Embed Size (px)
Citation preview
AFRICAN DEVELOPMENT BANK
NAMIBIA
ECONOMIC GOVERNANCE AND COMPETITIVENESS
SUPPORT PROGRAMME – PHASE II (EGCSP II)
STREAMLINED APPRAISAL REPORT
RDGS/ECGF
July 2018
Pu
bli
c D
iscl
osu
re a
uth
ori
zed
Publi
c D
iscl
osu
re a
uth
ori
zed
TABLE OF CONTENTS
Currency Equivalents i
Fiscal Year i
Weights and Measurement i
Acronyms and Abbreviations ii
Program and Loan Information iv
Program Timeframe-Main Milestones v
Program Executive Summary vi
Results-based Logical Framework vii
I – INTRODUCTION: THE PROPOSAL
II – UPDATE ON COUNTRY ELIGIBILITY
III – YEAR 2018 PROGRAM
3.1 Program Goal and Purpose
3.2 Program Components
3.3 Program Output and Expected Results
3.4 Progress on Triggers Outlined in the Previous Operation
3.5 Policy Dialogue
3.6 Loan Conditions
3.7 Application of Good Practice Principles on Conditionality
3.8 Financing Needs and Arrangement
IV – OPERATION IMPLEMENTATION PROGRAM
4.1 Beneficiaries of the Program
4.2 Implementation, Monitoring and Evaluation
4.3 Financial Management, Disbursement and Reporting Arrangements
4.4 Procurement
V – LEGAL DOCUMENTATION AND AUTHORITY
5.1 Legal Documentation
5.2 Conditions Associated with Bank’s Intervention
5.3 Compliance with Bank’s Policies
VI – RISK MANAGEMENT
VII – RECOMMENDATION
List of Tables
Table 1: Macroeconomic developments
Table 2(a) Progress on Targets from the Results-Based Logical Framework
Table 2 (b) Progress towards achievement of Outcome and Impact Indicators
Table 3: Prior Actions and Required Evidence for FY 2018/19: EGCSP II
Table 4: Bank Group Financing
Table 5 Conditions Precedent to Disbursement
Table 6: EGCSP Risk and Mitigation Measures
1
2
7
7
8
9
12
14
14
16
16
17
17
17
18
18
18
18
18
19
19
19
6
10
11
14
16
19
19
Appendices
Appendix I: Letter of Development Policy
Appendix II: IMF Press Release
Appendix III: Updated Eligibility Criteria for Budget Support
Appendix IV: EGCSP II Updated Policy Matrix
Appendix V: Social Sector Challenges and Development
Appendix VI: Link Between EGCSP and Infrastructure Development Programs
Appendix VII: Development Partners’ sectoral areas of intervention and resource commitments
Appendix VIII: Map of the Republic of Namibia
i
CURRENCY EQUIVALENTS (As of June 2018)
1 UA = NAD 17.82
I UA = ZAR 17.82
1 UA = USD 1.42
1 UA = EUR 1.21
FISCAL YEAR April 1 – March 31
WEIGHTS AND MEASURES
1metric tonne = 2204 pounds (lbs)
1 kilogramme (kg) = 2.200 lbs
1 metre (m) = 3.28 feet (ft)
1 millimetre (mm) = 0.03937 inch (“)
1 kilometre (km) = 0.62 mile
1 hectare (ha) = 2.471 acres
ii
ACRONYMS AND ABBREVIATIONS
ADF African Development Fund
AfDB African Development Bank
AG Auditor General
AU Accounting Unit
BoN Bank of Namibia
BOP Balance of Payments
BSO Budget Support Operation
CAR Commitment at Risk
CFRA Country Fiduciary Risk Assessment
CMA Common Monetary Area
CPPR Country Portfolio Performance Review
CSO Civil Society Organization
CSP Country Strategy Paper
CPIA Country Policy and Institutional Assessment
DO Development Objective
DPs Development Partners
DSA Debt Sustainability Analysis
EGCSP Economic Governance and Competitiveness Support Program
ESW Economic and Sector Work
EU European Union
FDI Foreign Direct Investment
FM Financial Management
FY Fiscal Year
GBS General Budget Support
GCI Global Competiveness Index
GDP Gross Domestic Product
GRN Government of the Republic of Namibia
HDI Human Development Index
HRMIS Human Resources Management Information System
