The African Development Bank said it has approved a $3 billion loan for the Namibian government to support the national budget.
This year’s national budget provides for total government spending of N$65 billion but the government needed additional money to make up that total.
The continental bank, in a media statement issued tonight, said the loan, the second of a two-year series, will support the national budget for the 2018/2019 financial year.
“It aims at strengthening public financial management and improving the quality and efficiency of public sector spending, while laying a solid foundation for industrialisation through support to critical business environment reforms,” the statement said.
According to the bank, the loan builds on the previous loans approved last year, which has achieved positive results such as the reduction of the budget shortfall.
“It has also helped to improve the country’s liquidity situation at a time when domestic market liquidity was low, occasioned by constrained cash flow; and funding to retire pending invoices in critical ministries, including education and health, which helped to avoid a looming crisis of private credit crunch,” the bank said.
The first budget support also helped operationalise some policy and laws, including the Public Private Partnership Act, Namibia Revenue Agency Act and the Public Procurement Regulations, the statement added.
Finance minister Calle Schlettwein said last year that Namibia wanted a N$10 billion loan from the African Development Bank.
At the time, Schlettwein said government will get N$3 billion to bridge budget shortfalls, and another N$3 billion this year for the same purpose.
The remaining N$4 billion of the loan earmarked for financing “development projects” will also be utilised over the two financial years, the minister said.