Finance Minister Ipumbu Shiimi is expected to deliver the national budget speech on Thursday, but taxpayers and investors could be in for a rude awakening.

The event is slated for 14h30 on Thursday.

Economists are expecting a low-key budget that will do little to stimulate economic growth or put money back into the overstretched pockets of consumers.

This budget, analysts opine, will present a more stringent spending pattern considering the deteriorating fiscal space.

The budget is likely to stick to the line that Shiimi spelled out during his mid-term budget review statement late last year.

“Under the current depressed economic conditions, one would have liked the minister to table an expansionary budget. That is to increase public spending so as to stimulate economic growth,” economic expert Omu Kakujaha-Matundu said when approached for comment.

While no fireworks are expected, higher levies of alcohol, fuel and tobacco products could still burn a hole in people’s pockets.

“I don’t foresee any tax relief for the consumer. Consumers and investors could be in for rude awakening with the introduction of some of the taxes mooted in last year’s speech,” Kakujaha-Matundu adds.

However, the economist said there is no harm in government borrowing funds, if such will be allocated to bankable capital projects with guaranteed returns on investment.

“Borrowing a little bit more, and jacking up expenditure a bit, if and only if it is to increase capital spending, such as starting the Neckartal Dam agricultural projects, for resuscitation of the green schemes is not a bad idea,” he said.

One thing is clear for the analyst: “This is not the time for fiscal consolidation”.

But he was quick to concede that Shiimi is skating on thin ice, with not so many options at his disposal.

“Since he can’t cut defence spending, how can the army be roped in to work on the green schemes and other productive activities?” he questioned.

Another fiscal pundit, Mally Likukela, agreed that the noose of the public purse will continue tightening.

“It will show a continuation of the COVID-19 oriented spending to reinforce the gains made in the fight against the pandemic. Another component that will feature prominently is the social safety net spending to cushion and mitigate the impact on the most vulnerable members of our society,” Likukela said.

Like his counterpart, Likukela would have expected some relief for taxpayers, but conceded it is highly unlikely given the deteriorating budget aggregates.

“The taxpayers are overburdened and a bit of relief would go a long way to assist, but this would be detrimental to the revenue stream coming from the income tax component,” he said.

Another economist, Salomo Hei, was dismayed by persistent budget cuts in the middle of teetering economy.

“We are perhaps the only country in the world that cut our budget during a pandemic and have chosen fiscal consolidation over saving an ailing economy. I would like to see certainty on the agri sector to absorb the high unemployment rate,” Hei said.

He added that the Witvlei abattoir must open and the green schemes must start operating.

“We don’t want lofty promises, we want tangible economic outcomes,” he added.

Source: The Namibian Press Agency