IFMIS Integrated Financial Management Information System
IIDP Infrastructure Investment Development Programme
IMF International Monetary Fund
IOP Indicative Operational Program
IRD Inland Revenue Department
KPI Key Performance Indicator
MDGs Millennium Development Goals
MIC TAF Middle Income Country Technical Assistance Fund
MITSME Ministry of Industrialization, Trade and SME Development
MoF Ministry of Finance
MPE Ministry of Public Enterprises
MSME Micro, Small and Medium Enterprise
MTEF Medium Term Expenditure Framework
MTFF Medium Term Fiscal Framework
MTP Medium Term Plan
MTR Mid-Term Review
NAD Namibia Dollar
NAMFISA Namibia Financial Institutions Supervisory Authority
NANGOV Namibia Non-Governmental Organizations’ Forum
NAMRA Namibia Revenue Agency
OECD Organization for Economic Cooperation and Development
iii
PBO Program Based Operation
PCR Project Completion Report
PEFA Public Expenditure and Financial Accountability
PFM Public Financial Management
PPPs Public Private Partnerships
PSD Private Sector Development
SACU Southern Africa Customs Union
SADC Southern Africa Development Community
SARB South African Reserve Bank
SME Small and Medium Enterprises
SoE State-Owned Enterprise
SSN Social Safety Nets
TA Technical Assistance
TYS Ten-Year Strategy
UA Bank Group Unit of Account
USD United States Dollar
VAT Value-added Tax
WB World Bank
ZAR South African Rand
iv
PROGRAM INFORMATION
INSTRUMENT GENERAL BUDGET SUPPORT – PROGRAM BASED LOAN
PBO DESIGN TYPE PROGRAMMATIC OPERATION
LOAN INFORMATION Client’s information
BORROWER: REPUBLIC OF NAMIBIA
EXECUTING AGENCY: MINISTRY OF FINANCE
Financing plan for 2017 and 2018
Source Amount (2017) Amount (2018)
ADB Loan 3 billion Rand (ZAR) 3 billion Rand (ZAR)
TOTAL
FINANCIING
3 billion Rand (ZAR) 3 billion Rand (ZAR)
ADB key financing information
1 GRN will have the option to pay the Front-end Fee: (i) either from its own resources, or (ii) by deducting its amount from the loan proceeds at first
disbursement.
Loan Currency South African Rand (ZAR)
Loan Type Fully Flexible Loan
Tenor 12 years (Up to 25 years inclusive of Grace Period)
Grace period 3 years (Up to 8 years)
Average Loan Maturity* TBD (function of the amortization profile)
Repayments 48 Consecutive quarterly payments after grace period
Interest Rate Base Rate +Funding Cost Margin+ Lending Margin + Maturity Premium
This Interest Rate will be floored to zero
Base Rate
Floating Base Rate ( 3-month JIBAR reset each 1st February, 1st May, 1st August and 1st November)
A free option to fix the Base Rate is available
Funding Cost Margin The Bank funding cost margin as determined each 1st January and 1st July and applied to the Base Rate
each 1st February, 1st May, 1st august and 1st November
Lending Margin 80 basis points (0.8%)
Maturity Premium 0%
Front-end fees 0.25% of the loan amount payable on the date of entry into force of the Loan (as defined in the
General Conditions), and payable no later than sixty (60) days from the date of entry into force or at
first disbursement, whichever is the earlier.1
Commitment fees 0.25% of the undisbursed amount. Commitment fees start accruing 60 days after signature of the loan
agreement and are payable on Payment dates
Option to convert the Base Rate** In addition to the free option to fix the floating Base Rate, the borrower may reconvert the fix rate to
floating or refix it on part or full disbursed amount.
