The government will need to generate annual savings of approximately N$2.3 billion over the current Medium-Term Expenditure Framework (MTEF) period if it is to stabilise public finances and place Namibia’s debt on a sustainable trajectory, Prime Minister Elijah Ngurare has warned.
Speaking at the official opening of the 2026/27 Budget Reform Roll-Out Workshop on Monday, Ngurare said the country’s public debt has reached N$174.6 billion, equivalent to 65.2% of gross domestic product (GDP), while the fiscal deficit is projected at 5.5% of GDP during the current financial year.
He said government remains committed to reducing the fiscal deficit to 3.3% of GDP by the 2028/29 financial year, but cautioned that achieving this objective would require strict expenditure controls across the public sector.
“The debt trajectory, on one hand, requires N$2.3 billion in annual savings during the current MTEF period to come from expenditure restraint; these savings must therefore be identified early, protected during execution, and safeguarded against slippages,” Ngurare said.
The Prime Minister stressed that spending cuts alone would not be sufficient to restore fiscal sustainability and argued that consolidation efforts must be accompanied by stronger economic growth and more effective public investment.
He called on government institutions to prioritise capital projects that boost productivity, attract private sector investment and improve service delivery.
Ngurare also warned against redirecting funds earmarked for development projects towards recurrent expenditure, saying such practices undermine long-term economic growth and weaken government’s ability to address fiscal pressures.
“This means directing scarce resources toward projects that raise productivity, crowd in private investment, expand economic opportunity, and improve service delivery. In other words, fiscal consolidation and development are not competing objectives. When we protect capital expenditure, improve project selection, and ensure timely execution, we support growth, widen the future revenue base, and make debt reduction more achievable and more credible,” he said.
The remarks come as government intensifies efforts to restore fiscal discipline amid rising debt levels and growing pressure on public finances.
