Budget: Prudence, pain and plodding on

Finance minister Ericah Shafudah’s 2026/2027 budget statement arrives with the lofty theme of ‘People, Productivity, and Prudence’ but as the dust settles on the speech, it is clear that this contract between the State and its people continues to be written in the ink of austerity. 

According to the minister, total expenditure is expected to remain broadly stable at N$105.9 billion, equivalent to 39.5% of GDP by end of March 2026, reflecting expenditure discipline despite revenue shortfalls. 

However, her ability to manoeuvre almost doesn’t exist, as the aggregate revenue forecast has been lowered to N$87.4 billion, down from the previously projected N$89.4 billion and below the actual N$89.1 billion collected in FY2024.“This budget is not merely a record of Namibian dollars; it is an unbreakable contract between the State and its people. It reflects both our development ambitions and the discipline required to safeguard macroeconomic stability, ensuring that today’s choices protect tomorrow’s opportunities,” she said in her speech on Thursday.

FALSE PRUDENCE 

Shafudah speaks of “fiscal prudence” as a moral imperative. In reality, this prudence is a desperate tightrope walk powered by highly optimistic assumptions. The budget remains dangerously tethered to the whims of the South African economy, with a projected N$24.3 billion, 27%, dependent on SACU receipts. 

Meanwhile, the “other mining” sector is expected to dip as gold operations shift, revealing a startling lack of diversification. Rather than forging new growth streams,the state continues to be hampered by the bottomless debt pool. 

Total government debt has ballooned to N$174.5 billion (65.2% of GDP) and is projected to hit a staggering N$217.3 billion by 2028/29. 

Most damning is the N$16.2 billion earmarked purely for interest payments this year, money that could have revolutionised our crumbling public services but instead crowds out productive spending.

As expected, the Education, Innovation, Youth, Sports, Arts, and Culture vote got the biggest allocation at N$28 billion, including N$2.8 billion for subsidised tertiary education, easing school congestion; and N$939 million for development projects. Sports, Youth, and National Services were allocated N$750 million. Health received N$13.1 billion, while safety and security got N$17 billion. Defence received N$7.5 billion, and Home affairs got N$8.1 billion. Agriculture and land reform were allocated a miserly N$1.8 billion. 

STAGNANT PRODUCTIVITY 

For a budget touting ‘Productivity’, there is a gaping hole where a real industrial plan should be. The minister’s reliance on Special Economic Zones (SEZs) as a long-term strategy for employment is, frankly, laughable. We’ve been here before, haven’t we?

It signals an administration that has abdicated its responsibility for job creation, choosing instead to outsource it to capital-friendly enclaves.

Where will the administration’s 500 000 jobs come from? 

Furthermore, essential infrastructure for housing, roads, and water is being pushed ‘off-balance sheet’ to be funded by State-owned enterprises (SOEs) and external loans. This sleight of hand protects the “fiscal space” of the central government only by overleveraging SOEs, a move that will inevitably see the costs of survival, water and shelter passed directly onto the overburdened user.

THE N$100 INSULT 

The ‘People’ dimension of this budget is perhaps the most insulting. While the average working Namibian faces a relentless wage squeeze, the state offers a pittance. The most vulnerable are offered a mere N$100 increase in the elderly pension, a gesture that barely registers against a 3.5% inflation forecast. They were promised N$3 000 during the campaign.The hypocrisy is galling: while the elderly are told to be grateful for pennies, the government has earmarked N$58 million specifically for “improvements to the basic pay and benefits” of public office bearers (POBs). This is not “tightening the belt”; it is the leadership lining their pockets while the average Namibian struggles to feed themselves.True cost-cutting should start with the entitlements of those in power, not the survival of the masses. 

Furthermore, the silence on the expensive Public Service Employees Medical Aid Scheme (PSEMAS) is deafening. In a budget that claims to prioritise the social sector, leaving the health security of public servants unaddressed is gross negligence. 

While N$259 million is allocated for recruiting health professionals, it is a drop in the ocean for a system that remains critically under addressed while they this week significantly talked down plans to force civil servants to use public health facilities.The minister used the phrase “income grant” zero times in her speech. 

Minister Shafuda’s speech is an admission of failure loosely dressed up as discipline. It attempts to address past fiscal mismanagement by guaranteeing medium-term pain, yet it offers no radical shift toward an equitable economy. 

By prioritising executive benefits over elderly dignity, this budget proves that the ‘People’ are not the priority; they are an afterthought.