Transaction fees are payable
Option to cap or collar the Base
Rate**
The borrower may cap or set both cap and floor on the Base Rate to be applied on part or full disbursed
amount
Transaction fees are payable
Option to convert loan currency** The borrower may convert the loan currency for both undisbursed or disbursed amounts in full or part
to another approved lending currency of the Bank
Transaction fees are payable
v
Timeframe - Main Milestones
Program Appraisal May/June 2018
Program Approval July 2018
Loan Effectiveness August 2018
Disbursement Closing Date 30 June 2019
Completion 30 June 2019
vi
PROGRAM EXECUTIVE SUMMARY
Paragraph Topics to cover 2018 Program overview
Program name: Namibia – Economic Governance and Competitiveness Support Program II (EGCSP II). This is the second phase of the two year programmatic series, for the period 2017/18 – 2018/19. Program Goal and Objective: Remaining consistent with the original program approved by the Board of Directors on 10th May 2017, the goal of EGCSP II is to support the implementation of the Namibian government’s medium term development agenda, aimed at accelerating inclusive growth and sustainable development, by preserving macroeconomic stability, and addressing the challenges of lack of diversification, high unemployment and income inequality. The three components are: (i) Advancing fiscal consolidation which supports measures to improve revenue collection, enhance efficiency in public spending, and improve debt management; (ii) Strengthen public financial management and public sector efficiency by improving the public procurement,
internal and external audit functions and the governance framework for SOEs; and (iii) Improve the business environment for industrialization through enhancement of the investment facilitation framework, and improving the framework for industrial and MSME development. Expected outputs in 2018 are: (i) Revenue performance enhanced (establishment of NAMRA); (ii) Expenditures streamlined and rationalised (containment of the wage bill, % of the budget allocated to social expenditures); Debt management enhanced (development of a robust debt management framework); Strategic anchor for PFM reforms strengthened (public enterprise tracking surveys, improvement of the policy framework for internal audit); Enhanced efficiency and value for money in public procurement; Governance of SOEs improved; Investment facilitation framework and processes enhanced (including dispute
resolution mechanism; business registration and licensing, PPP framework improved); Industrial development and value addition enhanced; and Framework for MSME development improved. Program Cost: The program cost for the second phase of the two-year programmatic operation is 3 billion Rand (same as Phase I). That brings the total for the two year programmatic series to 6 billion Rand
2018 Country context and Overview
In 2017, the Namibian economy recorded a negative growth estimated at -0.8% from a positive growth of 0.7% in 2016. This slowdown was mainly attributed to persistent external shocks (including relatively weak global growth), falling commodity prices, especially uranium prices, poor growth performance of neighbouring countries including South Africa and Angola, and sharp reduction in SACU revenues. Growth has bottomed out with a mild recovery expected in 2018. Growth is expected to
come mainly from a rebound in mining activity, tourism and agriculture (owing to a good rainfall). The Government remains committed to fiscal consolidation. Total public debt-to-GDP is projected at 43.3% in the 2018/19 period and is expected to stabilize at around 45.3% over the MTEF period. Additional consolidation is needed to ensure debt sustainability but such efforts should be spread out over a number of years to soften the negative impact on growth. The Authorities are taking steps geared towards containing public wage growth, rationalizing transfers and reducing tax exemptions, while increasing social assistance programs and improving targeting to protect the poor. The country also continues to face significant structural challenges and needs to take further steps to deal with the high levels of poverty, unemployment and inequality. This will require policies that promote inclusion and improve the business environment, particularly those that target MSME and industrial development.
Lessons learnt
The key lessons learnt from the implementation of Phase I of the operation include: (i) Government ownership is critical: The success of the programme and the achievements of Phase I are largely due to government ownership of the reform effort. The measures being supported emanate from the Government’s own fiscal consolidation programme, and other policy and strategy documents such as the Harambee Prosperity Plan; National Industrial Policy, etc. (ii) Importance of donor coordination: The Bank ensured full engagement with other development partners (DPs) from the conception stage and throughout the processing of Phases I and II of the operation. This helped to ensure that there is no
duplication of effort. Other DPs have provided very useful information regarding important developments on the ground. For example, the Bank worked closely with GIZ in selecting the focus areas of the business environment component of the programme. (iii) Need for speedy response: Both Phases I and II needed to be fast-tracked to meet the Government’s request for quick delivery. That is the only way to respond swiftly to RMCs’ requests for urgent support. (iv) Importance of TA: Capacity challenges in Namibia are a key hindrance to project implementation. There is need for close collaboration and to package each lending operation with some technical assistance. In addition to the ongoing PPP Technical Assistance project, support to SOE and public procurement reform is necessary but the lack of TA instruments within
the Bank (in the absence of MIC Grant resources) has made this difficult. The Bank will work closely with other DPs to tap into their available TA funds to support critical aspects of the operation. (v) Flexibility is necessary: Flexibility inherent in the design of programmatic operations is necessary to adapt to changing circumstances during the programme implementation, particularly in the selection of prior actions.
