By: Josef Kefas Sheehama
The Minister of Finance Hon. Iipumbu Shiimi is set to table the 2023-2024 budget on the 22 February 2023. The total FY2023/24 is projected to be in the range of N$73 billion.
The upcoming Budget 2023-24 should focus on protecting and driving the recovery of lives and livelihoods of Namibians, rebuilding resilience of the economy and catalyzing socio-economic reforms. With this in mind, we expect a change in policy direction focusing more on Infrastructure, manufacturing and agriculture to address unemployment, cushion citizens facing flood and special reserves of the victim. Furthermore, the human capital development programme, that covers key sectors of education, health and green hydrogen technologies are projected to take the largest share amounting, followed by security, integrated transport infrastructure, services and agriculture. Recognizing and correctly valuing the performance, critical importance and increasing role of agriculture in economic development have important implications for public sector budgetary allocations and actual expenditures in agriculture, which continue to be low and inadequate. It needs to be recognized, however, that as Namibia moves from a stage of agriculture-based development, either the percentage share of primary agriculture or the percentage share of expanded agriculture to GDP will decrease significantly.
This is because other sectors of the economy, especially the service sector, become much more dynamic, therefore growing faster especially in countries entering higher stages of development. It does not mean, though, that the agriculture or agribusiness sectors, become less important.
At the same time, more needs to be done to increase rural living standards, reduce regional income differentials and lower the rate of rural-urban migration, while concomitantly increasing agricultural production and enhancing Namibia’s food and nutrition security. The Government of Namibia should implementing a rural development strategy with focuses on large modern farms and family farming. The effective of implementing NDP5 and HPP2 will strengthening of Namibia’s position in agriculture. To make this shift, regulatory reforms which defines the principles of public investment, lays out a framework for attracting private investment to the agricultural sector while enhancing access to finance, and enhance responsiveness. Agricultural production must increase accordingly in order to meet socio-economic and food and nutrition security issues.
The adverse effects on land resources and climate change must be countered with continued efforts to increase inputs and sustainable climate smart practices; protecting agricultural land against fragmentation, erosion, and degradation; and shifting production toward higher-value products and introducing land-saving technologies.
Furthermore, Budget 2023-24 must focus on green hydrogen as a key energy resource. The biggest challenges facing Namibia are to develop and demonstrate green hydrogen technologies which are technically and economically viable and cost-competitive, and to create a robust supply chain and delivery mechanism for these technologies. Leveraging Namibia’s significant renewable energy potential to position Namibia as a top producer and potential exporter of green hydrogen should be a priority. An increase in investment in the sector will ultimately lead to better development and more jobs. It is also crucial for the government to support the sector to enable to promote hydrogen economic. Green hydrogen is a new but reliable technology for reducing carbon emissions in areas where electrification is ineffective. The growth of green energy is predicted to be among the fastest of any aspect of the energy revolution, generating specialized opportunities for businesses and investors.
Moreover, we cannot oversight manufacturing sectors. The manufacturing sector can potentially play a key role in the overall economic development agenda as well as initiatives geared at employment creation and effective reduction of poverty. We need to understand that the manufacturing sector is a big employer of both skilled and unskilled labour. If the manufacturing is at full capacity, the manufacturing sector also contributes significantly to GDP. In 2022 the Gross Domestic Product (GDP) increased by 5.6% during the second quarter. The largest contributors to growth in GDP in the second quarter were the manufacturing accounting for 12.1%, wholesale and retail trade 10.2% and agriculture 10%. According to NSA, the Namibia economy grew by N$5.4 billion compared to the N$43.2 billion recorded in the previous quarter of 2021. The main contributor to the GDP growth of 5.6% during the quarter under review was the mining and quarrying sector contributed 2.6% to the GDP growth followed by financial services with 1.1%. This means that the domestic economy expanded to N$48.6 billion in the second quarter of 2022. As the recovery in the economy continues, the risk of sector-specific tightening measures or removal of accommodation is growing. Therefore, we need to protect and grow our manufacturing industries by funding them, placing huge taxes and levies on imported goods, creating policy that would encourage more production and getting our infrastructure up to date.
Namibia belong to us. Therefore, it is our moral duty to conserve resources. We need conserve resources because they are the main source of the daily needs. Improving governance and enacting policies will help safeguard limited resources. Accelerating structural reforms to build tax administration capacity and investments in digitalization, enhance transparency, reduce illicit financial flows, and scale up domestic resource mobilization. The Executive Directors must begin to understand that, no matter how little budget allocated they must plays accountability, integrity and transparency.
Hence, in order to achieve this, all sectors of the economy need to get due attention and resources to ensure the delivery of essential services to the people and stimulate growth. They should focus on revamping the curriculum, and introducing education technology, skill development and quality improvement programs for teachers. His Excellency, Dr. Geingob promises improvement on Medical Aid, and enhance public and private partnerships in the health sector. The industry as well as people of the country have high expectations from this budget in terms of tax reforms. It is expected that budget 2023/2024 would talk about the policies and measures towards infrastructure development, boosting exports and promoting green economy. We cannot oversight digital transformation. The focus on these sectors is expected to help drive economic growth and create employment opportunities, while also reinforcing the government’s commitment to providing a better quality of life for all citizens.
To this end, the Budget 2023-24 should ensure that reform measures are implemented, focusing on the attainment of the V2030.
Therefore, to sustained poverty reduction, cost of living, volatility and growth over the next few years is possible if the government makes good its intentions to support the agriculture, manufacturing, rural infrastructure development and export sectors.