Namibia - Budget Calender

The MTEF has the following key characteristics:

• It sets out the macro-fiscal framework for the coming three years, reviews government fiscal policy objectives, and provides expenditure ceilings for the operational and development budgets by Vote.
• The allocation of resources and expenditure priorities are set in line with Namibia’s Vision 2030, and National Development Plans.
• The MTEF is supported by MTPs prepared for each Vote. The MTPs set out, for each Vote, the total resources allocated to each Program, the main activities to be carried out under each Program, and how the Programs will help to achieve the ministries’ objectives which contribute to the overall national development objectives. The expenditure plans are linked to socioeconomic variables in the PEMP.
• The MTEF covers a period of three years, but is revised every year. It thus serves the purpose of threeyear rolling budget and also an annual budget. The Votes also include statements on financial operations of some special funds and state-owned enterprises falling under the respective ministry.
• The MTEF is regarded as the main budget document, and detailed information on the budget estimates is presented in the accompanying books—Estimates of Revenue and Expenditure and the Three-Year Rolling Development Budget.

The MTEF in Namibia, in principle, could offer several major advantages:

• Its medium-term perspective enables a rationalization and improvement in the sectoral and intra-sector allocation of resources in terms of Government priorities.
• The MTEF expands the budget coverage by including donor and other extra-budgetary funds.
• It integrates the operational and development budgets and relates recurrent costs to capital expenditure.
• It puts increased emphasis on performance as programs are expected to be planned and costed with a view to produce outputs that in turn should achieve objectives.

In practice, the MTEF process is still in its early stages and falls short of its potential as a tool for rational allocation of resources, review of priorities, and decision making. In particular:

• While the MTEF is presented by Vote Programs (through the MTPs), the detailed budget estimates for each Vote continue to be shown by Divisions and Sub-divisions (economic items). The expenditures are classified and recorded by Divisions and Sub-divisions alone. Thus, there is as yet no explicit link shown between the Vote-level Programs in the MTEFs and Votes, Divisions and Sub-divisions, and thus the report on the budget implementation through the Appropriation Accounts and the Audit Report. Hence it is not possible to compare what was supposed to have been spent on programs with what was actually spent.

The MTEF process is currently largely top-down, concentrating on the aggregate expenditure amounts. The bottom process for feeding back into the MTEF ceilings is limited; this also hampers the Government’s ability to use the budget as a strategic tool for achievement of its development goals.
• Expenditure allocations still seem to follow an incremental basis; estimates for the two out years do not reflect reprioritization or genuine costing of programs, but seem to be derived by applying uniform growth factors.