Shiimi delivers drought-targeted budget

Finance minister Ipumbu Shiimi oriented his mid-term budget toward the drought currently ravaging Namibia, resulting in increased expenditure of N$2.6 billion for the operational budget. The targeted expenditure was a means to ensure that at least 300 000 households will be able to benefit from the government’s drought-relief programme. “We have availed an additional N$698.8 million for drought-relief provisions under the Office of the Prime Minister, primarily to extend the food distribution programme to eligible communities. This allocation provides for the drought-relief programme to be expanded to cover 308 750 households until 30 June 2025,” Shiimi said. The allocation increases the total drought relief budget for fiscal year (FY) 2024/25 to well over N$1.4 billion, he said. “This is a significant resource envelope, which highlights the importance of instituting climate resilience policies and measures to minimise the impact of weather events on livelihoods going forward."Far-reaching effectsAccording to Shiimi, the ongoing drought situation has far-reaching effects on the economy as well as the broader population, specifically the most vulnerable members of society. “To mitigate the potential adverse impact thereof, we have made the requisite expenditure provisions both through drought relief for food distribution and support to farmers, providing funding for the green schemes as well as strengthening the relevant social protection schemes to minimise loss of livelihoods,” the minister said. The National Disaster Management Unit and Agribank will also render support to farmers whose operations are being impacted by the drought. “The National Disaster Management Unit will continue to roll out the drought-relief programme to affected regions and communities at a cost of N$129.8 million per month. In addition, through Agribank, we have rolled out a dedicated subsidy programme to support farmers whose operations have been adversely affected by drought conditions at a total cost of N$126.3 million during the current financial year,” Shiimi said. Expenditure priority areasTouching on other expenditure priority areas, Shiimi said the education ministry was expected to construct 512 classrooms during the current fiscal year, of which 296 classrooms were already completed by September."The agriculture, water and land reform ministry has so far completed 115 boreholes and 20 earth dams in rural communities, with another 83 boreholes and 34 earth dams in the pipeline. We are further pleased to note that procurement has been finalised and construction has commenced for the Rundu Water Treatment Plant as well as the second Ohangwena Aquifer Well Field,” he said. “Furthermore, the Environmental Investment Fund of Namibia (EIF) has successfully drilled over 70 boreholes this year valued at N$40 million, funded through both public and donor resources, benefitting approximately 35 000 people and more than 30 000 livestock."The mines and energy ministry was also able to fast-track its rural electrification programme, he noted.“During the current financial year, 18 public institutions and 88 rural households have been added to the national grid with another 39 public institutions and about 1 000 households still in the pipeline to be connected."Tax amendments Touching on tax amendments, Shiimi said the non-mining corporate tax rate would see a reduction to 31% in April, and a further gradual reduction to 28% during FY2026/27. He also announced a further extension to the government’s tax amnesty programme, which was supposed to expire today. “With regard to the tax amnesty programme, we have received numerous calls for an extension from various sectors. In line with our commitment to strike a balance between collecting revenue and boosting the investment climate, we hereby extend the tax amnesty programme by another two years until 31 October 2026,” he said. According to Shiimi, the extension has considered the two years of the Covid-19 pandemic, which significantly reduced the income of many taxpayers. “The relief value proposition remains unchanged. That is: Interest and penalties will be fully written off if outstanding capital is fully settled before 31 October 2026. Again, I would like to reiterate that this is the final extension of this programme, and we urge all concerned taxpayers to participate before the due date."Macroeconomic trends Meanwhile, the government’s budget deficit was expected to remain moderate at 3.2% for 2024/205, Shiimi said. “We still estimate the overall budget deficit for FY2024/25 to remain at 3.2% of gross domestic product (GDP), with a moderate improvement in the primary surplus relative to the levels estimated in the main budget. Furthermore, in nominal terms, the deficit is revised downwards slightly by N$277.3 million,” the minister said. The moderation in the deficit will result in the government making changes to its borrowing plan for the remaining months of the financial year as necessary, Shiimi said. The total debt stock as at the end of March stood at N$153.7 billion, equivalent to 65.1% of GDP, a moderation from 67.6% of GDP in the last financial year.

Shiimi delivers drought-targeted budget

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Namibian Sun 2024-11-21

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Shiimi delivers drought-targeted budget

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Namibian Sun 2024-11-21

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