Chamwe Kaira
In light of geopolitical tensions and economic disruptions, achieving the proposed fiscal outcomes for the 2026/27 financial year will require significant improvements in how offices, ministries and agencies (OMAs) manage their daily operations.
Prime Minister Elijah Ngurare says Namibia is standing at a critical juncture as it prepares to implement its 2026/27 national budget of N$87.9 billion, a fiscal framework he says was tabled under initially stable global conditions that have since shifted sharply due to the ongoing war in the Middle East.
Ngurare told a budget reform rollout workshop held in Windhoek that the changing global environment is already exerting pressure on Namibia’s economy.
He warned that higher imported inflation through fuel and food prices, rising shipping and import costs, and weaker external demand are likely to weigh on growth prospects and fiscal stability.
He further noted that these developments highlight the need for stronger policy discipline, resilience and structural reform as the government moves to safeguard macroeconomic stability.
At the time of the budget’s presentation, public debt stood at N$174.6 billion, representing 65.2% of GDP, while the fiscal deficit for the current year is projected at 5.5% of GDP.
Given this situation, Ngurare said achieving the targeted fiscal outcomes for the 2026/27 financial year would depend heavily on improved operational efficiency across all OMAs, particularly in managing expenditure and ensuring strict budget discipline.
He stressed that the government’s broader fiscal consolidation plan, which aims to reduce the deficit from 5.5% of GDP in 2026/27 to 3.3% by 2028/29, is not merely a technical adjustment but a strategic imperative to restore fiscal space, strengthen investor confidence and place public finances on a more sustainable path.
“This adjustment will require discipline across all votes, stricter control over non-priority expenditure, and a shared understanding that every dollar saved today creates room for more productive investment tomorrow,” he said.
Ngurare further warned that achieving the required fiscal adjustment would demand annual savings of about N$2.3 billion over the medium-term expenditure framework period, calling for early identification of savings, protection during execution, and safeguards against spending slippages.
He added that fiscal consolidation cannot rely on spending cuts alone but must also be supported by stronger economic growth through well-targeted public investments that crowd in private sector participation, expand economic opportunity and improve service delivery.
To drive this approach, the government will pilot outcome-based budgeting in eight offices, ministries and agencies from the second quarter of 2026.
The offices include the ministries of education, innovation, youth, sports, arts and culture; health and social services; home affairs, immigration, safety and security; agriculture, fisheries, water and land reform; finance; industries, mines and energy; environment, forestry and tourism; and works and transport.
The rollout will later be expanded to remaining OMAs from the 2027/28 financial year, with full implementation expected within the current MTEF period running from 2026/27 to 2028/29.
Ngurare also issued a strong warning against the diversion of development funds to recurrent expenditure, saying such practices undermine long-term growth and must come to an end.
“Capital investment is the engine of long-term growth,” he said, adding that every dollar diverted from infrastructure, education, water systems or digital platforms represents a deferred cost to future generations.
