Shiimi tables maiden N$72 billion budget
Basic Education -------------------------------------N$14.2b
Ministry of Health-----------------------------------N$7.9b
Defense and Veteran Affairs----------------N$6.2b
Home Affairs, Safety and Security------N$5.95b
Political parties --------------------------------------N$102.8m
By Hilary Mare
FINANCE Minister Iipumbu Shiimi has tabled his maiden N$72.8 budget for the FY2020/21 which looks to mitigate the effects of Covid-19 and plant seeds for the future economic recovery.
Tabling the budget this week, Shiimi highlighted that appropriation bill, which excludes interest payments amounts to N$64.3 billion meaning that 16.4 percent of revenue is earmarked for the payment of interest payable on moneys borrowed.
“This is a single-year budget, reflecting the commensurate urgency of addressing the elevated once-off needs arising from the impact of Covid-19,” Shiimi noted.
In essence, non-interest operational expenditure is budgeted at N$57.9 billion, 8.8 percent more than the previous year, reflecting accelerated funding needs to fight COVID-19.
Shiimi explained that the development budget amounts to N$6.4 billion and given the weak revenue outlook, the budget deficit for FY2020/21 is estimated at 12.5 percent of GDP.
“This is a once-off rise in the budget deficit, as we seek to adequately respond to the challenges posed by COVID-19 on the economy and social strata. The budget deficit will be financed through a combination of own savings and domestic and external borrowing.”
In line with the previous budget sectoral allocation of 47.4 percent, the budget accorded 49.5 percent of the N$64.2 billion non-interest expenditure to social sectors. In this the Ministry of Health and Social Services is allocated N$7.95 billion, the Ministry of Basic Education, Arts and Culture receives N$14.2 billion, Higher Education, Training and Innovation receives N$3.3 billion of which N$900.2 million is for UNAM, N$503.9 million for NUST and N$1.5 billion for NSFAF, including a guarantee-backed loan facility of N$238 million.
“The Ministry of Gender Equality, Poverty Eradication and Social Welfare is allocated N$5.3 billion, 8.2 percent of the total allocation, mainly to cater for the social safety nets, which form the first line of defense against poverty for the vulnerable members of society, especially during this time of COVID-19,” Shiimi noted.
Economic and infrastructure sectors
Economic and infrastructure sectors were accorded a total of N$14.2 billion which is further supported by investment outlay by the Public Enterprises and off-budget project financing
In this regard, transport receives N$2.4 billion, for the completion of on-going phases of capital projects with contractual awards. This allocation is supported by N$1.4 billion from the Road Fund in FY2020/21, the N$644.94 million for road project financing under the African Development Bank (AfDB) loan arrangement during the budget year, with the remainder of N$1.7 billion to be disbursed over the next two years for road and rail infrastructure financing under the AfDB-funded Economic Governance and Competitiveness Program.
The Ministry of Agriculture, Water and Land Reform receives N$1.3 billion, of which N$929.2 million is earmarked for commencement of the water infrastructure refurbishment and development program.
The Ministry of Finance is allocated N$6.2 billion, about 9.7 percent of the total allocation. Out of this amount, N$2.6 billion is allocated for PSEMAS. A total amount of up to N$772 million is for the Emergence Income Grant, while the Wage Subsidy Program in collaboration with Social Security Commission is allocated N$400 million.
An amount of N$330 million is for government’s contribution to GIPF for Political Office Bearers and N$102.8 million for political party funding. N$90 million is allocated to AgriBank to support its loan book. Similarly, a total of N$64.0 million is allocated to DBN for SME and youth entrepreneurship support facilities. A total of N$210.9 million is earmarked for the transitional arrangements for the establishment of NAMRA in the budget year, while N$36.9 million, N$36.6 million and N$2 million are allocated for the Financial Intelligence Centre, Central Procurement Board and Financial Literacy Initiative respectively. The balance is for personnel expenditure and operational costs and the Contingency Fund.
“Vote Industrialization and Trade is allocated N$174.8 million to facilitate trade and industrialization objectives.”
Public Safety and Order
The Public Safety Sector takes up the third largest share of the budget allocations, totalling N$13.1 billion or 20.6 percent of the total allocation.
The Ministry of Home Affairs, Safety and Security receives N$5.95 billion, Defense and Veteran Affairs is allocated N$6.2 billion, the Judiciary receives N$375.7 million, while the Ministry of Justice allocated N$480.7 million, and the Anti-Corruption Commission receives N$61.6 million to support activities to fight corruption.
The Administrative Sector receives the least allocation of N$4.5 billion, equivalent to 6.9 percent of the total allocation.
N$1.7 billion is allocated to the urban and rural development to support, among others, increasing provision for sanitation infrastructure, land servicing and bulk water supply services, sewage and electricity, N$ 1.0 billion for International Relations and Cooperation, N$131 million for the National Assembly and N$101.3 million for the National Council.
“For the FY2019/20, a total of N$324.2 million was allocated to the Contingency Fund. I have distributed the corresponding information regarding the utilization of the Contingency Fund,” said.