yielding of results, for those that are not working it is time for strategic re-alignment,” he said.
 
He also expects an upward shift in spending following the good rains in the country.
“Agriculture will have to get more money to be able to maximise food security, sustainability and job creation,” he said.
 
RDP
The Rally for Democracy and Progress(RDP) said “it is difficult to predict the country’s budget which has always been on an upward trend”.
“It is difficult to tell because the government has always been running an expansionary budget, but looking at the economy-internally and externally-one would expect a reduction in government spending,” said RDP secretary general Mike Kavekotora.
 
“One would expect that this time around they will reduce government spending massively because the economic indicators have not changed for the better. It is high time for Namibia to start living within its economic means because it is the only way that the targeted goals can be realised,” he said.
 
“Secondly I would expect government to live within its means in the sense that the budget must be a true reflection of the economic growth of a country,” added Kavekotora.
Going further, the former for Namibia Housing Enterprise (NHE) chief said he does not expect to see a “cut” in the public sector.
“They (government) will not cut the public service sector, especially when considering the high unemployment rates in the country,” noted Kavekotora.
 
On the government’s continued spending on the Ministry of Defence and military equipment in particular, Kavekotora expects a “slight” decrease in spending on that front.
“One would expect the government to reduce the spending on defence but the condition has always been that the spending on defence has been kept the same or increased. I personally believe that even if there is a cut in spending on defence, it will not be significant,” said Kavekotora.
 
According to the RDP parliamentarian, Namibia’s continued heavy spending on defence “does not make sense” as the country is under no immediate threat.
On the continued “parasite-like” dependence of some State Owned Enterprises on government for their survival, Kavekotora is hopeful that the Minister of Public Enterprises will put measures in place to reduce the dependency cult.
 
“I think the Minister of Public Enterprises would want to reduce the dependency of State Owned Enterprises on government as much as possible. However, because of the restructuring process (taking place at SOEs), sometimes the need to spend more money on restructuring is required,” he said.
 
Furthermore, the RDP politician added that government is expected to spend more on agriculture to promote food security, industrialization and job creation.
 
“Agriculture is a very important for Namibia, government needs to spend more on Agriculture because it is a prerequisite for industrialization,” Kavekotora added.
In addition, Kavekotora lamented the drought situation that some of the regions still find themselves in despite the heavy rainfalls that have been recorded in most parts of Namibia.
 
“You should understand that regions like Erongo and Kunene are still in the danger zone with regard to the drought situation, therefore late payment money meant for drought relief purposes needs to be addressed,” bemoaned Kavekotora.
Under the same token, he further urged government to take a proactive approach especially when dealing with drought related matters.
 
“We know that Namibia is a dry country and that by the end of March, our normal raining season end. But the government has a tendency of waiting and waiting until it’s late to come up with solutions, we must be proactive in our approach,” concluded Kavekotora.



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