Economic slump would be short-lived – Shiimi

Oshakati-Namibia's current economic slump will possibly be short-lived, with revenue in the country and SACU projected to increase in 2017/18, Governor of the Bank of Namibia, Ipumbu Shiimi, has said.

Responding to questions at a business breakfast organised by Oshakati Town Council at the town on Friday, Shiimi said revenue prospects already look better in 2017/18 compared to 2016/17.

Businesspeople are keen to know how long the current financial crisis that has seen government scaling down on some of its activities, such as, cutting down on its budget in the education, health, housing and other infrastructure budgets, among others, would last.

Due to a negative growth rate experienced last year, government had to cut its expenditure twice.

The budget cut saw the freezing of tenders, reduction in overtime claims, freezing of vacancies while some businesses in the construction sector still sit with unpaid invoices dating back to early last year.

Shiimi said government would need to balance its books and "come from a high level to a sustainable level", which will benefit the current generation and future generations. Although things are starting to look better, government will not be seeing the same revenue growths recorded in the last few years.

Significant revenue growth is only likely to be noticeable in the next two years should no further economic crisis strike, Shiimi said.

He said government used to spend about 40 percent of the gross domestic product in the form of government expenditure, which was abnormal, hence the need to adjust spending to 32 percent, as was the case in previous years. "We need to make sure the foundation is stronger and continue to invest in education and health because we need a productive labour force, we need businesspeople with skills and infrastructure," said Shiimi. Shiimi further said the country should vigorously also look at further investing in agriculture to enable the country to produce more food and cut dependency on imports.

"We need to produce more food," he said, adding that Namibia is one of those countries that import most of their food requirements. Most countries, however, produce what they eat, he said.

"We need to at least produce the basic commodities the rest we can import," said Shiimi.

In addition, Shiimi also asked the businesspeople to join the fight against corruption and honour their taxes obligations to help the government stabilise the economy.

Source: New Era Newspaper Namibia