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Opening Remarks
Honourable Speaker, Honourable Members
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The last Budget focussed on prudent fiscal management and the need to contain public debt within sustainable and affordable levels. This emphasis had to be made as a result of significant shortfalls in revenue which in turn were brought about by the significant strengthening of the Namibia Dollar. We had to focus on policies aimed at bringing down budget deficits and the
total debt stock.
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These policy interventions yielded the desired results. We managed to bring down the deficit from an all time high of 7.2 percent to 3.6 percent and the total debt stock stabilised. At the same time, we significantly improved revenue collections and experienced increased earnings from the SACU Revenue Pool. On the expenditure side, we managed a slowdown, albeit not significant. The demands for resources did not diminish and pressure on public resources remains high. The current situation, therefore,
determines that we have to continue with fiscal prudence, but that we must at the same time engage in activities that grow the economy.
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Last year, I also introduced a programme budget. This was the first time that we made use of such a format, which focused on programmes, the specific activities within programmes and their outcomes. We had some teething problems with it. I, however, remain confident that this approach is more transparent as it shows how public resources are allocated to priorities and how much expenditures impact on outcomes. This year, the programme budget has been consolidated further, but the process must be further refined.
Honourable Speaker
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In the SWAPO-Party Election Manifesto we have committed ourselves to poverty reduction and job creation through accelerated economic growth and a more equitable distribution of income. To achieve this we maintained education, health, social welfare, infrastructure and productive sectors as priorities.
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The choices and trade-offs that had to be made again showed that Namibia is still in a position where the needs for resources are much higher than what becomes available from own sources. This forces us to reach a consensus about priorities and I am satisfied that we have indeed achieved such a consensus.
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Firstly, this budget places emphasis on economic growth which is pro poor. High priority is given to the development of the rural areas where most of the poor reside. Growth is promoted through improved resource allocations for the development of infrastructure such as roads and rails, schools, health facilities, water and electricity. This will improve the living
standards of communities in these rural areas through the creation of jobs during construction and access to markets and services needed for economic advancement. We are also allocating more resources to welfare programmes that target the most vulnerable.
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Secondly, this budget is set within macro economic benchmarks which ensure stability. The SWAPO-Party Election Manifesto pledges our commitment to low debt levels, both domestic and foreign, without reducing investment. This is to be achieved by promoting investment in the productive sector and supporting interventions that would create wealth and employment.
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This Medium Term Expenditure Framework and the proposed budget for the coming financial year, therefore, strikes the balance between two priorities which is improved fiscal consolidation on the one hand and increased investment for economic growth on the other.
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My introduction will, as is customary, set out the fiscal and economic background and will explain the resource allocations using programme budgeting and medium term plans. I shall also highlight the main drivers for the pro growth, pro poor approach.
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