Namibia to address Fitch Ratings concerns

Namibia says it will work faster on the recommendations made by Fitch Rating agency when it downgraded its economic outlook from stable to negative last Friday.

Finance minister Calle Schlettwein told a media briefing Tuesday in Windhoek that in fact the assessment and ratings were based on the information supplied by the government.

"The risk factors emphasized in the ratings report are known to government and the current medium term expenditure framework provides a basis for containing these risks," Schlettwein said.

The minister also said the government was ready to take the necessary steps at a faster pace than contemplated in the medium-term expenditure framework budgetary framework.

According to Schlettwein, the medium-term expenditure framework he presented in February as part of the national budget provides a basis for pro-growth fiscal consolidation.

Phased spending cuts, he further said, have already started while other non-core spending has been lowered or postponed in many cases.

"Going forward, the government will reinforce its time-tested approach to responsible public finance management, pro-growth fiscal sustainability and macroeconomic stability in the upcoming mid-year budgetary review," he said.

Schlettwein added there would be expenditure realignment to ensure that public finance put on a sustainable trajectory without significantly jeopardizing the economic growth.

"Analysis of the 2016/17 budget and medium-term economic framework is currently underway with specific proposals on spending cuts including the freezing and suspension of funds for new recruitment in the civil service," the minister explained.

In addition, Schlettwein said the government was developing proposals to better leverage state assets through public-private partnerships and equity participation.

On the proposed law, Schlettwein said the government was looking into it.

Fitch has based its downgrade on budget deficit; declining Southern African Customs Union revenue; government failing to meet its revenue targets and the proposed New Equitable Economic Empower Framework law.

According to Fitch, the proposed law that would require companies to make available 25 percent shareholding to the previously disadvantaged people has caused so much fear within the business sector.

Even some economic experts said the proposed law is scaring away potential foreign investors. Endit