Kuugongelwa-Amadhila defends support to SOEs

WINDHOEK: Finance Minister Saara Kuugongelwa-Amadhila says financial support to Air Namibia is earmarked for transport equipment and maintenance to ensure supply of services to one of the strategic industries in the economy.

Kuugongelwa-Amadhila said this in response to matters raised during the discussions of the 2014/15 Appropriation Bill and the 2014/15 to 2016/17 Medium-Term Expenditure Framework (MTEF) in the National Assembly on Tuesday.

According to the Estimates of Revenue, Income and Expenditure document, a total of N.dollars 1,8 billion was allocated to the airline during this MTEF period for the updating of its business plan and payment of outstanding debt.

Kuugongelwa-Amadhila explained that the N.dollars 9,5 billion transferred to State-Owned Enterprises (SOEs) during the 2014/15 financial year includes funding for infrastructure development such as the upgrading of harbour and airport infrastructure, development of the Kudu Gas-to-Power project, and rail transport equipment.

A total of N.dollars 24,8 billion has been allocated to SOEs during the MTEF period.

“I should emphasise that the transfers for infrastructure development form part of the strategic capital investment required to establish a basis for long-term sustainable growth of the economy and should not be seen as a bail-out of the SOEs,” she said.

The Finance Minister further stressed that the transfer to institutions of higher education, the Veterans’ Fund, financial assistance to students and youth empowerment are standing commitments which form part of the expenditure of the respective budget votes.

A total of N.dollars 489 million was allocated to the Polytechnic of Namibia, N.dollars 870 million to the University of Namibia, N.dollars 116 million to the Namibian College of Open Learning (Namcol), N.dollars 469 million to the Namibia Training Authority (NTA), and N.dollars 19,7 million was allocated to the Namibia Qualifications Authority (NQA) during the 2014/15 financial year.

An amount of N.dollars 836.1 million was allocated to the Namibian Students’ Financial Assistance Fund (NSFAF) for the provision of loans and other financial assistance to students, while N.dollars 1,4 billion was allocated to the Veterans’ Subversion Fund for funding veterans’ projects, subversion, medical assistance and counselling during the 2014/15 financial year.

The minister said the transfers to development financial institutions over the MTEF, such as N.dollars 414 million to the Development Bank of Namibia (DBN); N.dollars 630 million to the Small and Medium Enterprises (SME) Bank; and N.dollars 440 million to the National Housing Enterprise (NHE) are necessary to support productive economic activities, including industrial development, SME support and financing for housing.

“The transfer for infrastructure development supplements other forms of support to be provided in the form of guarantees for loans to be raised by SOEs themselves, and as a co-financing to catalyse funding from other sources. Such is the case with the allocation to Namport, NamPower and the NHE,” the minister said.

She stressed that the allocation of N.dollars 625 million to the Namibian Port Authority (Namport) over the MTEF will assist the authority in raising N.dollars 2,3 billion for port expansion projects.

Similarly, an amount of N.dollars 1,6 billion to NamPower over the current MTEF period will assist the power utility in raising N.dollars 6 billion in the next five years for investment in the Kudu Gas-to-Power project.

Kuugongelwa-Amadhila said the continued dependence of some SOEs on Government for operational support remains a concern, as are the delays in the finalisation of financial statements and continued instances of qualified and disclaimed audit opinions.

She said Government expects improved performances from all SOEs as required under the SOE Governance Act.

SOURCE: NAMPA