Schlettwein optimistic despite alarm bells
Finance Minister Calle Schlettwein has moved to calm down nerves and to restore investor confidence following Friday’s decision by ratings agency Fitch to revise Namibia’s outlook from stable to negative.
Schlettwein said Tuesday that government will implement a raft of urgent policy measures that will ensure the country continues on a growth path while cutting its expenditure as its seeks to address concerns raised by ratings agency Fitch that saw its outlook revised from ‘stable’ to ‘negative’.
Among the proposals will be the implementation of spending cuts, which will see the freezing and suspension of new recruitment in the civil service, without impacting on employment creation opportunities for the youth.
Government also plans to better leverage state assets through public–private partnership, and equity participation, among other proposals.
“With a subdued outlook on economic growth and revenue, the emphasis on the policy response action will be on the expenditure side to ensure that we live within our means, doing more with less and to improving the quality of spending, without relenting on initiatives to improve revenue performance,” Schlettwein told a media briefing in the capital.
This comes as he maintained that the country had not been downgraded by Fitch.
“The rating is not a downgrade of the investment rating, but an opinion that the outlook is clouded with risks,” he said.
Economic Advisor in the presidency, Dr John Steytler, assured investors that the country will not default on its debt obligations.
“We are going to meet all out debt obligations and wont default. We have been aware of the outlook change for some time and put measures in place,” he said.
Fitch revised the country`s outlook citing an increase in the budget deficit in 2015/16 to 8.3 percent of GDP, above the fiscal target of 5 percent, and an increase in the government debt stock to 38.2 percent of GDP, above the target of 35 percent.
The ratings agency is also concerned by the deterioration of Namibia’s current account deficit to 14.1 percent of GDP in 2015 from 8.9 percent in 2013, declining levels of foreign reserves and the uncertainty caused by the planned introduction of the New Equitable Economic Empowerment Framework (NEEEF).