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MINISTRY

YOUR Money, OF
FINANCE

YOUR Budget. ________


NAMIBIA
2011/12 Citizens Guide to the National
Budget

NEW …
The Budget shows
how the Namibian
Government is
going to spend the
money you
contributed in
taxes. It is
important that you
know where this
money is being
spent and this What is the Budget?
guide to the budget
highlights some of The national budget primarily reveals how the government will raise money and how
the key spending this money will be spent.
areas.
Government can collect money through a variety of ways, such as income tax, mining
For more detailed tax, Value Added Tax (VAT), grants or trade taxes (for example, taxes on certain goods
information about imported into Namibia). The budget outlines how much money will be collected from
the budget please each source.
visit:
http://www.mof.gov. The budget then explains how the Government will spend this money towards meeting
na/budget.htm the national development objectives, from nurses to social grants to roads and schools.
Given that funds are limited, the Government has to make hard choices on what is not
only best for today’s generation, but also what is best for future generations.

The budget is prepared by Namibia’s Treasury, which falls under the Ministry of
Finance and is in charge of controlling the money that Government collects from taxes,
fines and other sources. However, all Government institutions are responsible for
delivering on the Government’s commitments in the budget.

Budget Cycle
The Budget is split into 4 key stages as shown in the diagram below. This cycle is
repeated every year.
At the planning stage, the
Government estimates the overall
amount of money available and
discusses with all government
institutions (for instance education,
health, police) how much money they
would need and how much money is
available.

Once the Cabinet has approved the


budget, the Minister of Finance
presents it in the National Assembly,
followed by debate at the National
Council as well as committee level.

Following approval, the budget is


formally implemented so that plans
can be carried out.
The final stage is the monitoring and auditing of the budget, to assess progress against
the targets outlined in the budget.
l

How is the Budget Funded? Size of the Budget


TAX CHANGES...
Income tax was Government revenue in 2011/12 is estimated to be
The total size of the budget
lowered as part of N$28.0 billion, an increase of N$5.3 billion from
spending in 2011/12 is N$37.7
the 2010/11 budget 2010/11. This increase is mainly due to a large
billion, a significant increase from
and the lower levels increase in Namibia’s share of taxes on goods
the N$27.7 billion spent in
have been imported by the Southern African Customs Union
2010/11.
maintained as part of members (the SACU Common Revenue Pool).
Revenue from other tax sources is also likely to
the 2011/12 budget. This year’s budget follows on
increase as the economy continues to recover from
from the large spending
Increases in Excise the downturn in 2009 (for example, tax collected
programmes of the last 2 years.
Duties (as per SACU from individuals and company profits has increased
agreement): as the economy recovers).
The high level of spending in the
last 2 years helped to shield the
- Unfortified wine In this year’s budget, spending is N$9.7 billion
economy from the negative
8.4% higher than revenue (meaning a deficit of 9.8% of
effects of the global economic
- Fortified wine 7.4% GDP). Therefore the Government has to borrow
downturn.
- Sparkling wine money through the issuance of Treasury Bills and
4.5% Bonds (that people, banks and other companies can
This year, the budget has been
- Ciders and buy and earn interest from) in order to cover its
expanded yet again to ensure the
alcoholic fruit spending. However, Government debt will be kept
economic recovery continues and
beverages 7.5% within a manageable level and the increased
to create jobs and improve
- Spirits 10.0% spending will help the economy in both the short and
welfare conditions in Namibia.
- Cigarettes 8.9% long term.
- Cigarette tobacco
8.2%
- Pipe tobacco
10.4%
- Cigars 6.0% This Month’s Q&A Tech

Focus of the Budget


The focus of the budget will be on the key challenges facing Namibia; the high
unemployment rate, poverty, inequality, labour skills shortages and a narrow industrial
base.

Starting this year the Government will implement a Targeted Intervention Programme
for Employment and Economic Growth (or ‘TIPEEG’). This programme is specifically
aimed at addressing unemployment by focusing on four key sectors, namely,
agriculture, tourism, transport and housing and sanitation. It is envisaged that
successful implementation of TIPEG will result into the preservation and creation of
about 104,000 direct and indirect job opportunities.

In transport for example, money will be spent on road construction and upgrading, rail
network development and management of road safety. A total of 33,000 direct and
indirect jobs are estimate to be created. Housing and Sanitation projects will focus
mainly on construction of low cost houses and urban/rural sanitation,
preserving/creating approximately 35,000 jobs. Tourism is a rapidly growing sector and
a significant generator of employment potential. The TIPEEG programme covers two
main programmes in this sector, tourism development and wildlife management. The
programmes will result in 10,000 job opportunities over the MTEF. Almost 70% of the
Namibian population depend on Agriculture for livelihood, making it a key sector for
investment. The TIPEEG programme will result in 26,171 jobs in this sector; more
details on agriculture are given below.

