Economists call for budget clarity

Economists have called on government leaders to ensure policy stability and clarity ahead of the upcoming national budget statement. These calls were made this week in Windhoek during a national pre-budget discussion co-hosted by the Capricorn Group, in collaboration with the Economic Association of Namibia (EAN), the Hanns Seidel Foundation Namibia, and High Economic Intelligence (HEI).

During the discussion, experts warned that high levels of uncertainty could lead to reduced business investment. “Investors want certainty. They do not want to hang mid-air. Investors want to know what they are signing up for,” HEI MD Salomo Hei said.

Hei said the country’s oil discoveries present a significant opportunity to boost the economy. “We must therefore try to use this as an opportunity to deal with our issues of high unemployment, high inequality, and exclusive growth, and bring it into inclusive growth,” he said.

Hei specifically referred to the proposed Namibia Investment Promotion and Facilitation Bill, which aims to modernise, promote, and regulate both foreign and domestic investment, replacing the 1999 Foreign Investment Act. The Bill emphasises sustainable development and job creation, introducing sector reservations and stringent investment approval processes.

Standard Bank Group economist Helena Mboti said she wanted to see a greater focus on creating an entrepreneurial mindset to confront challenges such as high levels of youth unemployment. “The fiscal space is very tight, but we must spend. For me, the most critical trade-off is how we manage expenditure,” she said.

“The key things will be education and creating an entrepreneurial mindset so we can create more jobs. I have noticed that in the last budget, the Finance Minister focused a lot on youth unemployment and was more inclined to give people initial experience through internships. The country needs more CEOs and not more interns. Because one CEO can create many permanent jobs, I think ensuring the minister can do that without straining the fiscal budget would be the key for this budget,” Mboti said.

Jesaya Hano-Oshike, vice-chairperson of the EAN, said a balanced budget is required to address concerns about capital project implementation. “How do we get employment right in Namibia? Are we employing more people, or are we going to give more money to capital projects to grow the economy? Even with capital projects, we have heard that implementation is very poor. One of the biggest trade-offs the government had to make was to ensure that we have enough money for capital projects while ensuring civil servants’ budgets are met,” he said.

Capricorn Asset Management chief economist Floris Bergh said there is a need for a meaningful manner to manage the fiscal deficit. “What we have heard over the last fiscal year is that we really have a tight situation in the capital markets with respect to government finances, specifically the deficit and what was needed to fund the deficit and maturities. We have to get a trade-off between fiscal sustainability and the big promises and plans that sound very good,” Bergh said.

Bergh said he would like to hear a very keen awareness of available resources from the minister and the administration.

Reflecting on the event, Capricorn Group CEO David Nuyoma said the authorities must address gaps in the implementation of government policies.