Namibia splashes on civil servants
Presenting a supplementary budget in the National Assembly on Wednesday, Finance Minister Saara Kuugongelwa-Amadhila said that total revenue for the 2006/7 fiscus are now estimated at about N$16.2 billion, an increase of N$931 million than originally anticipated.
Total revenue for the 2005/fiscus stood at N$13.1 billion, which was 6.1 percent more than projected.
Central government debt in the 2005/6 financial year stood at N$12.8 billion, which is 32.2 percent of gross domestic product (GDP), a two percent decline from the debt stock of the 2004/5 fiscus.
Kuugongelwa-Amadhila attributed the increase in government revenue in the current budget to increased N$321 million tax bonanza from the Southern Africa Customs Union (SACU) and an additional N$648 from government’s sales of its holdings in mobile telephone network, MTC.
Growth, which has so far been buoyed by a boom in output in the mining sector, was however constrained in the first quarter of the year, Kuugongelwa-Amadhila said.
She said that the additional funding was marginal adding that it was covered by proceeds from the regional customs union (SACU).
“This means that despite the expenditure revision, I expect the budget surplus to exceed the main budget estimates by N$798.7 million,” Kuugongelwa-Amadhila said.
In March this year, Kuugongelwa-Amadhila said that government was on track to achieve a projected budget surplus in the 2006/7, as revenue rises from SACU with growth expected to quicken after slowing in 2005.
Kuugongelwa-Amadhila however said that government should shy away from supplementary budgets.
“Notwithstanding the positive developments on the revenue side, prudence therefore commands not to spend additional revenue,” she said.
The finance minister said that she was allocating N$196.6 million against a previous allocation of N$190.8 million to improving conditions for civil servants.
A cash flush Kuugongelwa-Amadhila announced an across the board 5 percent salary increase for civil servants splashing N$305.5 million for the whole public service.
Other areas, which benefited from the supplementary budget, include the medical aid fund for public servants which have been allocated an additional N$80 million from the previously budgeted N$456 million, about N$41 million for the police and prison services.
Kuugongelwa-Amadhila said that Namibia was still on course for budget surplus N$921.2 million, which translates to 2.2 percent of gross domestic product (GDP).
Namibia has steadily improved its economic credentials over the past couple of years and in December last year became the third country in sub-Saharan African to receive an investment grade rating after regional economic powerhouse, South Africa and tiny Botswana.
Fitch Ratings assigned Namibia an investment grade credit rating of BBB-with a stable outlook, citing the country’s stable policy environment, which include a low debt burden and current account surpluses.