Economic Resurgence: Namibia’s Budgetary Governance Strategy

Patience Masua

The recent budget announcement by Minister Shiimi marks a pivotal moment in Namibia’s fiscal strategy, particularly with its strategic three-pronged approach aimed at bolstering economic resilience and social welfare when the masses need it most.

The significant tax amendments, including the doubling of the income tax threshold for individuals to N$100,000 and the reduction in non-mining company tax rates, signal a concerted effort to provide relief to low-income earners and stimulate domestic demand. This move not only puts more money directly into the pockets of taxpayers but also fosters a more conducive environment for private sector growth and investment. Additionally, the significant increase in social spending, which is best illustrated by the 23.2 percent increase to the Ministry of Gender, Poverty Eradication, and Social Welfare, underlines the government’s unwavering commitment to addressing poverty and inequality.

By enhancing social safety nets, such as increasing old-age and disability grants, the budget prioritises protecting the most vulnerable segments of society, ensuring that they have access to essential services and support. Simultaneously, the surge in capital spending, with allocations totaling N$58.9 billion over the Medium-Term Expenditure Framework, reflects a strategic push to bridge infrastructure gaps and stimulate economic growth. Investments in critical sectors like transport, agriculture, and energy not only improve connectivity and efficiency but also lay the groundwork for long-term sustainable development, fostering job creation and economic diversification. Together, these measures demonstrate a holistic approach to budgetary planning, one that seeks to uplift the disadvantaged, empower the youth, and pave the way for a more prosperous future for all Namibians.

Namibia is set to hold elections later this year. The government’s commitment to infrastructure development and economic growth will likely be a key issue in the upcoming elections as voters assess the impact of these initiatives on their daily lives and future prospects. The outcome of the elections will determine the direction of Namibia’s development agenda and the continuation of these crucial investments in key sectors. The increased investment in key sectors will create new opportunities for businesses and individuals to thrive, ultimately driving economic growth and reducing inequality. By prioritising sustainable development and inclusive policies, Namibia is setting the stage for a more equitable and prosperous society for generations to come.

The budget recognises the potential of youth with targeted investments and programmes for young people. With over N$2.2 billion allocated to youth-focused initiatives, including skills development, entrepreneurship support, and sports promotion, the government is laying the groundwork for a dynamic and empowered generation. By investing in education, training, and job creation, we’re not just building careers; we’re nurturing leaders who will drive Namibia’s progress for decades to come.

Tax Break

In a move to ease the financial burden on ordinary Namibians and stimulate domestic demand, the budget introduces significant tax breaks and reforms. Increasing the income tax threshold from N$50,000 to N$100,000 injects N$646.0 million directly into the pockets of taxpayers, providing much-needed relief to low-income earners. The lower tax rates for non-mining companies and the implementation of a 10% dividend tax ensure a more competitive business environment while increasing revenue mobilisation.

This budget isn’t just about balancing the books; it’s about balancing the scales of opportunity and prosperity. By prioritising the needs of the poor, investing in the potential of youth, and lightening the tax burden on citizens, the government is charting a course towards a more equitable and vibrant future. As we head to the polls, let’s remember the promise of this budget—to build a nation where every Namibian has the chance to thrive and succeed. It is a strategic blueprint aimed at addressing the country’s economic challenges while ensuring responsible financial management. It is up to us to make this vision a reality.

The budget makes a strong commitment of N$2.5 billion for the development of railway infrastructure, with a focus on major expenditures on the modernization of important railway segments. Additionally, a substantial capital budget of N$970 million is allocated to the Ministry of Education, Arts, and Culture for the construction and renovation of educational facilities. Furthermore, N$700 million is dedicated to informal settlement upgrading, signalling a commitment to improving living standards and access to housing opportunities for Namibians.

Revenue generation is robust, with collections reaching N$72.0 billion, indicating a collection rate of 90.6% over the first 10 months of the financial year. Notable contributors to revenue include corporate income tax, VAT, and withholding tax on services. Projections foresee revenue growth averaging 5.0% over the Medium-Term Expenditure Framework (MTEF), underpinning fiscal stability and sustainability.

Tax reforms are geared towards enhancing competitiveness and attracting investment. The reduction of the corporate tax rate to 28% by FY2026/27 and the introduction of a 10% dividend tax aim to align Namibia’s tax regime with regional and global standards, fostering an environment conducive for business growth. With robust revenue generation, targeted investments, and prudent debt management, the budget sets the stage for sustainable growth and prosperity in Namibia.

It is crucial for every citizen to carefully consider the implications of this budget and the potential impact it could have on their lives and the lives of others. We can work together to create a more just and prosperous society. This budget isn’t just about numbers on paper; it’s a bold statement of intent—a commitment to uplift the marginalised, empower the youth, and lighten the tax burden on hardworking Namibians. It evidently demonstrates a steadfast commitment to “leave no one behind,” a key element of the legacy of our departed President Geingob.

*Patience Masua is Member of Parliament and a Member of the Standing Committee on Constitutional & Legal Affairs, and the Committee on Foreign Affairs and Defence

Related Posts