By Dylan Mukoroli
In a move that underscores domestic challenges, our Finance Minister Hon.Ericah Shafudah tabled the 2025/26 Mid-Year Budget Review on October 21, 2025, in Parliament.
This adjustment to the Medium-Term Expenditure Framework (MTEF) comes at a critical juncture for us as a country, as we grapple with sluggish mineral resources manufacturing output and mounting fiscal pressures.
While the review paints a cautious picture; revising the 2025 growth forecast downward to 3.3% from an optimistic 4.5%; it also demonstrates a commitment to fiscal prudence and strategic reallocations that could lay the groundwork for social, resilient, long-term economic expansion and may ultimately lead us towards a more sustained & meaningful growth trajectory.
The downgrade in growth projections is hardly surprising given the context. Namibia’s economy, heavily reliant on mining and manufacturing, has been battered by contractions in key sub-sectors like diamond processing,
We appreciate allocations that reiterates Namibia`s sustained commitment towards our social expenditure programs such as health & education.
These allocations will allow the Ministry of Health & Social Services leeway to appoint much needed staff and deploy them to areas where they are most needed. And the allocation towards Education will allow it to employ teachers, which is a major boost to our education sector.
This reallocation is pivotal in steering Namibia towards inclusive growth. By investing heavily in education and health, the government is addressing the root causes of inequality and unemployment; issues that have long plagued the country despite its resource wealth.
Encouragingly, the Tax reforms that have been tabled will further strengthen compliance capabilities across the board and will allow for a greater long term tax collection. Moreover, the accompanying tax reforms via the Income Tax Amendment Bill 2025 signal a proactive stance on competitiveness.
Reducing the corporate tax rate to 28% for non-mining businesses and offering a 20% special rate for SMEs and Special Economic Zones is a bold incentive for entrepreneurship and diversification away from extractives.
This is very important as extractives, despite their FDI intensitivity, has proven time again how unreliable they be when they are needed most. Hence H.E Dr. Nandi-Ndaitwah`s move to diversify and deploy more effort towards Agriculture remains an optimistic bet.
The current rally by the administration that sees SOEs as critical in driving economic growth is very commendable. There is currently a political norm of bail outs from central Government towards SOEs, economic growth is hinged on the ability of a sector to have productive outcomes.
The characterization of bail outs hampers the ability of SOEs to have productive outcomes and puts them in the same basket with private entities hence there is a need to restructure modus operandi if there is an aim to make profit.
The two way street here is to let go of the idea that GRN has to be in business and have a year-on-year fiscal plan to cover their operational expenses or extensively reform and restructure, we have done the latter with many SOEs, so it is doable.
On the issue of debt, the budget deficit has widened over the past two financial years plus the N$13.5 billion Eurobond that was paid once off. According to the Bank of Namibia, the Eurobond was taken out in 2015 to finance the country`s budget & support the domestic economy during a period of low mining income. This payment will affect Namibia`s foreign reserves as the bond is to be settled in full, it is expected to however recover slightly in 2026.
The Mid- term budget review adjustment shines in its disciplined approach. Hon.Shafudah wisely held the line on overall spending, maintaining the budget ceiling at N$89.4 billion while reallocating N$1.2 billion from underperforming capital projects and unfilled vacancies.
This isn’t fiscal austerity for its own sake; it’s a targeted recalibration that prioritizes high-impact areas aligned with the newly launched National Development Plan 6 (NDP6).
Hon. Shafudah and team has done their utmost best to steer the ship, have only taken over the ship 8 months ago, she is building the ship as it sails.
This review, despite challenges, puts government to task in really sticking to its guns, enforcing due diligence when implementing projects and the accountability thereof. The mantra of business unusual must be crosscutting.
This budget review, can steer our country towards a sustained & meaningful growth trajectory. The trajectory won`t be plain, it will be gravel, stoney, potholes and unseen bends in form of international risks. It’s like driving the Tallismanus road when it has rained. We will rally behind this plan in all our might to see its productive outcomes.
* Dylan Mukoroli is passionate about development finance & sustainable community development.
