Edgar Brandt
Maihapa Ndjavera

Finance minister Iipumbu Shiimi yesterday tabled the mid-term budget for the 2020/21 financial year, consisting of N$841.6 million, with no new allocations being made but rather reallocation to priority areas. 
Shiimi proposed that the lion’s share of the reallocation, or N$326.4 million, be allocated to the basic education ministry.  
The freed-up funds announced in yesterday’s mid-term budget review consist of N$701.6 million realised from the operational budget and N$140 million from the development budget. 

The finance minister emphasised the proposed reallocation of budgetary resources leaves the overall expenditure allocation for the current financial year budget unchanged at N$72.8 billion. 

“The proposed reallocations are to meet resource shortfalls for the provision of infrastructure and essential services in the sectors such as basic education, health and social services, water, home affairs and safety and security and Electoral Commission of Namibia,” said Shiimi. 
He added that the development budget ceiling has been increased by N$100 million, from N$6.41 billion to N$6.51 billion. 
Shiimi explained that this mid-term budget averts deep expenditure revisions and protects spending which enhances long-term growth and the provision of essential goods and services. 

“It avoids sudden withdrawal of resources from the national programmes dedicated to combating Covid-19. It enhances allocative efficiency by reallocating resources to priority programmes where funding is required for better outcomes,” he noted.   
The finance minister explained that N$140 million was realized from respective ceilings of the development budget for reallocation to various budget votes in addition to the N$100 million, bringing the total amount of N$240 million for reallocation to the development budget. 

He continued that N$701.6 million was realised from the non-interest operational budget of which N$601.6 million is proposed for reallocation across budget votes within the non-interest operational budget. 
Meanwhile, the total non-interest budget was reduced by N$767.1 million, from N$57.92 billion to N$57.15 billion, of which N$667.1 million is reallocated to statutory expenditure to cater for increased statutory spending needs. 
Economic analysts agreed that the mid-term budget held no real surprises, saying that allocations were mostly made in line with expectations to mitigate the devastating impact of Covid-19. 

Reactions 
Economic lecturer at the University of Namibia Omu Kakujaha-Matundu questioned what would drive growth if Namibia’s main trading partners are also expected to record negative or low growth next year.
 He said even an economic powerhouse like China is only expected to grow by around 1%. 
 “The tourism sector is unlikely to recover at least until 2022, as an optimistic prediction for a viable and effective vaccine against Covid-19 is only in the first quarter of 2021. More loss of employment across sectors is expected over the next of two years or so,” Kakujaha-Matundu said, adding domestic economy is likely to contract more before it recovers. 

“What is there to stimulate the economy? This sounds like a phantom balancing by a politician rather than informed by facts on the ground. I expected to hear concrete measures, but the minister just referred to the same old of Harambee and the African Development Bank loan, which so far has yielded marginal results. Good talk, but I think we have grown immune to it, so the taste is in the pudding,” said Kakujaha-Matundu. 

Also commenting, managing director of Sanlam Investments Tega Shiimi Ya Shiimi, said that as with the minister’s first budget earlier this year, he had very little to work with and that Covid-19 further worsened his options. 
“The stated policy reforms are encouraging, and one would hope that there is political will to roll these out efficiently, effectively and timeously. Policy certainty and reform is critical in attracting necessary investment into our ailing economy, both domestically and internationally. Although not enough, it is also encouraging to see further allocations to the development budget,” said Shiimi Ya Shiimi.  
Lameck Odada, an economics lecturer at the Namibia University of Science and Technology, also noted that the budget was delivered largely as expected. 

“The question is how did he decide the reallocation? I see public enterprises are still supported. Very interesting that I don’t see anything related to online learning, especially devices and cost of data. Now again, how will the implementation be monitored? Very good on paper but there will be a need for knowing how monitoring and evaluation will be done. In short, we should get a detailed document showing the specifics of how these objectives will be implemented, monitored and evaluated,” said Odada.