Minister of Economic Planning Tom Alweendo has reiterated that government might have been over-ambitious with some of its 2017 revenue and expenditure projections, but he maintained that the sinking economy can still be salvaged.
Alweendo advised against the tendency of blaming each other for the situation, Namibia finds itself in.
Although he remains aware of the fact that little could be done to change the global economic conditions in the country, but urged everyone – including business – to work together to change the local conditions.
“We find ourselves in a position where our fiscal situation is not as good as it used to be in terms of meeting expenditure as we wanted. The 2016/17 budget turned out to be a missed target, we did not collect the revenue we intended to and therefore we were forced to cut some expenditure and in some cases suspend some capital projects that will not have severe impacts on the growth potential,” he said.
Alweendo was speaking at a recent business dinner hosted by The Patriot under the theme The Namibian Economy: Qua Vadis?
He conceded that in some instances Treasury have “cut too much which has also contributed to the current financial situation”.
“The economy cannot grow without new investments, therefore the idea of us cutting was informed by the consideration that we should not starve the economy. It turns out that maybe we might have gone too far in terms of cutting, because there are a number of industries who have been restricted. But this had to be done because we could not continue as usual,” he said.
Alweendo also spoke of how the over-reliance of the private sector on government is hampering the country’s growth prospects.
“When you have such an unsustainable situation you are bound to face challenges. As much as we want government to do certain things, we must devise ways to strengthen the private sector to reduce its reliance on government. Does it[private sector] need government support or does it need its own investment? We need to examine why our private sector is not growing,” said Alweendo.
Alweendo warned strongly that Namibia’s development will face severe impediments if the private sector fails to grow.
With the National Development Plan 5 needing about N$140 billion over the next half-a-decade for its full implementation, the minister says there exists perceptions that government will foot the entire bill.
“People keep asking where the N$140 billion will come from for NDP5 because it is being assumed that the plan is wholly implementable by government. But that is not how we[government] saw it, of course we will contribute a certain portion to the funding needs of NDP5, but we also expect the private sector to invest in industries outlined in the plan,” he explained.
He wants government and the private sector to have a frank discussion on the relationship between government and the private sector regarding the roles that each has to play in the development of the country, adding that there is need for the relationship to be strengthened and to forge peaceful coexistence between the two.
Alweendo also dispelled claims by some sections of the public that feel ratings agencies such as Fitch and Moody’s come to Namibia to make the country look bad.
“We went to these agencies in order to encourage investors to come to Namibia. That is the way to do that, but now our people think the agencies are there to expose us. We must take what they are saying seriously and act upon it instead of being emotional. ”
Makalani Fund Manager Salomo Hei said the amount of money spent on government programmes such as Mass Housing and TIPEEEG “was money from SACU that we did not have yet.”
“Ideally when you roll out huge infrastructure programs like that then the private sector must position itself to build industries that produce goods. Naturally, you would expect the import bill to decrease but that was never the case, in fact in our case it skyrocketed,” he said worryingly.
Hei, an economist by profession, urged government to start establishing modalities that will ensure the sourcing of goods locally as much as possible.
He further indicated that there is a huge potential for the economy to grow if the logistics sector is prioritised.
“In Botswana, the amount of goods that they are considering moving from Walvis Bay that they source from Europe is large. We need to position ourselves for that. Of course we have to compete with the ports in South Africa, hence our systems need to be efficient,” he said.
According to Hei: “Logistics needs to be propelled as a sector for growth.
Look at DHL, they specialise in moving goods and they make a lot of money from that, what stops our private sector players from robustly penetrating that industry.”
He also called on government to relook the voluntary charter arrangements, adding that emphasis should rather be placed on transformative commitments.
“Fitch raises issues around NEEEF and so on. We need to be decisive on policies to avoid policy uncertainty.
We need to put investors and ratings agencies at ease when it comes to policies. We need policies that will build inward linkages that will benefit the country instead of always prioritising the satisfaction at the expense of the country,” he suggested.
He outlined logistics and the agriculture sectors as the panacea for the country’s sustainable growth.