N$1.3 billion for SOEs this year
Government transfers to state-owned enterprises is expected to top N$1.3 billion this fiscal year alone as it continues along its path of reformation to make them less dependent on the state.
This accounts to 1.8% of government’s expected expenditure, which amounts to N$70.8 billion.
Figures provided by the ministry of finance in its budget document indicate transfers to SOEs are expected to decline over the Medium-Term Expenditure Framework period, with N$1.24 billion expected to be budgeted for the 2023/24 fiscal year and N$1.25 billion in the 2024/25 fiscal year.
The most significant transfers include an allocation of N$353 million to the Namibia Broadcasting Corporation, N$188 million to Namibia Wildlife Resorts, N$175 million to TransNamib and N$107 million to the Namibia Institute of Pathology.
Taking a hard line
Commenting on the budget, financial services company Cirrus Capital noted that the government was taking a hard line on SOEs, as reflected in its budgetary allocations.
“Government has notably taken a more hard-line approach with SOEs in recent years, which has been necessary. However, this is likely only due to the severe financial constraints faced by government, a case of being forced to do so irrespective of real desire,” it said in its budget report.
It welcomed the large transfers to NBC and the NWR but questioned the slightly lower allocations to the NAC.
“The NBC receives a larger transfer, which is somehow still expected to decline in outer years, a situation that does not seem tenable given its dire financial position. NWR is receiving large transfers over the MTEF, given the impact of the pandemic on tourism, but it must be examined whether government truly needs to be active to this extent in an industry that does not need direct state involvement,” Cirrus said.
NAC allocation small
“Transfers to the Airports Company are surprisingly small given its fall in revenue and debts owed by the out-of-operation Air Namibia,” it added.
Stockbroker firm IJG Securities noted that the ministry of public enterprises had been allocated N$790.7 milliion, with the minister stating that the allocation to this vote is on a downward trend, due to “ongoing public enterprises reforms”.
This accounts to 1.8% of government’s expected expenditure, which amounts to N$70.8 billion.
Figures provided by the ministry of finance in its budget document indicate transfers to SOEs are expected to decline over the Medium-Term Expenditure Framework period, with N$1.24 billion expected to be budgeted for the 2023/24 fiscal year and N$1.25 billion in the 2024/25 fiscal year.
The most significant transfers include an allocation of N$353 million to the Namibia Broadcasting Corporation, N$188 million to Namibia Wildlife Resorts, N$175 million to TransNamib and N$107 million to the Namibia Institute of Pathology.
Taking a hard line
Commenting on the budget, financial services company Cirrus Capital noted that the government was taking a hard line on SOEs, as reflected in its budgetary allocations.
“Government has notably taken a more hard-line approach with SOEs in recent years, which has been necessary. However, this is likely only due to the severe financial constraints faced by government, a case of being forced to do so irrespective of real desire,” it said in its budget report.
It welcomed the large transfers to NBC and the NWR but questioned the slightly lower allocations to the NAC.
“The NBC receives a larger transfer, which is somehow still expected to decline in outer years, a situation that does not seem tenable given its dire financial position. NWR is receiving large transfers over the MTEF, given the impact of the pandemic on tourism, but it must be examined whether government truly needs to be active to this extent in an industry that does not need direct state involvement,” Cirrus said.
NAC allocation small
“Transfers to the Airports Company are surprisingly small given its fall in revenue and debts owed by the out-of-operation Air Namibia,” it added.
Stockbroker firm IJG Securities noted that the ministry of public enterprises had been allocated N$790.7 milliion, with the minister stating that the allocation to this vote is on a downward trend, due to “ongoing public enterprises reforms”.
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