CHAMWE KAIRA
The government has announced plans to settle the legacy debts of state-owned companies, including Air Namibia, the National Fishing Corporation of Namibia (FishCor), the Namibia Broadcasting Corporation (NBC), New Era, Roads Contractors Company (RCC), TransNamib, and the University of Namibia (UNAM), as disclosed by the Ministry of Finance and Public Enterprises this week.
The total outstanding amounts owed by these entities are as follows: N$858 million for PAYE, N$140 million for income tax, N$338 million for VAT, and N$19 million for import VAT, with the total debts amounting to N$1.35 billion.
Air Namibia’s debts total N$49 million, FishCor, N$107 million, NBC, N$33 million, New Era, N$43 million, RCC N$190 million, TransNamib, N$326 million and UNAM, N$605 million.
The ministry stated that the total expenditure for the 2024/25 financial year would include provisions for addressing the legacy tax liabilities of these seven public enterprises. Additionally, operational expenditure for the same period includes N$1.7 billion earmarked for a 5% salary increase for the civil service to bolster domestic demand. Furthermore, provisions have been made to enhance social safety nets to safeguard livelihoods amidst high inflation.
The ministry highlighted that total expenditure is expected to remain stable, responding to socio economic and developmental challenges exacerbated by the impacts of COVID-19, external shocks, and the ongoing drought. Expenditure is estimated to be N$100.1 billion in 2024/25, increasing to N$103.6 billion by 2026/27. This gradual rise in expenditure reflects a balancing act between fiscal consolidation efforts, deficit reduction, and debt stabilization.
In terms of development expenditure, the 2024/25 budget includes substantial allocations for infrastructure, particularly in education, housing, rail, and water sectors.
The budget deficit is projected to remain steady at 3.2% of GDP in both 2023/24 and 2024/25. Over the Medium-Term Expenditure Framework (MTEF), the budget deficit is anticipated to average around 3.4% of GDP, indicating a downward trend. The planned redemption of the Eurobond in 2025/26 is expected to further accelerate the moderation in the debt stock, reaching 56.3% of GDP in the final year of the MTEF.