Conditions for continued support
The political environment in Namibia continues to be very stable. Despite facing a difficult economic situation, macroeconomic stability has been maintained. Government has demonstrated strong commitment to fiscal consolidation. The relatively high debt level remains a concern but steps are being taken to boost growth and rein in the fiscal deficit.Public debt/GDP is projected at 43.3% in 2018/19 and is expected to stabilize at around 45.3% over the MTEF period. Poverty eradication remains a key priority.
GRN has published a Blueprint on Wealth Distribution and Poverty Eradication and its Implementation Plan aimed at advancing strategies for eradication of poverty and reducing income inequality. The updated CFRA by the Bank shows that Namibia has continued to make progress in implementation of PFM reforms in several areas including cash and debt management, financial reporting and public procurement. Donor coordination framework is also adequate, although there is room for improvement. The Bank continues to coordinate the implementation of the program in close collaboration with other development partners.
Policy dialogue and
linked technical assistance
EGCSP II will continue to focus on supporting fiscal consolidation, PFM and public sector efficiency and investment climate reforms. The program will create a strong platform for policy dialogue and advisory services, with the Bank’s Directorate General
- South playing a pivotal role. The on-going MIC Grant Project has created a string platform to dialogue on PPP and public investment management. The scope of technical assistance interventions will be expanded, in close consultation with other development partners, to strengthen the effectiveness of the PBO and other interventions. The necessity for such TA was emphasized during the consultations with development partners during the Appraisal mission
vii
RESULTS-BASED LOGICAL FRAMEWORK
Country and project name: Namibia: Economic Governance and Competitiveness Support Program II (EGCSP II)
Purpose of the project: To promote inclusive growth and economic competitiveness and diversification through improved economic management and business environment reforms.
RESULTS CHAIN PERFORMANCE INDICATORS
MOV RISKS/MITIGATIO
N MEASURES Indicator (including CSI*) Baseline Target
IMP
AC
T
Inclusive growth
and enhanced
economic
competitiveness
Real GDP growth 20.2% (2016) 3.3% (2019/20)
IMF/
MoF
Risk #1:
Macroeconomic
risks: Namibia’s
vulnerability to
external shocks
remains a major source
of risk. The economic
outlook envisages
downside risks
stemming mainly from
further declines in
SACU revenue and
commodity prices,
slow growth in mining
and construction and
debt-related risks.
Mitigation: Embark
on further pro-growth
fiscal consolidate
efforts to bring public
debt on a declining
path, safeguard
priority capital and
social spending and
implement reforms
geared towards
addressing structural
challenges.
Risk #2: Fiduciary
risks: The Country
Fiduciary Risk
Assessment (CFRA)
conducted by the Bank
for Namibia in 2017
indicates that the
overall residual risk
level is deemed
moderate, taking into
account the risk
mitigation factors.
Some of the areas of
weakness identified
relate to the legal and
regulatory framework,
and roll out and
integration of the
Integrated Financial
Management System
(IFMIS). Failure to
mitigate the identified
fiduciary risks could
negatively impact
program
implementation, and
Poverty rate (disaggregated by
gender)
318% (2015/16)
(M-7%; F-12%)
12% (2019/20)
(M-4%, F-6%)
Unemployment rate
(disaggregated by gender and
youth)
28.1%4(2014)
F-31.7 % ; M-24.3%;
Youth 53.7%
20% (2019/20)
F-26%; M-20%; Youth 45%
OU
TC
OM
ES
Outcome 1:
Fiscal
consolidation
enhanced.
Revenue 5N$51.51 billion
(2016/17)
Average growth of 5.7% over 2017/18-
2019/20 MTEF
IMF/
MoF
6Public sector wage bill as a %
of total non-interest
expenditure
49% (2016/17) 45% (2018/19)
Outcome 2:
Strengthening
Public Financial
Management and
Efficiency of
State Owned
Enterprises
Improved Internal and External
Audit and Public Procurement
PEFA7 (2015) PI-26
Scope, nature and
follow-up of External
Audit (D+)
PEFA (2015) PI-21
Effectiveness of
Internal Audit (C)
PEFA (2015) PI-19
Competition, value
for money and
controls in
procurement (D+)
PEFA (2019) PI-30 External Audit (C+)
PEFA (2019) PI-26 Internal Audit (B)
PEFA (2019) PI-24 Procurement (C+)
PEFA
Rate of compliance to SOE
Governance Framework
-
75% (2017/18)
85% (2018/19)
MTEF
Outcome 3
Business
enabling
environment
improved
Private investments as share of
GDP 22% (2015/16) 25.5% (2018/19)
BoN
reports
Number of new MSMEs
created (disaggregated by
gender)
- 300 (2018/19) – At least 30% owned by
females
MITSM
E
Reports
OU
TP
UT
S
Component I: Advancing Fiscal Consolidation
1.1 Revenue
performance
enhanced
Establishment of the Namibia
Revenue Agency (NAMRA)
Inland Revenue
Department (IRD)
and Customs
operating as two
separate entities
(2016)
(i) Submission to Parliament of the
NAMRA Bill (2017)
(ii) NAMRA Board and Commissioner
appointed (2018).
