{"id":80047,"date":"2024-11-03T12:21:00","date_gmt":"2024-11-03T12:21:00","guid":{"rendered":"https:\/\/www.africa-press.net\/namibia\/all-news\/n500-million-psemas-allocation-questioned-as-parties-poke-holes-in-shiimis-budget"},"modified":"2024-11-03T12:21:00","modified_gmt":"2024-11-03T12:21:00","slug":"n500-million-psemas-allocation-questioned-as-parties-poke-holes-in-shiimis-budget","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/namibia\/all-news\/n500-million-psemas-allocation-questioned-as-parties-poke-holes-in-shiimis-budget","title":{"rendered":"N$500 million Psemas allocation questioned\u00a0\u2026 as parties poke holes in Shiimi\u2019s budget"},"content":{"rendered":"

Africa-Press – Namibia. <\/strong><\/span> <\/b><\/p>\n

Finance minister Iipumbu Shiimi has been lauded by some for his interventionist budget to shield Namibians from the brunt of drought, but others have received it with mixed emotions.<\/p>\n

For the latter, the budget leaves much to be desired.<\/p>\n

One of them is economist Klaus Schade, who has raised concern regarding the recent N$500 million allocated to the Public Service Employees Medical Aid Scheme (Psemas).<\/p>\n

From his hilltop view, the allocation underscores the urgent need for reform within the scheme.<\/p>\n

Some opposition political parties have also weighed in, bringing their dismay to the fore.<\/p>\n

The allocation was highlighted during Shiimi\u2019s mid-term budget review on Wednesday, when he said a total of N$2.4 billion has been earmarked for subsidies and transfers to government organisations, including coverage of the Psemas shortfall.<\/p>\n

Schade pointed out that \u201cthe additional funding speaks volumes about how much reform is needed\u201d in Psemas, suggesting that the current structure may not be sustainable without significant changes.<\/p>\n

Psemas has been under scrutiny due to its financial sustainability issues, and the need for urgent reform. The economist also criticised the government\u2019s low execution rate of capital projects, which stands at less than 40%. This is particularly troubling, given the critical role of the railway sector in unlocking economic opportunities in emerging fields such as oil and gas, and green hydrogen. Schade said: \u201cWe need to investigate why the implementation of capital projects is limping\u201d, adding that this issue could hinder future economic growth.<\/p>\n

In his budget presentation in February 2024, Shiimi outlined a comprehensive budget of N$100.1 billion, which included N$74.6 billion for operational expenditure, and N$12.8 billion for development projects. However, he acknowledged that due to low execution rates, N$2.1 billion has been identified for reallocation from development to operational budgets. Schade expressed concern over this shift. \u201cThe government has reallocated funds from development to operational budgets, which is worrying, because sufficient infrastructure is essential to attract investment and enhance economic competitiveness.\u201d<\/p>\n

Despite these challenges, there were positive notes in Shiimi\u2019s budget review, particularly regarding expected reductions in public debt over the medium-term expenditure framework (MTEF). Another economist, David Jarrett, likewise commented on the mid-term budget review\u2019s lack of clarity regarding the government\u2019s financial challenges, as the fiscal year progresses. He emphasised that while the review meets expectations, it remains unclear how the government will effectively support domestic production, amid a high reliance on imports.<\/p>\n

\u201cThe real benefit would have occurred if specific local actions were targeted,\u201d he noted, suggesting that initiatives like electric mobility or horticulture could help reduce import dependency. Jarrett also highlighted that while increased tax amnesty might yield short-term benefits due to improved efficiency from the Namibia Revenue Agency (NamRA), this advantage is likely to diminish as compliance levels rise.<\/p>\n

Political lens<\/p>\n

Reacting to the mid-term budget, Landless People\u2019s Movement (LPM) chief whip Utaara Mootu credited the finance minister for availing additional funding towards the construction of classrooms, but emphasised a need for an education curriculum revamp.<\/p>\n

