Namibians have reacted positively to Finance Minister Gert Hanekom's 1994/95 budget, first presented in Parliament on 17 March. The financial year began on 1 April.
Acknowledging that last year's stringent budget was decidedly "unpopular", Hanekom expressed the hope that this year's budget (an election year) will prove to be "less unpopular".
The 1994/95 budget continues the tradition, since independence in 1990, of producing well-crafted blueprints which embody prudent fiscal discipline.
This year's projected deficit is roughly US$120m, slightly less than in 1993/94, and the government is hoping that this year's budget will institute a trend of reducing expenditure as a percentage of GDP.
The four underlying, guiding principles of this year's plan are these:
* to ensure continued sound financial management by the government;
* to maintain strong balance-of-payments and foreign-reserves positions;
* to shift gradually towards a growth-oriented focus, which provides an attractive climate for business activity and investment; and
* to redress long-standing social imbalances, with a special emphasis on human resources development.
Tax relief for poorest
The budget package includes new tax relief for low- and middle-income earners. Those earning less than 10,000 Namibian dollars per year are exempt from taxes. It also includes incentives for the private sector, particularly for firms in the export-oriented manufacturing sector. As in past budgets, education and health services take up the lion's share of expenditure (29% and 17% of the total budget, respectively).
Hanekom also had high praise for the stability of the new Namibian dollar, which was introduced last September. Although the "Namdol" remains pegged, at par, to the South African rand, Hanekom frankly admitted that the present South African political/economic stability is balanced "on a knife's...