(iii) ITAS rolled out (2018)
IMF/
MoF
1.2 Expenditures
streamlined and
rationalised
Containment of the wage bill Bloated wage bill
(2016)
(i) Research on the size of the public
service wage bill completed and
approved (2018).
(ii) Prime Minister’s circular on freezing of
recruitments issued
IMF/
MoF
Expenditure control public
expenditure efficiency
measures
0 (i) Treasury Instruction 2 of 2018
issued.
% of budget allocated for social
expenditure
32.4% (2015/16)8
35% (2018/19)
2 2016 Preliminary Annual, National Accounts 3 2016 Namibia Household Income and Expenditure Survey 4 Namibia Labor Force Survey 2014 5 2017/18 Budget Statement 6 2017/18 Budget Statement 7 PEFA: Baseline scores are based on the old methodology while the targets are based on the new methodology. As a
result of the change in the PEFA methodology, the old and new scores are not necessarily directly comparable. 8 Source: 2016/17 Mid-Year Budget Review and medium Term Budget Policy Statement
viii
1.3 Debt
management
enhanced
Development of a robust debt
management framework
2005 Debt
Management Strategy
in place (2016)
New Sovereign Debt Management Strategy
approved by Cabinet (2018/19)
MoF achievement of
expected program
objectives.
Mitigation: The
measures being
implemented under
proposed programme
and ongoing technical
assistance being
provided by the EU
and other development
partners will help
strengthen public
financial management
and further mitigate
the identified risks.
Risk #3:
Implementation
capacity risks:
Capacity across
government to
implement the wide
ranging reforms being
pursued by the
government remains a
challenge.
Mitigation: Explore
options to provide
additional technical
assistance. Also work
with development
partners to tap into
available TA resources
to support the PBO.
Ongoing discussions
with the United States
Trade and
Development Agency
(USTDA) for capacity
building of RMCs in
the area of
procurement also
holds some promise.
Risk #4: Social
impact risks: Fiscal
consolidation
measures pose
potential risks to social
sector spending and
basic service delivery,
with negative social
ramifications.
Mitigation: Pursue the
objective of pro-
growth fiscal
consolidation by
preserving capital
expenditure and pro-
poor spending, and
strengthen social
safety nets.
Component II: Strengthening Public Financial Management and Public Sector Efficiency
2.1 Strategic
anchor for PFM
reforms
strengthened
Number of Public Expenditure
Tracking Surveys (PETS)
No PETs carried out
(2015)
2 PETS9 completed in 2018 MoF
Automation of HRMIS HRMIS in place but
not automated
HRMIS automated and integrated into
IFMIS (2019)
MoF
Strengthening of the
institutional independence of
the Auditor General
State Finance Act of
1991 - amended 1995
(2016)
Auditors Bill submitted to Parliament
(2018)
MoF
Improvement of the policy
framework for Internal Audit
No Internal audit
Policy in place
(2016)
New Public Sector Internal Audit Policy
approved by Cabinet in 2018
MoF
2.2 Enhanced
efficiency and
value for money
in public
procurement
Strengthening of the public
procurement function
Public Procurement
Act (2015) enacted in
2015.
(a) Public Procurement Regulations
implemented by setting up: (i)
Procurement Policy Unit (PPU), (ii)
Central Procurement Board and (iii)
Review Panel (2018)
(b) Procurement Plan prepared, and
Standard Bidding Documents for works,
goods and consulting services approved
and adopted (2018).
