• Contact Us
  • About Us
  • Advertisement
  • Privacy & Policy
Saturday, June 7, 2025
SUBSCRIBE
The Brief | Namibia's Leading Business & Financial News
26 °c
Windhoek
22 ° Wed
25 ° Thu
  • Home
  • Companies
    • Finance
    • Agriculture
    • Technology
    • Property
    • Trade
    • Tourism
  • Business & Economy
  • Mining & Energy
  • Opinions
    • Analysis
    • Columnists
  • Africa
  • e-edition
No Result
View All Result
The Brief | Namibia's Leading Business & Financial News
  • Home
  • Companies
    • Finance
    • Agriculture
    • Technology
    • Property
    • Trade
    • Tourism
  • Business & Economy
  • Mining & Energy
  • Opinions
    • Analysis
    • Columnists
  • Africa
  • e-edition
No Result
View All Result
The Brief | Namibia's Leading Business & Financial News
Subscribe
No Result
View All Result
TB image banner 750x140
Home Opinions

Dissecting 2025-2026 budget hits and misses

by editor
March 31, 2025
in Opinions
6
A A
365
SHARES
6.1k
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

By David Iileka

You might also like

Unlocking the Potential of the Audio-Visual Industry in the Creative Economy

When the student becomes the boss

Pitching for Namibia, Innovating for Africa: My Bingwa PLUS Journey

As the largest employer and biggest spender in the country, government decisions on where and how to allocate funds shape the economic landscape for businesses, workers and households alike.

Beyond the headline figures, the 2025/26 budget reveals the difficult trade-offs of fiscal policy, highlighting persistent structural challenges that limit economic dynamism.

This year’s budget speech comes against the backdrop of a weaker global economic environment. Although Namibia has posted strong growth, it’s not the same for the global economy where the post-pandemic recovery remains uneven, and international demand is subdued.

One of Namibia’s economic mainstays, the diamond sector, has lost its luster, contributing to revenue pressures. On a positive note, lower fuel prices are expected to provide some relief, though their impact on overall economic performance remains uncertain.

Revenue estimates for the 2025/26 financial year are set at N$92.6 billion, a modest 1.9% increase from the previous year.

However, this increase masks a key pressure point: the sharp decline in revenue from the Southern African Customs Union (SACU), which will contribute N$6.9 billion less than in the previous period. Given SACU’s historical significance as a revenue anchor, this reduction places strain on government spending plans. 

Notably, there have been increasing calls to rework or remodel SACU’s revenue-sharing framework. With Namibia and other member economies heavily dependent on SACU inflows, discussions have emerged around whether the current structure is sustainable and fair. 

Moreover, the government intends to spend N$106.3 billion over the next 12 months. A closer look at the spending breakdown raises concerns about the balance between operational and developmental expenditures.

The operational budget, which primarily covers salaries and administrative costs, accounts for a substantial N$79.8 billion. Meanwhile, only N$12.8 billion is allocated to the development budget, the very segment meant to drive long-term economic growth and job creation.

Breaking it down further, remuneration alone accounts for approximately N$31.5 billion, making up nearly 30% of the total budget, if one includes other remuneration related expenses, such as social security and others, the total wage bill amounts to N$36.6 billion.

This heavy wage bill reflects the public sector’s dominant role in employment but also highlights a structural issue: Namibia’s budget is weighted toward maintaining government operations rather than catalysing economic expansion.

This allocation structure underscores a fundamental challenge: while government policy emphasises job creation as a national priority, the budget does not fully align with this ambition. Economic growth and employment are driven by investment in infrastructure, industrialisation and enterprise support, areas that are underfunded relative to the scale of Namibia’s unemployment problem.

The reliance on an expansive operational budget raises concerns about the capacity to stimulate economic development and growth.

As a developing nation, Namibia needs a development budget that is high enough to support industrialisation, infrastructure expansion and private sector-led job creation. Without this, the country remains stuck in a cycle where the government remains the primary employer but lacks the fiscal space to meaningfully tackle unemployment.

With a debt-to-GDP ratio of 66% and total debt standing at N$165.9 billion, Namibia’s debt levels remain within a manageable range. Crucially, much of this debt is domestic, reducing exposure to external shocks. However, the risk lies in revenue underperformance, this past financial year alone, projected government revenue fell N$1.2 billion short of initial estimates.

While borrowing to cover shortfalls is a standard practice, it places pressure on future budgets and raises concerns about how the country will navigate long-term fiscal sustainability. The government projects revenue as a ratio of GDP to remain strong, averaging 32.0% over the MTEF, which is considerably higher than most countries across the continent. 

One notable omission from the budget statement was Air Namibia. While discussions around reviving a national airline have gained momentum, particularly under the new administration, the absence of direct budgetary mention signals that other priorities have taken precedence.

