Chamwe Kaira
Finance minister Ericah Shafudah has defended Namibia’s 2026/27 national budget, saying it balances fiscal discipline with the need to protect essential services and support economic recovery.
Speaking during the second reading of the appropriation bill, this week Shafudah said the budget does not introduce broad-based tax increases. She said it aims to stabilise revenue without adding pressure on households and businesses.
She acknowledged concerns about Namibia’s reliance on Southern African Customs Union (SACU) revenues, which make up about a quarter of total income.
She said this remains a structural risk and that government plans under the sixth National Development Plan focus on diversifying the economy and strengthening domestic revenue.
On the budget deficit, Shafudah said it reflects a balance between fiscal consolidation and economic support. She said rising interest costs and the need to protect key services and development spending are driving the deficit.
She said the size of the development budget should not be judged only by allocation but by impact.
She added that funding comes from different sources, including the State Revenue Fund, loans, grants and support from institutions such as the National Housing Enterprise and the Road Fund Administration (RFA).
Shafudah addressed concerns about public debt, saying sustainability depends on the structure of debt and its path over time.
She said most of the debt is domestic and that the government is working to improve the primary balance.
She said rising interest payments are putting pressure on public finances, but the government is cutting non-essential spending while protecting development and social programmes.
On social spending, Shafudah said the budget protects key sectors. She said support for service delivery, employment programmes and social grants will continue to avoid worsening inequality.
On agriculture, she said funding goes beyond direct allocations. She said support includes financing through Agribank and programmes focused on mechanisation, land development and water infrastructure to improve food security and production.
Shafudah rejected claims that fiscal consolidation harms growth.
She said borrowing-led growth is not sustainable and that the budget focuses on infrastructure, agriculture, youth employment and value addition while supporting private sector growth.
She said the government will strengthen governance through better financial management, tighter spending controls and improved procurement systems. Plans are also in place to improve monitoring and evaluation.
Shafudah called on members of parliament to support the appropriation bill and said oversight will be important to ensure proper implementation.