MoF
2.3 Governance
of SOEs
improved
Enhancement of the policy and
legal framework for Public
Enterprise Governance
Public Enterprises
Governance
Amendment Act of
2015 in place (2016)
Public Enterprises Governance Amendment
Bill submitted to Parliament in 2018
MPE
Reports
Component III. Improving the Business Enabling Environment for Industrialization
3.1 Investment
facilitation
framework and
processes
enhanced
Improvement of the Dispute
resolution mechanism
Inadequate
framework for
dispute resolution
(2015)
(i) Revised Investment Promotion Act,
which provides for a dispute resolution
framework, approved by Cabinet (2018)
Govt
Reports
Modernization of business
registration and licensing
processes
No automated
procedure for
business registration
and licensing (2015)
(i) Phase I of Integrated Client Service
Facility operationalised by MITSME
(2018)
MITSM
E
Reports
Enhancement of the legal and
institutional framework for
PPPs
No legal framework
for PPP in place
(2015)
(i) PPP Committee established (2018)
(ii) PPP Regulation issued and gazetted
(2018)
MoF
Reports
3.2 Industrial
development,
value addition
and
diversification
enhanced
Strengthening of the legal and
institutional framework for
industrial development
Weak framework for
industrial
development (2015)
(i) Industrial Development Agency
established (2018)
MITSM
E
Reports
Promotion of value addition
and development of value
chains for local industries (with
target for women
entrepreneurs)
Growth Strategies
prepared for 10 local
industries and
associated value
chains (2016) 10
Industry Growth Facilitators appointed and
at least 3 Sector Associations to drive the
implementation of the Industry Growth
Strategies launched (2018)
MITSM
E
Reports
3.3 Framework
for MSME
development
improved
Improvement of the policy
framework for MSME
development
1997 Small Business
Development Policy
in place (2015)
Cabinet approval of the new National Policy
on Micro, Small and Medium Enterprises
(2016/2017)
MITSM
E
Reports
Enhancement of the legal
framework to facilitate access
to finance for MSMEs
Lack of access to
finance for MSMEs
(2015)
Micro-lending Bill approved by Cabinet and
submitted to Parliament (2018)
Govt
Reports
Funding: ADB Loan = 3 billion ZAR
9 PETS are surveys that help to establish the extent to which government budgets link to execution and desired service delivery objectives and
beneficiaries. 10 The ten Growth Strategies and associated value chains are Namibia’s Cosmetic Industry, Sea Food, Agribusiness, Metal Fabrication, Handicraft,
Leather Industry, Jewellery Industry and Colored Gemstone, Swakara Wool, Taxidermy Industry. Women constitute high proportion of employees
in these industries.
1
REPORT AND RECOMMENDATION OF THE MANAGEMENT OF THE ADB TO THE
BOARD OF DIRECTORS ON A PROPOSED LOAN FOR THE SECOND PHASE OF THE
REPUBLIC OF NAMIBIA’S ECONOMIC GOVERNANCE AND COMPETITIVENESS
SUPPORT PROGRAM (EGCSP II)
I. INTRODUCTION: THE PROPOSAL
1.1 Management submits the following proposal and recommendation for an ADB Loan of
Three billion South African Rand (3 billion ZAR), equivalent to UA 168.35 million, to the Republic
of Namibia to finance the second phase of the Economic Governance and Competitiveness Support
Program (EGCSP II). The EGCSP is designed as a programmatic series of two consecutive General
Budget Support (GBS) operations covering the fiscal years 2017/18-2018/19, for a total indicative
financing of ZAR 6 billion (UA 336.70 million). This is the second operation in the programmatic series.
1.2 Against the backdrop of a sharp decline in GDP from 6.1% in 2015 to 0.7% in 2016, driven by
declining commodity prices, persistent drought and subdued economic activity in South Africa and
Angola, Namibia recorded a fiscal deficit of 8.3% of GDP, current account deficit of 13.7% of GDP, a
relatively high public debt of 39.8% of GDP and precariously low international reserves of 2.8 months
of import cover. These developments, coupled with deep-rooted structural challenges in the business
environment, limited the scope of industrialization and economic diversification, and increased the
potential for a worsening of the already major challenges of poverty, inequality and unemployment. The
Government quickly took action, by embarking on a wide range of reform measures geared towards
restoring macroeconomic stability and tackling structural bottlenecks. It was against this backdrop that
the Government approached the Bank in 2017 for support. The Bank responded swiftly, and following
extensive consultations with Government and other development partners, designed the EGCSP as a
two-year programmatic operation.
1.3 EGCSP II is carefully designed to build on the policy measures and achievements of EGCSP
I by consolidating the gains already recorded. Following Board approval of the first phase on 10th
May 2017 and disbursement of the resources in June 2017, the Bank maintained constant dialogue with
the Authorities. The dialogue centred on the fiscal consolidation efforts, structural measures to support
public sector efficiency and business environment reforms, with particular emphasis on industrialization.
