The mid-term budget review says “prudence.” The numbers say “trouble.”
Government is staring at a N$3.2 billion revenue hole and a deficit expected to hit 6% of GDP. Total debt has climbed to N$177.1 billion — 67% of GDP — and is still rising.
The gap will be filled not by windfalls or foreign investors, but by local lenders and taxpayers who already shoulder too much.
The revenue picture has dimmed. VAT has been revised down. Diamond income has weakened and is unlikely to bounce back soon.
SACU inflows have softened. With no significant new tax measures on the table, the state will lean harder on the same base. Interest payments already consume 16.1% of every dollar collected.
Spending tells a similar story. Operational budgets were padded with politically appealing allocations to education and health.
Development spending — the only part that builds real capacity — was cut by almost 10%. That is not fiscal reform. That is plugging holes to get through the year.
The 3.3% growth forecast for 2025 is wishful. Manufacturing is weak. Diamond mining is in decline. Consumer demand is slowing.
To keep the lights on, the state is turning to domestic borrowing after Eurobond redemption. Yields may be friendly now, but spreads are widening. If markets shift, borrowing costs will spike.
The budget speech still talks about “priority spending.” The reality is a slow slide into austerity, even if government refuses to name it. Interest costs are crowding out everything else.
There are flickers of honesty in the numbers: the Ministry of Finance has stopped pretending VAT can carry the state. Spending forecasts have been trimmed. But that is not a fiscal victory — it is a reckoning.
This is a budget propped up by debt. And that debt sits squarely on the shoulders of ordinary Namibians and domestic lenders.
Without private-sector growth to broaden the tax base, this is not sustainable. It is a slow bleed.
*Briefly is a weekly column that is opinionated and analytical. It sifts through the noise to make sense of the numbers, trends and headlines shaping business and the economy with insight, wit and just enough scepticism to keep things interesting. THE VIEWS EXPRESSED ARE NOT OUR OWN, we simply relay them as part of the conversation.
