27/03/2025
Shafudah tables N$106.3 billion budget amidst revenue slowdown
Business Reporter
NAMIBIA’S new Minister of Finance, Ericah Shafudah, today tabled a budget of N$106.3 billion, amidst what she termed a challenging financial environment.
Shafudah explained that Namibia, from a revenue perspective, has experienced notable headwinds which, in turn, have significantly constrained the available resource envelope during FY2025/26.
“In this regard, we estimate total revenues of N$92.6 billion for FY2025/26, a moderate increase of only 1.9% from the revised estimates of the previous year. The substantial strain on revenues emanated from a N$6.9 billion reduction in SACU receipts, which is confirmed at N$21.1 billion. Similarly, activities in the diamond sector remain subdued, resulting in muted contributions to the fiscus,” Shafudah said.
Nevertheless, she added that the finance ministry estimates improved performance on several domestic revenue streams as VAT is estimated to increase by N$2.6 billion compared to the revised estimates for FY2024/25, while income tax on individuals is estimated to increase by N$1.8 billion, and non-mining company taxes are estimated to increase by N$1.3 billion over the same period.
“The relatively poorer revenue outlook for FY2025/26, as I have outlined prior, posed challenges in the resource allocation exercise, redirecting us to employ a more rigorous approach in determining key and most impactful priorities to accelerate service delivery, address the most pressing needs, and improve infrastructure development. In this context, I am tabling before this August House a budget of N$106.3 billion for FY2025/26. This total expenditure consists of N$79.8 billion operational expenditure, N$12.8 billion in development expenditure, including N$3.2 billion in development projects funded through external loans and grants, as well as N$13.7 billion in interest payments. This budget represents an increase of 4.9% from the revised estimates of the preceding financial year,” Shafudah said.
She added that the operational budget is estimated at N$79.8 billion, growing by 2.3% over the FY2024/25 mid-term estimates. Meanwhile, to continue addressing infrastructure bottlenecks that weigh against our growth potential, the development budget has increased by 22.6% to N$12.8 billion from the revised estimates for FY2024/25. This is inclusive of N$3.2 billion in projects financed outside the State Revenue Fund. As a ratio of GDP, the development budget is equivalent to 4.6%, an improvement from 4.2% in the prior year.
Shafudah added that the budget prioritised allocations to promote economic development, protect social spending, and promote domestic food production.
The budget saw no increments in any social grants; however, it saw an increase in some tax categories, such as sin tax. Shafudah, however, added that the budget has made provisions to support and facilitate economic development through continued investments in infrastructure, such as housing and informal settlements upgrading, education, water, power generation, and health facilities, amongst others, to unlock economic opportunities and ensure the delivery of social services across the country.
She added that despite the revenue shocks, the government has sustained allocations to the various social protection programmes in consideration of the need to continue safeguarding livelihoods, support the most vulnerable sectors of our society, empower the youth, and protect gains in social metrics.
“We have also made specific provisions to address youth empowerment programmes and capacity enhancement activities; and the budget made allocations to various initiatives to promote food production and stimulate agricultural activities, given the elevated incidences of drought and the need to improve food security at a national level,” Shafudah said.
The ministries which received the highest amounts include, among others, Education, Innovation, Arts and Culture, which received a total of N$24.8 billion, followed by the Ministry of Finance, which has been allocated a budget of N$14.6 billion in FY2025/26, including N$7.2 billion for the various social grants. A total of N$100.0 million has been budgeted for the Meat Corporation of Namibia (MeatCo). Meanwhile, N$320 million has been provided for TransNamib in line with the ongoing exercise to improve efficiencies and stem infrastructure and operational challenges.
The Vote of Health and Social Services will receive N$12.3 billion. Within that allocation, the finance ministry has availed N$780 million in FY2025/26 and N$2.7 billion over the MTEF in the development budget to expand the network of health infrastructures countrywide. The end goal, Shafudah said, is to reduce congestion at state hospitals and improve the quality of services broadly. Accordingly, consideration has also been made for additional personnel in the health sector as well as pharmaceuticals and clinical supplies.
Caption: The Table shows allocation to different ministries across the board.