Standard Bank Budget Presentation Vetumbuavi Mungunda Naufiku - PowerPoint PPT Presentation

Standard Bank Budget Presentation Vetumbuavi Mungunda Naufiku Hamunime March 2017

Construction Slowdown Reduced Government Spending

MACROECONOMIC OVERVIEW

ECONOMIC GROWTH GDP by sector at Current Prices (N$ millions) Real GDP Growth (%) Health Education 7.00 Public Administration & Defence 6.4 Real Estate & Business Services 6.00 6 5.7 Financial Intermediation 5.3 5.1 5.1 5.00 Transport & Communication Hotel & Restaurants 4.00 Wholesale & Retail Trade 3.00 Construction 2.60 2.5 Electricity & Water 2.00 Manufacturing 1.00 1 Mining & Quarrying 0.3 Fishing & Fish Processing 0.00 Agriculture & Forestry 0 5000 10000 15000 20000 2014 2015 2016

ECONOMIC GROWTH VS. PEERS Regional GDP Growth (%) GDP per capita 2015 (USD) 7000 6360 12 5724 6000 10 4674 5000 4000 8 3000 6 2000 1377 4 1000 2 0 Kenya Botswana South Namibia Africa 0 2009 2010 2011 2012 2013 2014 2015 2016 -2 Nominal GDP 2015 (USD bn) -4 350 315 300 -6 250 -8 200 -10 Namibia Bostwana Kenya South Africa 150 100 63 50 14 11 0 Kenya Botswana South Namibia Africa

ECONOMIC GROWTH VS. PEERS Real GDP by sector 2015 (%) Public Administration and Defence Financial Intermediation & Real Estate Transport & Communication Wholesale & Retail Trade, Catering & Accomodation Construction Electricity & Water Manufacturing Mining & Quarrying Agriculture, Forestry & Fishing 0 5 10 15 20 25 30 35 Namibia South Africa Botswana Kenya

ECONOMIC GROWTH VS. PEERS Regional Debt to GDP (%) Foreign Reserves (NAD million) 30000 60 25000 20000 50 15000 10000 40 5000 0 2010 2011 2012 2013 2014 2015 2016 30 Total Government Debt (NAD million) 20 70,000 10 60,000 50,000 0 40,000 2012 2013 2014 2015 2016 30,000 Namibia Bostwana Kenya South Africa 20,000 10,000 0 2012 2013 2014 2015 2016 Net Debt

GOVERNMENT FINANCES

FISCAL OVERVIEW: REVENUE Revenue (NAD million) Main Revenue Categories (NAD bn) Income Tax on Individuals 60000 50000 Company Taxes 40000 30000 Domestic Taxes on Goods & Services 20000 10000 SACU Receipts 0 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 0 5 10 15 20 Composition of Government Revenue (2015/16) 2012/13 2013/14 2014/15 2015/16 2016/17 Non-Tax Year-on-Year Change (%) Revenue 35 6% Income Tax 30 On Individuals 25 21% 20 SACU 15 Company Tax Receipts 10 15% 33% 5 Domestic Taxes on 0 Goods & 2012 2013 2014 2015 2016 2017 -5 Services Total Tax Revenue 23%

FISCAL OVERVIEW: REVENUE VS. PEERS Revenue as % of GDP 45 40 35 30 25 20 15 10 5 0 Namibia Botswana South Africa Kenya 2013 2014 2015 2016 Composition of Revenue (2015/16) Other Non-Tax Other 1% Revenue Taxes Namibia Botswana (incl. 1% Non-Tax Mineral Revenue Income Royalties) (incl. Income Taxes 6% Mineral Taxes 27% SACU Royalties) 37% Receipts 32% 33% Total Revenue & Total Revenue & Domestic Grants Grants Domestic Taxes on Taxes on SACU Goods & N$52.22 Bn N$64.79 Bn Goods & Receipts Services Services 30% 23% 10%

FISCAL OVERVIEW: EXPENDITURE Expenditure (NAD millions) 70000 Revenue & Expenditure Year-on-Year Change (%) 60000 50000 30 40000 25 30000 20 20000 15 10000 10 0 5 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 0 2013/14 2014/15 2015/16 2016/17 2017/18 Composition of Government Expenditure (2016/17) -5 -10 Capital Acquisition Transfers of Capital -15 2% Assets 10% -20 Personnel Expenditure Subsidies & 43% Other Government Revenue Government Expenditure Current Transfers 30% Goods & Other Services 15%

FISCAL OVERVIEW: EXPENDITURE Expenditure as % of GDP 50 40 30 20 10 0 Namibia Botswana South Africa Kenya 2013 2014 2015 2016 Total Expenditure (NAD bn) 80 70 60 50 40 30 20 10 0 2013 2014 2015 2016 Namibia Bostwana

FISCAL OVERVIEW: BUDGET ALLOCATIONS Main Ministerial Allocations (% of Expenditure) % Botswana 35 Poverty Eradication & Social Welfare 30 25 Higher Education 20 15 10 Transport 5 0 Agriculture, Water & Forestry Defence Education Health 2015 2016 Urban & Regional Development % Health and Social Services Kenya 20 Education 15 Finance 10 5 Defence 0 Safety & Security Defence Education Health 2013 2014 0 5 10 15 20 25 2014/15 2015/16 2016/17

FISCAL OVERVIEW: WAGE BILL Personnel Expenditure (NAD bn) 20 20.5 21 21.5 22 22.5 23 23.5 24 24.5 25 2014/15 2015/16 2016/17 Public Servants (2015/16) Namibia 40000 35000 30000 25000 20000 15000 Botswana 10000 5000 0 Defence Education Health & Agriculture, Works Force, Police & Social Water & Correctional Services Forestry Services

OPERATIONAL VS. DEVELOPMENT BUDGET Operational & Development Expenditure (NAD million) 60000 50000 40000 30000 20000 10000 0 2012/13 2013/14 2014/15 2015/16 2016/17 Operational Development 2016/17 Mid-Year Suspensions to the Operational Budget 2016/17 Mid-Year Suspensions to the Development (NAD million) Budget (NAD million) 2500 2500 2000 2000 1500 1500 1000 1000 500 500 0 0 Goods & Other Acquisition of Capital Transfers Personnel Goods & Other Subsidies & Acquisition of Statutory Services Capital Assets Expenditure Services Transfers Capital Assets Expenditure Total Operational Budget cut by N$2.82 Billion Total Development Budget was cut by N$2.7 Billion

Necessary Pains for A Secure Future

2017/18 BUDGET Foundations for A Secure Budget 2017/2018 Yes/ No Future Continue with Mid-Term Reforms: freezes in Reduce Wage Bill  civil service, Performance Contracts, Revise PSEMAS Policy Certainty (NEEEF, PPP) PPP legislation introduced in parliament. ? NEEEF undergoing revisions after 2016 public consultations. Reprioritize Expenditure N$9 billion allocated to Development ? Expenditure, increase from N$ 6.3 allocated in previous financial year Essential Infrastructure Spending Development Infrastructure prioritized ? includes: Railway Rehabilitation, Expansion of (Water, Energy, Social Housing) Walvis Bay Port, Mass Land Servicing & Housing, and Water & Storage Infrastructure  Public Management Reforms SOEs Reform & Divestiture Budget Deficit projected to decrease from Budget Deficit & Debt 6.3% (2016/17) to 3.5%  Debt to GDP projected to remain consistent at 42% Measures taken to stimulate ? ? increased industrial & economic activity (agriculture, tourism, etc.)

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