The minister announced before the National Assembly a budget amounting to N$65 billion, less than N$62.5 billion for 2017/18 financial year.
“This budget comes at a time after the Namibian economy had endured its most precarious phase. It is an economy at a turning point and this budget is a funding compact for growth, bringing about jobs, less inequality, less poverty and improved service delivery.
“It is a fiscal proposition to further consolidate non-core spending and align resources to core national priorities. It is a budget which offers policy consistency with the pro-growth, pro-poor policy stance of long duration,” Schlettwein said in his budget statement.
He noted that the budget is anchored on the gains of the necessary but difficult decisions that treasury took since 2016, he said, in reference to austerity measures that government instituted to stem overspending.
“We had to make deep but necessary budget cuts to ensure fiscal sustainability and protect macroeconomic stability” he added.
He said the budget provides a three-pronged set of fiscal policy actions. First, the budget policy stance proposes continued reduction in the budget deficit, in line with the medium-term fiscal consolidation policy stance.
Second, it provides for a growth stimulus package, centered on industrial development and logistics hub capital investment program and SME and entrepreneurship support initiatives.
And thirdly, it proposes tax policy changes which generate about N$500 million annually in additional revenue to support the implementation of the fiscal adjustment phase.
Schlettwein noted that over the past two years, the government has managed to reduce budget deficit been reduced from a cumulative 3 percent or 1½ percentage points annually from 8.2 percent in FY2015/16 to an estimated 5.4 percent by FY2017/18.
Budget expenditure as a proportion of GDP has reduced from 42.8 percent in FY2015/16 to an estimated 38.7 percent in FY2017/18, which are projected to continue declining over the next three years.
For FY2018/19, total revenue is estimated at N$56.70 billion, about 1.3 percent decline from the estimated outturn for 2017/18, due to the decline in SACU (Southern Africa Customs Union) revenue and the slowdown in diamond corporate tax and related income as a result of operational factors, the minister said.