Namibia reduces 2016 budget with 320 mln USD

Namibia has had to reduce its 2016/17 budget with about 5 billion Namibian dollars, or 320 million U.S dollars, from the previous financial year's as the country takes measures to contain expenditure amid growing national debt.

In 2015/16, Namibia's budget was 4.5 billion dollars, but presenting the budget in Windhoek on Thursday, finance minister Calle Schlettwein reduced this year's to 4.2 billion dollars.

Schlettwein said the objective of the budget is to re-establish a sustainable path for public finance to maintain macroeconomic stability as a basic enabler for future sustainability and socio-economic development.

The minister noted that the country's national debt now stands at 3.8 billion dollars, up from 2.3 billion dollars in 2014/15.

He also said that the national debt is estimated to be 4.1 billion dollars by 2016/17 financial year.

In 2014/15, Namibia paid 160 million dollars in interest on national debt and 199 million dollars for 2015/16, and is expected to pay 308 million dollars in the next financial year.

To deal with this, Schlettwein said the ballooning civil servants wage bill should not get in the way of other projects funding.

"Public sector salary increases should be limited to not more than the annual inflation rate over the next three years," he said.

In addition, Schlettwein said non-productive investments such as the construction of government offices will have to be postponed, while cuts will be effected on non-essential operational expenditure, such as travel and subsistence allowances and vehicles.

Schlettwein said while the global economic growth for 2015 was estimated at 3.1 percent, Namibia's economy stands at about 4.5 percent. Enditem