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Institute for Public Policy Research (IPPR)

National Budget 2005/06: The continuity candidate’s budget

Robin Sherbourne

Institute for Public Policy Research (IPPR)

IPPR Opinion No. 17

May 2005

SARPN acknowledges the Institute for Public Policy Research (IPPR) as the source of these documents.
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In the first budget of the new government, Finance Minister Saara Kuugongelwa-Amadhila deserves credit for trying to rein in public spending and borrowing after the budget deficit threatened to run out of control in 2003/04. Optimistically she forecasts a budget surplus by next year but there is little to suggest she will achieve that by squeezing spending which remains stubbornly stuck at 35% of GDP. No one can accuse the Minister of economic populism. This budget contains cuts in spending on combating crime, primary education and health care and no increase in the social pension – government programmes that directly touch the lives of the majority. Allocations to higher education and vocational training remain virtually unchanged despite the new Prime Minister’s wish to create a “knowledge economy”. Instead defence once again comes out the big winner. Namibia now spends more of its budget on security than on health.

It is said that the secret of being a successful minister of finance is to leave at the right time. It seems to have been good timing on the part of Nangolo Mbumba to leave his post as Namibia’s Minister of Finance in a year when the budget deficit rocketed to an unprecedented 7.5% of Gross Domestic Product (GDP) in 2003/04. His successor Saara Kuugongelwa-Amadhila has been left to pick up the pieces. Those who thought she might not have the bottle to make her mark have to recognise that she has already gone down as the first minister of finance to abandon the practice of doling out cash half way through the financial year when she took the bold step of cancelling the traditional additional round of spending last December. It looks as if she intends to carry on reining in spending and debt. Spending is set to rise by just a third of a percent this year.

View presentation by the Institute for Public Policy Research, 26 March 2004:
National Budget 2004/05 - 120Kb ~ 1 min

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