Many of the measures are designed to build on and help operationalise some of the transformational
policy and legal frameworks passed under Phase I, including the PPP Act, NAMRA Act and the Public
Procurement Regulations. An assessment of program implementation so far shows that it has yielded
immense benefits for Namibia in a number of ways: In the short term, (i) it provided the much needed
liquidity at a time when domestic market liquidity was low occasioned by constrained cash flow; (ii) the
government was able to use the support to retire pending invoices in critical ministries, including
education and health, which helped to avoid an otherwise looming crisis of private credit crunch; (iii) it
helped the government to regain investor confidence that had, hitherto, been eroded. Sovereign bond
issues were oversubscribed after the disbursement of the budget support loan; and (iv) the Rand-
denomination of the loan helped the government to avoid any exchange rate volatilities and exchange
rate risk. In addition, EGCSP helped to push fiscal consolidation measures, resulting in (i) a reduction
of the budget deficit from 8.3% of GDP in 2015/16 to 5.4% in 2017/18;(ii) expenditure as a percentage
of GDP declined from 42.8% to 38.7% over the same period; reserves improved from 2.8 months in
2016 to 4.7 months of import cover by end 2017. The support enabled the government to ring-fence
social spending, increasing it from 47.7% of total expenditure in 2016/17 to 48.6% in 2017/18, despite
drastic measures to reduce spending in the context of fiscal consolidation. In the long term, the reforms
being supported by the program will help lay the foundation for inclusive, sustainable growth and
economic competitiveness and hence, job creation and poverty reduction. These include measures
supporting investment facilitation, SME development, industrialization, and PPP.
2
1.4 The operation will complement the other Bank Group funded operations in Namibia, in
particular the three infrastructure investment projects also approved in 2017. These are (i) the
Transport Infrastructure Improvement Project (ZAR 2 billion); Agricultural Mechanization and Seed
Improvement Project (ZAR 1 billion); and Education and Training Quality Improvement Project (ZAR
1 billion). The combined potential positive impact of these projects in terms of enhancing economic
competitiveness and creating the basis for long term growth and job creation, coupled with the
macroeconomic stabilization, public sector efficiency and industrialization focus of EGCSP, is to unlock
the full development potential of Namibia in the long term. The potential development impact is
therefore phenomenal.
1.5 The operation was designed in close consultation and sustained dialogue with Development
partners and the Namibian Authorities. In this dialogue, the Government showed its strong
determination to accelerate and deepen ongoing reforms supported under the program. The combined
reform measures of EGCSP I and II are carefully selected to ensure proper sequencing of reforms and to
build on the achievements of EGCSP I by consolidating the gains already recorded. Collaboration with
other Development Partners will be intensified during the implementation phase of EGCSP II to harness
their respective competencies and synergies.
II. UPDATE ON COUNTRY ELIGIBILITY
2.1 Country’s continued commitment to poverty reduction
2.1.1 Namibia continues to implement a number of policies and strategies aimed at promoting
inclusive growth and social progress. These include Vision 2030 – the country’s overarching
development strategy; and the HARAMBEE Prosperity Plan (2016-2020). The government is on track
with the implementation of the Fifth National Development Plan (NDP5 2017/18 – 2021/22)11, which
focuses on structural transformation and modernization. In 2017, the government published a Blueprint
on Wealth Distribution and Poverty Eradication and its Implementation Plan, which articulate measures
aimed at advancing strategies for eradication of poverty and reducing income inequality. The
Government continues to strengthen social safety nets both in quality and coverage. Notable initiatives
include: (i) the universal social grant for the elderly and persons living with disabilities; (ii) child welfare
grant; and (iii) the food bank initiative, targeting the poorest of the poor. Despite the ongoing fiscal
consolidation, annual budgetary allocations to education, health and social sectors have been ring-
fenced. As a result of these initiatives, Namibia has registered a reduction in inequality in recent years,
albeit at a slow pace. Appendix V outlines measures to enhance inclusion in the context of fiscal
consolidation.
2.2 Continued political stability
2.2.1 Namibia is a constitutional multiparty democracy where free and fair elections are held
regularly. The South West Africa People’s Organization (SWAPO) has dominated politics since
independence from South Africa in 1990. In March 2015, H.E. Hage Geingob was elected President of
Namibia, under the ticket of SWAPO, and has since implemented robust macroeconomic policies and
new regulations on domestic investment to offer some growth opportunities in infrastructure
development.
