Unspent Billions

With slightly more than a month left before the end of the 2011/2012 financial year, many development projects are yet to emerge from the starting blocks. Although money intended for this purpose is not completely lost, it can, however, not be used as revenue to fund other projects.

Billions of unspent money for projects falling under the Targeted Intervention Program for Employment and Economic Growth (TIPEEG) will be paid back to the Treasury when the 2011/2012 financial year comes to an end on March 31, 2012.

The Government will have to make provision for additional funds to try and implement projects that were earmarked for the 2011/2012 financial year that did not materialise due to a low execution rate of development projects.

The total price tag for TIPEEG, including public works amounts to N$14,7 billion over the medium time expenditure frame (MTEF) for the period 2011/2012 to the 2013/2014 financial years. At the same time, the development budget was nearly doubled from N$4, 5 billion to more than N$8 billion in the 2011/2012 financial year. However, the execution rate of the TIPEEG programme by November last year stood at 38%, while the rate for the development programme was even lower.

Deputy Finance Minister Calle Schlettwein told Namibian Sun that it is difficult to determine how much of the TIPEEG money will be returned to the Treasury as the financial year only ends on March 31.

“Normally the execution of capital projects is accelerated towards the end of the financial year, but I can confirm that not all the TIPEEG programmes for this year would be implemented before the cut-off date,” he said. “However, the money is not completely lost as it will be part of the balance of Government’s account which could help that the deficit is much smaller than originally planned.”

The expectation is that the 2012/2013 budget will be tabled in the National Assembly towards the end of this month, which will provide for an operational budget of more than N$32 billion and a development budget of more than N$7 billion.

According to Schlettwein, funds will be made again available for those projects that did not materialise in the 2011/2012 book year.

“This money could have been utilised for other projects and we could have already benefitted from the completed projects. This is a way of slowing down economic growth in Namibia which should be eliminated at all costs,” said Schlettwein.

It is expected that the education sector will again receive the bulk of the budget, with almost N$9 billion earmarked for the line ministry.

Finance Minister Saara Kuugongelwa-Amadhila earlier said the focus in the education sector will aim to address vocational skills development to help address the skills deficit and improve educational outcomes.

Health and Social Services will also receive more than N$3 billion, while slightly more than N$6 billion will be made available for public safety. An amount of N$5, 6 billion is earmarked for the economic sector, while N$3, 5 billion will be set aside for the administration sector.

click to enlarge UNDERDEVELOPED: Many of the informal settlements in Namibia could also benefi t from the TIPEEG Programme through an amount of N$1,8 billion available to improve housing and sanitation in the country and alleviate the persistent housing shortages © Feodora Von Francois