Debt servicing costs continue to trend above a desired benchmark of 10 per cent of revenues, which adds further impetus to the call to stabilise the pace of debt accumulation.

Minister of Finance, Iipumbu Shiimi, said this when he delivered the Financial Year 2023/24 Mid Year Budget Review in the National Assembly on Tuesday.

Shiimi said overall, the budget deficit is projected to decline to about 5.3 per cent of Gross Domestic Product in 2022/23 compared to 5.6 per cent estimated in the main budget in February 2022.

“In our estimates, we aim to realise a positive primary budget balance in the coming financial year 2022/23 and maintain it over the medium term, thereby setting the public debt metrics on a downward trajectory,” he said.

According to Shiimi the public debt stock is expected to increase to N.dollars 138.4 billion, equivalent to 69.6 per cent of GDP in 2022/23.

He said over the Mid Term Expenditure Framework (MTEF), the pace of debt accumulation is projected to peak in the next financial year, resulting in a stabilisation of the debt ratios over the remainder of the MTEF as nominal GDP growth outpace debt growth.

“The high public debt levels continue to be central in the fiscal policy considerations over the medium term. As affirmed in the previous budget, government maintains the commitment to redirect much of the revenue increases in the coming years as the economy recovers towards debt redemption and reducing the borrowing requirements as much as possible,” he stated.

Shiimi added that as such, government will focus on maintaining a positive primary budget balance over the medium term.

At the same time government, he added, will continue working in close collaboration with the private sector to diversify the economy and create new engines of growth.

Source: The Namibian Press Agency