Download YOUR Money, YOUR Budget.

YOUR Money,
YOUR Budget.
MINISTRY
OF
FINANCE
________
NAMIBIA
2011/12 Citizens Guide to the National
Budget
NEW …
The Budget shows
how the Namibian
Government is
going to spend the
money you
contributed in
taxes. It is
important that you
know where this
money is being
spent and this
guide to the budget
highlights some of
the key spending
areas.
For more detailed
information about
the budget please
visit:
http://www.mof.gov.
na/budget.htm
What is the Budget?
The national budget primarily reveals how the government will raise money and how
this money will be spent.
Government can collect money through a variety of ways, such as income tax, mining
tax, Value Added Tax (VAT), grants or trade taxes (for example, taxes on certain goods
imported into Namibia). The budget outlines how much money will be collected from
each source.
The budget then explains how the Government will spend this money towards meeting
the national development objectives, from nurses to social grants to roads and schools.
Given that funds are limited, the Government has to make hard choices on what is not
only best for today’s generation, but also what is best for future generations.
The budget is prepared by Namibia’s Treasury, which falls under the Ministry of
Finance and is in charge of controlling the money that Government collects from taxes,
fines and other sources. However, all Government institutions are responsible for
delivering on the Government’s commitments in the budget.
Budget Cycle
The Budget is split into 4 key stages as shown in the diagram below. This cycle is
repeated every year.
At
the
planning
stage,
the
Government estimates the overall
amount of money available and
discusses with all government
institutions (for instance education,
health, police) how much money they
would need and how much money is
available.
Once the Cabinet has approved the
budget, the Minister of Finance
presents it in the National Assembly,
followed by debate at the National
Council as well as committee level.
Following approval, the budget is
formally implemented so that plans
can be carried out.
The final stage is the monitoring and auditing of the budget, to assess progress against
the targets outlined in the budget.
l
TAX CHANGES...
Income tax was
lowered as part of
the 2010/11 budget
and the lower levels
have been
maintained as part of
the 2011/12 budget.
Increases in Excise
Duties (as per SACU
agreement):
- Unfortified wine
8.4%
- Fortified wine 7.4%
- Sparkling wine
4.5%
- Ciders and
alcoholic fruit
beverages 7.5%
- Spirits 10.0%
- Cigarettes 8.9%
- Cigarette tobacco
8.2%
- Pipe tobacco
10.4%
- Cigars 6.0%
How is the Budget Funded?
Government revenue in 2011/12 is estimated to be
N$28.0 billion, an increase of N$5.3 billion from
2010/11. This increase is mainly due to a large
increase in Namibia’s share of taxes on goods
imported by the Southern African Customs Union
members (the SACU Common Revenue Pool).
Revenue from other tax sources is also likely to
increase as the economy continues to recover from
the downturn in 2009 (for example, tax collected
from individuals and company profits has increased
as the economy recovers).
In this year’s budget, spending is N$9.7 billion
higher than revenue (meaning a deficit of 9.8% of
GDP). Therefore the Government has to borrow
money through the issuance of Treasury Bills and
Bonds (that people, banks and other companies can
buy and earn interest from) in order to cover its
spending. However, Government debt will be kept
within a manageable level and the increased
spending will help the economy in both the short and
long term.
Size of the Budget
The total size of the budget
spending in 2011/12 is N$37.7
billion, a significant increase from
the N$27.7 billion spent in
2010/11.
This year’s budget follows on
from
the
large
spending
programmes of the last 2 years.
The high level of spending in the
last 2 years helped to shield the
economy from the negative
effects of the global economic
downturn.
This year, the budget has been
expanded yet again to ensure the
economic recovery continues and
to create jobs and improve
welfare conditions in Namibia.
This Month’s Q&A Tech
Focus of the Budget
The focus of the budget will be on the key challenges facing Namibia; the high
unemployment rate, poverty, inequality, labour skills shortages and a narrow industrial
base.
Starting this year the Government will implement a Targeted Intervention Programme
for Employment and Economic Growth (or ‘TIPEEG’). This programme is specifically
aimed at addressing unemployment by focusing on four key sectors, namely,
agriculture, tourism, transport and housing and sanitation. It is envisaged that
successful implementation of TIPEG will result into the preservation and creation of
about 104,000 direct and indirect job opportunities.
In transport for example, money will be spent on road construction and upgrading, rail
network development and management of road safety. A total of 33,000 direct and
indirect jobs are estimate to be created. Housing and Sanitation projects will focus
mainly on construction of low cost houses and urban/rural sanitation,
preserving/creating approximately 35,000 jobs. Tourism is a rapidly growing sector and
a significant generator of employment potential. The TIPEEG programme covers two
main programmes in this sector, tourism development and wildlife management. The
programmes will result in 10,000 job opportunities over the MTEF. Almost 70% of the
Namibian population depend on Agriculture for livelihood, making it a key sector for
investment. The TIPEEG programme will result in 26,171 jobs in this sector; more
details on agriculture are given below.
