31 Oct 2024
Finance Minister Details Budget Shift to Address Infrastructure and Drought Challenges
The Namibian government has reallocated N$2.1 billion earmarked for railway projects in the 2024 budget to other initiatives, citing low execution rates on capital projects, according to the Mid-Year Budget Review.
Finance and Public Enterprises Minister Iipumbu Shiimi said the reallocated funds primarily affect railway sector projects. Despite this, Shiimi affirmed the government's commitment to securing adequate funding for railway network development, emphasizing the sector’s importance in stimulating economic activity.
Shiimi added that the Finance Ministry will collaborate with the Ministry of Works and Transport and state-owned rail company TransNamib to expedite the national railway network’s upgrading.
For the 2024/25 fiscal year, N$2.5 billion was initially allocated for railway infrastructure, including N$1.9 billion for upgrading the Kranzberg-Otjiwarongo section and N$488 million for rehabilitating the Sandverhaar-Buchholzbrunn section in the country’s south. Over a three-year period ending in 2027, the government planned to invest a total of N$6.6 billion into railway network development.
TransNamib received an additional N$300 million to support daily operations, acknowledging the entity’s substantial infrastructure and operational challenges.
In addressing the country’s external debt, Shiimi reported that the government secured N$3.7 billion in external financing through negotiations with the African Development Bank (AfDB) to upgrade railway lines between Kranzberg-Tsumeb and Otavi-Grootfontein. The government will contribute about N$3.4 billion, bringing the total investment to N$7.1 billion.
Shiimi also highlighted the impact of a prolonged drought that has hampered economic activity and caused hardship across Namibia. He noted that additional provisions are needed to alleviate the drought’s impact on livelihoods and economic sectors.
In parallel, the Ministry of Works and Transport continues to expand the national road network, with a focus on rural infrastructure. According to Shiimi, improving rural road access aims to boost living standards by improving access to essential services and enhancing economic opportunities.
Earlier this year, Shiimi tabled a N$100.1 billion budget, allocating N$74.6 billion for operational expenses, N$12.8 billion for development expenditure—N$3.2 billion of which is to be funded from sources outside the State Revenue Fund—and N$12.8 billion for interest payments.