This does not mean the idea has been shelved, but it suggests that any potential revival would likely require alternative financing mechanisms or future budget revisions.

The 2025/26 budget seems to be a necessary balancing act. The government must manage limited resources in a challenging economic environment, and the fiscal strategy reflects an attempt to maintain stability while addressing pressing needs. However, the heavy tilt toward operational spending over development raises concerns about whether this budget can truly catalyse economic expansion and job creation.

While debt remains manageable and revenue forecasts are realistic, the reliance on a shrinking SACU pool underscores the need for more robust domestic revenue generation strategies.

The budget, therefore, offers stability but little transformative change. In an economy with high unemployment and lack of (inclusive) economic  development, the question remains: Can Namibia afford to remain in a fiscal holding pattern, or does it need bolder interventions to shift its economic trajectory?

Perhaps it’s time to implement a bold policy that takes a somewhat opposite approach to the fiscal consolidation programme introduced in 2015/16.

David Iileka is the co-founder of Lunkir. He can be reached on X at @dniilka.

author avatar
editor
See Full Bio
Tags: budgetDavid Iilekanamibia
Share146Tweet91Share26
Previous Post

Oryx Properties to acquire Platz am Meer Shopping Centre for N$290 million

Next Post

Bank of Namibia declares record N$720 million dividend

Recommended For You

Unlocking the Potential of the Audio-Visual Industry in the Creative Economy

by reporter
June 6, 2025
0
Unlocking the Potential of the Audio-Visual Industry in the Creative Economy

By Tweuya Nelumbu The audio-visual (AV) production industry in Namibia has long existed, however remains emerging. The trading of technical skills amongst technicians and engineers is significantly considered...

Read moreDetails

When the student becomes the boss

by reporter
June 6, 2025
0
Leadership without authority

By Junias Erasmus An internship is a short-term work opportunity offered by organizations to students, recent graduates, or individuals seeking practical experience in a specific field. These roles,...

Read moreDetails

Pitching for Namibia, Innovating for Africa: My Bingwa PLUS Journey

by reporter
June 6, 2025
0
Pitching for Namibia, Innovating for Africa: My Bingwa PLUS Journey

By Tuwilika Nafuka Nigeria has always been on my bucket list, but I wanted to go with a purpose, and this was it. Since 19 February 2025, I’ve...

Read moreDetails

AI slop and the brand

by reporter
June 5, 2025
0
Keller’s imagery and feelings: What you see is what you feel

By Pierre Mare I have been watching a lot of AI slop on Facebook. AI slop is throw-away content, usually but not always generated by AI. It is...

Read moreDetails

Understanding the legal consequences of default

by reporter
June 5, 2025
0
Understanding the legal consequences of default

By Eddie King Understanding the legal consequences of financial default is essential for anyone managing personal or business-related debt. Default occurs when a debtor fails to meet the...

Read moreDetails
Next Post
Bank of Namibia declares record N$720 million dividend

Bank of Namibia declares record N$720 million dividend

Related News

Govt called to leverage PPPs to enhance infrastructure

Govt called to leverage PPPs to enhance infrastructure

July 9, 2024
Bad news for motorists: Mantashe says fuel levy cut won’t be extended beyond May

Bad news for motorists: Mantashe says fuel levy cut won’t be extended beyond May

May 20, 2022
Agribank funds acquisition of 10 million hectares of land

Agribank funds acquisition of 10 million hectares of land

July 13, 2023

Browse by Category

  • Africa
  • Agriculture
  • Analysis
  • Business & Economy
  • Columnists
  • Companies
  • Finance
  • Finance
  • Fisheries
  • Green Hydrogen
  • Health
  • Investing
  • Latest
  • Market
  • Mining & Energy
  • Namibia
  • News
  • Opinions
  • Property
  • Retail
  • Technology
  • Tourism
  • Trade
The Brief | Namibia's Leading Business & Financial News

The Brief is Namibia's leading daily business, finance and economic news publication.

CATEGORIES

  • Business & Economy
  • Companies
    • Agriculture
    • Finance
    • Fisheries
    • Health
    • Property
    • Retail
    • Technology
    • Tourism
    • Trade
  • Finance
  • Green Hydrogen
  • Investing
  • Latest
  • Market
  • Mining & Energy
  • News
    • Africa
    • Namibia
  • Opinions
    • Analysis
    • Columnists

CONTACT US

Cell: +264814612969

Email: newsdesk@thebrief.com.na

© 2024 The Brief | All Rights Reserved. Namibian Business News, Current Affairs, Analysis and Commentary

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

No Result
View All Result
  • Home
  • Companies
  • Mining & Energy
  • Business & Economy
  • Opinions
    • Analysis
    • Columnists
  • Africa

© 2024 The Brief | All Rights Reserved. Namibian Business News, Current Affairs, Analysis and Commentary

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.