Finance Minister Erica Shafudah says the 2024/25 national budget—crafted amid ongoing global economic uncertainty—holds the potential to make a lasting impact on Namibia’s domestic economy, if fully implemented.

Responding to concerns raised by Members of Parliament during budget deliberations, Shafudah acknowledged critical issues including youth unemployment, poverty, housing, and sanitation. However, she emphasized that these challenges are unfolding within a context of limited resources.

“These issues are urgent,” she said, “but not all can be addressed at once.”

Over the past weeks, MPs raised concerns about the high proportion of funds allocated to operational and personnel costs in comparison to development spending.

“Indeed we agree with you,” Shafudah responded, “because empirical evidence indicates a positive relationship between economic growth and development expenditure. The GRN has a clear understanding of this relationship, and as a result, we have looked at the amounts allocated to the budget from 2023 to 2024 compared to what we have projected in 2025-26. We can see a budget that has increased gradually.”

She noted that while the government is committed to increasing the development budget, implementation still faces obstacles—particularly institutional capacity and timing mismatches between budgeting and execution.

On youth employment, the minister highlighted increased efforts through institutions such as the Development Bank of Namibia and AgriBank to create opportunities and expand targeted programmes.

“Allocations are made to cater for youth programmes for skills development and capacity building. Among the programmes are youth skills basic facilities and SME financing strategies. We are progressing; we will see how the youth will be benefitting from these I have highlighted.”

Addressing the country’s debt trajectory, Shafudah reassured Parliament that the government is pursuing macroeconomic reforms to stabilise and gradually reduce public debt. These include tighter expenditure controls, enhanced revenue mobilisation, improved compliance, and growth-enhancing initiatives.

“As a result, GRN revenue as a representative of GDP is projected to stabilise. In this regard, the government has achieved a positive primary budget balance in 2023-24, which stood at 3% and is projected to remain over the period. What this means is that with the positive primary balance, the government can cover the non-interest expenditure through its own revenue, which is the condition required to achieve sustainable debt reduction.”

On calls for an increase to old-age pensions, Shafudah said the government intends to adjust grants gradually, based on the availability of resources, noting that an immediate increase is currently unaffordable.

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Joleni Shihapela