WINDHOEK, Oct. 30 (Xinhua) -- Namibia reported positive year-to-date revenue performance in the 2024/2025 financial year, revising total revenues upward by 1.7 billion Namibian dollars (about 96 million U.S. dollars) to 92.1 billion Namibian dollars, according to the 2024/2025 Mid-Year Budget review released Wednesday.
The upward revision reflects strong gains across various tax categories, including income, corporate, value-added, withholding, and stamp duties, said Minister of Finance and Public Enterprise Iipumbu Shiimi.
"In comparison to the preceding financial year, we expect revenues to post a growth of 13.1 percent year-on-year," he said.
He, however, highlighted challenges in the diamond sector, citing low international prices and weak demand. "Owing to low international diamond prices and depressed demand, we have cut expected revenues from the diamond sector for FY2024/25 by more than 2.3 billion Namibian dollars. Consequently, sustained weaknesses in the diamond sector remain the most significant risk to the fiscus in the short to medium term," he said.
Shiimi noted that international trade taxes, influenced by regional economic trends and impacting revenue from the Southern African Customs Union (SACU), add further fiscal uncertainty. Despite these challenges, domestic revenues are expected to strengthen in line with positive economic growth.
Shiimi said the revenue outlook for the remainder of the Medium Term Expenditure Framework (MTEF) remains uncertain, particularly regarding taxes on international trade. These revenue flows are influenced by trade and economic developments in the region, which directly impact contributions to the customs revenue pool.
"In this regard, the volatility of SACU revenues is yet another key risk to our fiscal position. Nevertheless, domestic revenue streams remain resilient and are estimated to gradually improve aligned to the positive economic growth outlook, as alluded to earlier," he said.
Total revenue as a proportion of gross domestic product (GDP) is projected to remain robust, averaging over 30 percent, said the official. He emphasized the government's commitment to fiscal sustainability, aiming to balance spending with revenue to prevent excessive debt accumulation.
"Consistent with the fiscal sustainability policy stance, aggregate expenditure over the next MTEF is anticipated to increase from a revised 101.2 billion Namibia dollars in FY2024/25 to 106.1 billion Namibia dollars by the end of the MTEF in FY2026/27," he said, noting that these expenditure ceilings will guide the preparation for the next MTEF, pending updated revenue estimates, including SACU receipts.
Shiimi added that given the revised spending levels, the overall budget deficit for FY2024/2025 is expected to remain at 3.2 percent of GDP, with moderate improvement in the primary surplus from earlier estimates.
"Going forward, we estimate the debt ratio to remain on a downward trend, reducing to 57.8 percent by the end of the MTEF," he said. ■
