Saturday 17 April 2021
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Govt has to be creative to make it financially

Ministries will have to get creative with what they have to survive financially some executive directors said, as they wait for the next financial year budget allocations to be announced during the 2019/2020 budget announcement set to take place on 13 March 2019.
When looking at the allocations and the recent trend of the national budget, Allan Gray Managing Director James Mnyupe told The Patriot on Wednesday that the most recent national budgets reflect an economy that requires an inclusive effort to reignite the engines of growth.
He added that the country’s debt grew while revenue has stalled. Notably growth has been described as ranging from “muted to absent” and that the economy had contracted over the past three years or so.
Without pre-empting the upcoming budget, the economist said that to ensure fiscal sustainability, “an honest review of the situation we are in and a collaborative approach to what I term integrated strategic problem solving is required.
This basically entails the identification of systemic challenges, crafting remedial approaches with both the private and public sector around the table and all this needs to be done with a nationalistic oversight that counterbalances any inter-ministerial or departmental objectives which may be counterproductive to the national imperative or greater good.
The above requires a strategic and collaborative approach to problem solving, that must be inclusive of all parties and must be plainly and clearly articulated by the people of Namibia, to allow them to hold their elected and appointed stakeholders (both private and public) accountable,” he said.
Executive Director for the Ministry of Health and Social Services, Ben Nangombe told The Patriot on Monday that his ministry would appreciate an increase with the upcoming budget.
Nangombe said that an increase in the population will always mean that the ministry is responsible for more people with regards to not only providing healthcare, but provide quality healthcare.
He also added the growing population coupled with inflation further cements the need for an increase in the health ministry’s need for a budget increase.
“Based on our assessment of the current situation, we would need more,” he said.
He added that he however understands the current financial predicament and that the ministry will just have to work with whatever they are given.
When asked whether they would survive a budget cut, the executive director said that they will have to poke more holes in their belts and save even more than they are currently and that they will have to “be creative” in the way they manage and utilise the resources at their disposal.
He also said that a budget cut would mean that some programmes will have to be shelved until they get extra funding, either from donors or during the mid-term budget review.
Despite there being a need for more personnel – especially nurses – and a demand for nursing jobs, the ministry is still not in a position to fill new positions, but will only be able to replace those staff members who will be going into retirement.
Mnyupe said that while freezing jobs will hurt unemployment, it has to be viewed in context of the fact that the public sector has a relatively high wage bill relative to global peers.
“So if we have a spare dollar to spend, we have to weigh the benefits of hiring more people relative to spending that dollar on infrastructure projects that will create a conducive environment for long term investments, employment, growth and ultimately revenue generation.
If we continue to spend money we don’t have, we could find ourselves in a very uncomfortable position where we have borrowed more than we can repay and we may end up needing to be bailed out by other nations or organisations, which will ultimately reduce our ability to be truly autonomous – basically the independence we fought so hard to secure could come under threat from our inability to resist the urge to consume beyond our means,” he added.
The 2018/2019 Budget recorded the Ministry of Health and Social Services getting their budget cut by N$190 million from N$500 million to N$310 million. In addition to this, the ministry has also had 29 of its 34 projects scaled back.
Mnyupe said that he does not think cutting alone will get Namibia out of its financial difficulties.
“We need a holistic approach that carefully identifies the resources at our disposal and then carefully allocates said resources to selected engines of growth for the economy,” he said.
“The national savings pool may prove to be one such example of resources at our disposal that could be carefully deployed to not only kick-start growth but also fairly reward the owners of said capital.
This should be done in a collaborative manner, in conjunction with the custodians of the nation’s wealth,” the Managing Director said.
Another Executive Director, I-Ben Nashandi from the Office of the Prime Minister told The Patriot that while he is not at liberty to comment on the upcoming budget allocations, he can say that the year-old directive from Prime Minister Saara Kuugongelwa-Amadhila have assisted in saving government money.
Ministry of Education’s Executive Director Sanet Steenkamp agreed with Nashandi saying that ministries and agencies, in addition to managing to what is allocated to them, should as a collective enforce the savings directive in order for the impact to be felt and the financial burden on government be lightened.
The education ministry also suffered a 22% cut in its last budget allocation. The budget was reduced by N$143 million from N$660 million. This also resulted in 24 of its 33 projects being scaled back.
The Tender Bulletin of 22-28 February recorded that Government’s development budget was cut in October 2018 from N$7,3 billion at the beginning of 2018 to N$5, 6 billion. This cut resulted in the scaling back of 201 out of 406 projects which were under implementation until the end of March 2019.
The bulletin further reported that the current revised development budget is the lowest in the past six years and that in terms of the midyear project spending suspensions, this year is far worse than last year.
Last year started with a N$6, 9 billion development budget covering 419 projects, with the revised mid-year reducing it to N$6,3 billion and affecting 66 projects.
Despite the cuts in the key ministries when it comes to social welfare, central government continued to spend more on the construction of military bases, police stations and prisons than on schools, hospitals and clinics.
The Ministry of Safety and Security maintained its N$331 million development, none of its 36 projects scaled back. The Ministry of Defence also retained its development funding of N$434,5 million and none of its nine original projects were revised.
Finance minister Calle Schlettwein in his budget statement for the 2018/2019 fiscal year said that treasury had to make necessary budget cuts since 2016 in order to ensure fiscal sustainability and that the 2018/2019 budget benefitted from gains of the cuts.
He, in is statement also stated that treasury had stabilised public finances.
“The budget before you seeks to increasingly align resources to these key priority areas. It mobilises and aligns resources to support long-term economic growth and social development.
It retains the policy stance to entrench macroeconomic stability and fiscal sustainability,” Schlettwein said about the last fiscal year’s budget when he tabled it in Parliament.

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