Participating in a public dialogue session of the Friedrich Ebert Foundation and the Agricultural Trade Forum yesterday, Finance Permanent Secretary Calle Schlettwein said nearly N$9 billion less is expected to flow into the Sacu pool than last year because of the worldwide financial crisis.
This means smaller revenue shares for South Africa, Botswana, Lesotho, Swaziland and Namibia with the latter losing about N$1,3 billion.
Finance Minister Saara Kuugongelwa-Amadhila planned for N$8,6 billion from Sacu revenue in her 2009-10 budget, about 40 per cent of Governments total income of N$21,8 billion for this financial year. The Sacu windfall will now shrink to approximately N$7,3 billion, which means it can only fill 34 per cent of State coffers.
The shortfall will drive Namibias estimated deficit for the year up to about N$4,9 billion, which represents seven per cent of gross domestic product (GDP). The bigger deficit will also chase up the countrys total debt to N$16,4 billion, or 23,5 per cent of GDP.
Sacu Executive Secretary Tswelopele Moremi earlier this year admitted that the Sacu pool was in the red due to the global economic crisis.
In June, the issue surfaced in Parliament, with Deputy Finance Minister Tjekero Tweya saying that Namibia was looking at new taxes to compensate for the expected drop in Sacu revenue.
Tweya said Government was considering a number of ways to reduce Namibias reliance on Sacu income, including broadening the domestic revenue base through strengthen tax collection and exploring new sources of taxes. The Deputy Minister wouldnt elaborate on the size of the deficit at that stage, saying member states still had to agree on ways to finance it.
The Namibian Economic Policy Research Unit (Nepru) recently said the Sacu deficit is the first ever for the customs union, the oldest in the world, and is proof of just how severe the prevailing global economic crisis is.
Minister Kuugongelwa-Amadhila also budgeted for royalties of N$125,2 million from Namdeb this year. Namdeb has meanwhile asked Government to temporarily waive the royalty payment, as the company has been hit particularly hard by the global recession.
Approached for an update of their request, De Beers Country Manager Daniel Kali said the company prefers not to comment at this stage.
The Namibian
Post published in: Economy