Through creation of jobs and bringing about necessary improvements in the welfare programs available to the common people, Namibia budget 2011-12 will look to continue the trend of national economic recovery.
The 2011-12 budget has been presented at a time when the African country has come out of one of the worst economic recessions in its history. Its job and overall economic growth have been affected significantly because of the present economic condition.
The government, though, has been able to bring about economic recovery by taking necessary steps and not putting too much pressure on the overall economic situation.
Highlights of Namibia Budget 2011-12:
The 2011-12 Namibia budget will focus on securing macroeconomic sustenance.
In 2011-12 fiscal Namibia could face a budgetary deficit that accounts for 9.8 percent of the gross domestic product.
The budget will focus on speeding up economic progress along with various short, long and medium-term developmental goals.
In the upcoming fiscal a Targeted Intervention Program for Employment and Economic Growth (TIPEEG) will be put in place by the government. This initiative will focus on critical sectors such as agriculture, tourism, transport, and housing and sanitation.
An aggregate amount of 9.1 billion Namibian dollars has been earmarked for the medium term expenditure framework (MTEF) in the 2011-12 budget.
N$ 14.7 billion will be spent in job creation. It is estimated that 104,000 indirect and direct jobs will be created as a result of the TIPEEG.
Financial institutions dealing in developmental activities can now be enabled to invest more to encourage entrepreneurship and productive economic operations.
Financial institutions and capital markets will be provided assistance with capacity building. It is expected that this will make Namibia s financial system a more credible one.
The Namibia budget 2011-12 will focus on areas like housing, roads, water, rail network, energy, airports and seaports, telecommunication, office space and business facilities.
It is expected that at the end of the 2011-12 fiscal Namibia will receive revenues amounting to N$ 28 billion, which will represent a 24% addition from 2010-11 fiscal when total earnings are expected to be around 22.5 billion Namibian dollars.
In 2011-12 the government will focus primarily on increasing revenue collection so that expense requirements can be met properly. It will bring into effect several measures that will expand the revenue base and use newer sources of income. It is expected that these steps will not weaken the regional and global competitiveness of Namibia.
It is expected that in 2011-12 the development partners of Namibia will provide it with 1.6 billion Namibian dollars. N$230 million will be provided from the State Revenue Fund.
The external grant support will cover important areas such as HIV/AIDS, infrastructure, environment, agriculture and education. Importance will also be put to improve financial accountability and planning. A synchronized development program will be implemented for the purpose.
The IT system, which is backing up the tax administration, will be improved to create a completely integrated system.
Namibia Budget 2011-12: Expectations:
The national government opines that for the 2011-12 budget to be successful the common people and the private sector will have to contribute properly. The medium term expenditure framework of the present budget is expansionary in nature.
The budget for 2010-11 fiscal helped in safeguarding Namibia from the after-effects of the global financial crisis and with the latest budget the African nation will be aiming to solidify its economic recovery.
The budget will also look to deal with several potential threats such as:
Global economic recovery
Increase in commodity and oil prices
Further uprisings in the Middle East and North Africa
Increasing food prices
In addition to these the Namibia budget 2011-12 is also supposed to address some other problems plaguing the national economy:
Shortage of skilled labor
Limited economic base
Experts feel that it might be difficult for the government to maintain the expanded budget in view of the various risks associated with revenue generation. The 2012 budget will also do away with supply related issues as they have been hampering the prospects of Namibia to achieve quicker and sustainable economic growth. Over the years these problems have also affected other areas of the economy like reduction of poverty and creation of jobs.
In 2011-12 tax revenues are expected to go up at a moderate rate because of improved performance of the mining sector and commodity prices. It is estimated that aggregate revenues and grants will comprise 28.5% of GDP in 2011-12 fiscal and increase to 29.1 percent of GDP in 2012-13 and 30.4% of GDP in 2013-14 fiscal.
The revenues in the upcoming fiscal could also fall if new SACU (Southern African Customs Union) Revenue Sharing Formula and trade agreements are accepted. The exports could also go down due to increasing value of the Namibian dollar and this is one medium term risk that can hamper the growth of revenues.