The sections below highlight some of the specific ways in which the Government will be
spending the budget.
MINISTRY OF
FINANCE
2011/12 Citizens Guide to the National Budget
Education
Education is one of the most important long term investments that the Government can
make. Therefore the Government continues to devote the largest share of the budget to
this sector.
 At Primary level the focus will be on providing the schools with essential educational
resources and training teachers on how to utilise these resources effectively.
 The Government has set itself a target to significantly increase the number of
disadvantaged children who enter primary school having completed one year of preprimary.
 Funding will be provided for the construction of 15 new schools and 12 new hostel
facilities.
 At primary and secondary school, funding will be provided to meet the goal of having a
textbook for every learner for critical subjects such as English, Mathematics and
Science.
 For vocational education and training the Government aims to increase enrolment from
6,560 in 2009 to 24,944 in 2014. Funding will significantly increase to achieve this
target. Additional resources have also been provided under UNAM (School of Medicine)
and Polytechnic of Namibia (School of Engineering) to complement such enrolment.
 Additional money has also been provided to increase the Namibia Students Financial
Assistance Fund (NSFAF) so that more students can be accommodated on the
scheme. The NSFAF is used to fund disadvantaged students‟ tuition fees and other
related academic costs for higher education.
 Adult Education programme activities involve the provision of opportunities for
approximately 22 000 adult learners to acquire, retain and apply literacy skills in the
world of work.
Agriculture
Health
Improving food security is essential to
poverty reduction through ensuring that the
nutritional needs of citizens are met.
Agriculture also holds great potential for
economic growth and job creation.
The Government continues to improve
the health system to ensure that all
Namibians have access to high quality
medical services.
 Additional money has been allocated
to improve livestock farming, animal
health, provision of bulk and rural
water supply and improved crop
production.
Examples of spending
areas include provision of training,
agronomic irrigation projections to
diversify production towards food
crops/cash crops, development of
marketing and food processing and
provision of animal vaccines and
veterinary services.
 The recent hike in global food prices
has emphasised the need to increase
domestic production. The Government
has set a target to increase
horticultural production to 60% of
annual consumption by 2013/14. The
Government aims to achieve this
through the Green scheme, the
construction of storage facilities and
agriculture technology development
centres, amongst other initiatives.
 One of the key Government targets
is to increase the number of health
facilities providing Antiretroviral
treatment (ART) to 117 by 2014,
and to have over 120,000 people
receiving ART by 2014 (ART is
medication for the treatment of
HIV). Additional resources have
also been provided for the
prevention of mother to child HIV
transmission.
 More generally, additional funds
have been allocated for improving
health
care
management,
acquisition of pharmaceuticals, and
for Malaria elimination and TB
programmes.
 Additional funds have also been
allocated for the treatment of
patients with special or uncommon
diseases.
MINISTRY OF
FINANCE
2011/12 Citizens Guide to the National Budget
Tackling Inequality
Women, children and the elderly are usually the most vulnerable members of
our society. In the face of persistent poverty the Government will allocate
additional funding to maintain and improve the social safety nets. The table
below highlights the areas of increased funding:
Social Grants – Total Spending, N$
Early Childhood
Development Support
Subsidies
Grants to Women's
Projects for Capacity
Building
Maintenance grants,
Foster parent
allowances (Orphans
and Vulnerable
Children)
Allowance for War
Orphans
Social Pensions (Old
age and Disability)
Funeral Plan
Namibia Emergency
Disaster Funds
Veterans
(Subvention)
Food for Work, Cash
for Work
School Feeding
Programme
Total Social Grants
As percentage of
total budget
2010/11
2011/12
400,000
4,000,000
773,000
1,000,000
369,000,000 348,103,000
400,000
400,000
950,877,000 960,160,000
400,000,000 44,145,000
20,000,000
20,000,000
221,800,000 1,155,319,000
4,400,000
3,000,000
21,347,000
21,647,000
1,988,997
2,557,774
7.2%
6.8%
The spending on social grants is estimated to benefit approximately 1.1 million
Namibians, (around half of the population).
Ensuring the Safety of Citizens
The rule of law and security are of vital importance to the wellbeing of citizens and an
important condition for economic growth and development.
 The increased funding to the police will help to increase protection services and
control Namibia’s border, improve traffic conditions and reduce road accidents
and prevent crime from happening in the first place. Spending will include
recruitment and further training of staff, police equipment, increased foot and
vehicle patrols and improved crime intelligence.
 Furthermore, the Government is allocating more funds for training facilities in
prisons to provide prisoners with skills that will help their rehabilitation into society
after completion of their sentence.
MINISTRY OF
FINANCE
2011/12 Citizens Guide to the National Budget