Shafudah faces tough choices as revenue falls short

FMD, drought, fuel pose highest risk Economists say Namibia is likely to borrow more and have less to spend on public services this year as finance minister Ericah Shafudah tables the mid-term budget review today. They say the problem is not only that revenue is falling short. Most of the N$104-billion budget tabled in February is already committed to salaries, social programmes and debt interest, leaving little room to adjust when income drops or new costs appear. Foot-and-mouth disease (FMD) and the threat of drought are now adding to spending pressures that were not anticipated six months into the 2026/27 financial year. This comes as 93% of spending is tied up in operational costs, N$16 billion goes towards debt interest and revenue is falling.

WHAT ECONOMISTS EXPECT Economists expect the government to revise its financial projections as economic conditions have changed since the budget was presented in February. Economist Almandro Jansen estimates that government revenue could fall to N$87. 5 billion, about N$2. 1 billion below the N$89. 6 billion budgeted. He also expects expenditure to rise to N$106. 9 billion. This will widen the budget deficit to N$18. 7 billion, or 6. 5% of gross domestic product (GDP), from the budgeted 5. 5%. The government originally planned to spend about N104. 1billion during the financial year,including N$16. 2 billion on interest payments on public debt. “Interest costs could rise to N$16. 6 billion,” Jansen says. The increase would leave less room for other spending because the government must meet its debt obligations alongside salaries, social grants, public services and infrastructure projects. REVENUE UNDER PRESSURE The Namibia Revenue Agency (Namra) collected N$17. 1 billion in the first quarter, equivalent to 20. 7% of its annual revenue…