The sections below highlight some of the specific ways in which the Government will be
spending the budget.
MINISTRY OF
FINANCE

2011/12 Citizens Guide to the National Budget


Education
Education is one of the most important long term investments that the Government can
make. Therefore the Government continues to devote the largest share of the budget to
this sector.

 At Primary level the focus will be on providing the schools with essential educational
resources and training teachers on how to utilise these resources effectively.

 The Government has set itself a target to significantly increase the number of
disadvantaged children who enter primary school having completed one year of pre-
primary.

 Funding will be provided for the construction of 15 new schools and 12 new hostel
facilities.

 At primary and secondary school, funding will be provided to meet the goal of having a
textbook for every learner for critical subjects such as English, Mathematics and
Science.

 For vocational education and training the Government aims to increase enrolment from
6,560 in 2009 to 24,944 in 2014. Funding will significantly increase to achieve this
target. Additional resources have also been provided under UNAM (School of Medicine)
and Polytechnic of Namibia (School of Engineering) to complement such enrolment.

 Additional money has also been provided to increase the Namibia Students Financial
Assistance Fund (NSFAF) so that more students can be accommodated on the
scheme. The NSFAF is used to fund disadvantaged students‟ tuition fees and other
related academic costs for higher education.

 Adult Education programme activities involve the provision of opportunities for


approximately 22 000 adult learners to acquire, retain and apply literacy skills in the
world of work.

Agriculture Health
Improving food security is essential to The Government continues to improve
poverty reduction through ensuring that the the health system to ensure that all
nutritional needs of citizens are met. Namibians have access to high quality
Agriculture also holds great potential for medical services.
economic growth and job creation.
 One of the key Government targets
 Additional money has been allocated is to increase the number of health
to improve livestock farming, animal facilities providing Antiretroviral
health, provision of bulk and rural treatment (ART) to 117 by 2014,
water supply and improved crop and to have over 120,000 people
production. Examples of spending receiving ART by 2014 (ART is
areas include provision of training, medication for the treatment of
agronomic irrigation projections to HIV). Additional resources have
diversify production towards food also been provided for the
crops/cash crops, development of prevention of mother to child HIV
marketing and food processing and transmission.
provision of animal vaccines and
veterinary services.  More generally, additional funds
have been allocated for improving
 The recent hike in global food prices health care management,
has emphasised the need to increase acquisition of pharmaceuticals, and
domestic production. The Government for Malaria elimination and TB
has set a target to increase programmes.
horticultural production to 60% of
annual consumption by 2013/14. The  Additional funds have also been
Government aims to achieve this allocated for the treatment of
through the Green scheme, the patients with special or uncommon
construction of storage facilities and diseases.
agriculture technology development
centres, amongst other initiatives.
MINISTRY OF
FINANCE

2011/12 Citizens Guide to the National Budget


Tackling Inequality
Women, children and the elderly are usually the most vulnerable members of
our society. In the face of persistent poverty the Government will allocate
additional funding to maintain and improve the social safety nets. The table
below highlights the areas of increased funding:

Social Grants – Total Spending, N$

2010/11 2011/12
Early Childhood
Development Support 400,000 4,000,000
Subsidies
Grants to Women's
Projects for Capacity 773,000 1,000,000
Building
Maintenance grants,
Foster parent
allowances (Orphans 369,000,000 348,103,000
and Vulnerable
Children)
Allowance for War
400,000 400,000
Orphans
Social Pensions (Old
950,877,000 960,160,000
age and Disability)
Funeral Plan 400,000,000 44,145,000
Namibia Emergency
20,000,000 20,000,000
Disaster Funds
Veterans
221,800,000 1,155,319,000
(Subvention)
Food for Work, Cash
4,400,000 3,000,000
for Work
School Feeding
21,347,000 21,647,000
Programme
Total Social Grants 1,988,997 2,557,774
As percentage of
7.2% 6.8%
total budget

The spending on social grants is estimated to benefit approximately 1.1 million


Namibians, (around half of the population).

Ensuring the Safety of Citizens


The rule of law and security are of vital importance to the wellbeing of citizens and an
important condition for economic growth and development.

 The increased funding to the police will help to increase protection services and
control Namibia’s border, improve traffic conditions and reduce road accidents
and prevent crime from happening in the first place. Spending will include
recruitment and further training of staff, police equipment, increased foot and
vehicle patrols and improved crime intelligence.

 Furthermore, the Government is allocating more funds for training facilities in


prisons to provide prisoners with skills that will help their rehabilitation into society
after completion of their sentence.

MINISTRY OF
FINANCE

2011/12 Citizens Guide to the National Budget

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