\u201cThe budget\u2019s allocation to construct 512 classrooms is commendable, yet it barely scratches the surface of what is needed. The issue here is not just the construction of classrooms, but also the transformation of an education system which fails to prepare our young people for a competitive, modern economy,\u201d she said.<\/p>\n

Mootu maintained that Namibia needs not just physical infrastructure, but digital access, updated curricula, and above all, hope for a future where education leads to real opportunities. What is also concerning for her is that 80% of children aged 0\u20135 years do not have access to early childhood development (ECD), according to both the 2011 and 2023 Namibia population and housing census reports. Out of this, 5% is due to distance, and 10.3% is due to financial constraints. \u201cThere needs to be an urgent intervention for children living with disabilities; they have systematically been excluded from the education system, which is a human right,\u201d the youthful lawmaker continued.<\/p>\n

She advised the government to emulate the Zimbabwean education system and learn from its success, where the curriculum targets a more skills-based approach to foster industrialisation. Motuu also touched on the agricultural sector. \u201cHow can we talk about food security when our farmers struggle to make ends meet? There needs to be an accumulation-from-below approach, targeting small-scall farmers. Namibia\u2019s agriculture requires radical reform and support \u2014 not just drought relief, but a proactive vision for long-term resilience,\u201d she noted.<\/p>\n

Priorities<\/p>\n

Echoing similar sentiments was the Popular Democratic Movement\u2019s Inna Hengari. She praised government for prioritising housing and education in the mid-year budget, but said more needs to be done to address the countrywide housing crisis.<\/p>\n

\u201cThe housing crisis in our urban areas is equally dire, and demands immediate attention. The current situation, where hardworking Namibians struggle to find affordable housing, is unacceptable and unsustainable. We must prioritise the development of affordable housing solutions in our urban areas,\u201d she stated.<\/p>\n

She further said: \u201cI commend the minister\u2019s commitment to addressing our economic policy priorities, particularly through the introduction of tax relief measures, the tax amnesty programme, and initiatives in housing and education. These are indeed constructive steps. However, to achieve meaningful economic transformation, it is essential that we adopt a more ambitious pace, and deepen the scope of these reforms.\u201d Hengari said the provision of affordable housing requires bold action, including substantial resources allocation and targeted support for low-income households.<\/p>\n

\u201cWe need a comprehensive, long-term strategy that includes urban planning reforms, zoning changes to promote higher density development, and innovative financing mechanisms to make homeownership accessible to all,\u201d she added.<\/p>\n

The parliamentarian also welcomed the allocation of N$139.0 million to the Conditional Basic Income Grant to additional qualifying beneficiaries in urban localities, stating that it is a positive move towards addressing urban poverty.<\/p>\n

\u201cHowever, we must ensure that this programme is sustainable and effectively targeted, and that intended beneficiaries actually receive the grant,\u201d she cautioned.<\/p>\n

For More News And Analysis About Namibia<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Namibia. Finance minister Iipumbu Shiimi has been lauded by some for his interventionist budget to shield Namibians from the brunt of drought, but others have received it with mixed emotions. For the latter, the budget leaves much to be desired. One of them is economist Klaus Schade, who has raised concern regarding the […]<\/p>\n","protected":false},"author":84,"featured_media":80046,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[234,236,233],"class_list":["post-80047","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-namibia","tag-namibia"],"yoast_head":"\nN$500 million Psemas allocation questioned\u00a0\u2026 as parties poke holes in Shiimi\u2019s budget - Namibia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/namibia\/all-news\/n500-million-psemas-allocation-questioned-as-parties-poke-holes-in-shiimis-budget\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"N$500 million Psemas allocation questioned\u00a0\u2026 as parties poke holes in Shiimi\u2019s budget\" \/>\n<meta property=\"og:description\" content=\"Africa-Press – Namibia. Finance minister Iipumbu Shiimi has been lauded by some for his interventionist budget to shield Namibians from the brunt of drought, but others have received it with mixed emotions. For the latter, the budget leaves much to be desired. 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