11 NDP 5 has 4 key goals: (i) Achieve inclusive, sustainable and equitable economic growth; (ii) Build capable and healthy
human resources; (iii) Ensure sustainable environment and enhance resilience; and (iv) Promote good governance through
effective institutions.
3
2.2.2 The country’s governance record continues to improve, with Namibia consistently ranking
among the top sub-Saharan African countries on good governance. Its score of 71.2/100 (4 point
improvement over the 5-year trend 2012-2016) on the 2017 Ibrahim Index of African Governance ranked
Namibia 5th out of the 52 African countries surveyed. In 2015, the immediate former Namibian President
of Namibia H.E. Hifikepunye Pohamba was awarded the Ibrahim Prize for African Leadership. This was
in recognition of his role in forging national cohesion and reconciliation as well as key achievements in
gender equality, literacy and investments in health. The 2017 Corruption Perception Index of
Transparency International ranked Namibia 53rd out of 175 countries globally, and fifth on the African
continent with a score of 51 out of 100. The amendment of the Constitution in 2010 to incorporate anti-
corruption measures, the adoption of the new public procurement law, and the establishment of an
independent oversight body, have all helped strengthen the legal and regulatory framework to prevent
and combat corruption. Namibia remains the country with the freest press in Africa, based on the analysis
of Reporters without Borders. The country’s score on the index of economic freedom improved from
61.9 in 2016 to 62.5 in 2017, positioning it 5th in Africa. 2.3 Macroeconomic and fiscal analysis12
2.3.1 Namibia experienced a difficult year in 2017 with the economy recording negative growth
estimated at -0.8% from growth of 0.7% in 2016. This slowdown was mainly attributed to persistent
external shocks, including relatively weak global growth, falling commodity prices, especially uranium
prices, poor growth performance in neighbouring countries including South Africa and Angola, and
sharp reduction in SACU revenues. The sharp fiscal consolidation measures, which affected many
productive sectors of the economy and the slowdown in construction activities also contributed to the
slow growth. The Government also faced large liquidity and financing challenges during the first half of
2017. As a result, significant amount of arrears (estimated at 2.5% of GDP), were recognised as part of
expenditures in the 2017/18 mid-year budget review and were subsequently cleared. The arrears problem
was among factors that led to the credit ratings downgrade by Moody’s and Fitch in the second half of
2017. Thanks to the EGCSP I resources, Government was able to clear them, hence improving the overall
macroeconomic situation. Growth has bottomed out with a mild recovery expected in 2018.
2.3.2 At the sectoral level, agriculture and tourism performed relatively well in 2017 but
slowdown in manufacturing and stagnation in mining and construction slackened the pace of
growth. Primary industry recorded improved performance in 2017, contributing 19.1% to GDP,
compared to 18.1% in 2016. Secondary industry however recorded a fall in its contribution to GDP in
2017, standing at 16.3% compared to 17.3% in 2016. Tertiary industries recorded a marginal increase of
58.4% in 2017 up from 58.1% in 2016. As shown in the Figure 1 below, the mining sector has stagnated
since 2015, while construction has declined over the same period. Agriculture on the other hand has
recorded a recovery.
12 The analysis in this section is based on Authorities’ estimates and projections. These may differ from IMF’s estimates largely because of differences in
the classification of spending arrears as well as coverage of public investment projects.
4
Figure 1: Sectoral Contribution to GDP in Namibia (2015-2017)
Source: Namibia Statistics Agency
2.3.3 Fiscal policy stance remains contractionary, aimed at further consolidating non-core
spending and aligning resources to core national priorities. Revenues increased from 31.0% of GDP
in FY2016/17 to 33.1% of GDP in FY2017/18, but are projected to decline to 30.7% and 28.8% of GDP
in FY2018/19 and FY2019/20 respectively13. Improvement in revenue in FY2017/18 is attributed to
better SACU receipts, contributing 36.0% to total revenues. Namibia’s share of SACU revenue pool
increased to N$19.6 billion in FY2017/18, from N$14.8 billion in FY2016/17. The projected decline in
revenues in 2018/19 is explained mainly by the projected decline in SACU revenues and a slowdown in
diamond corporate tax and related income. Total expenditure (including interest payments), on the other
hand, declined from 42.8% in FY2015/16 to 37.9% and 38.4% in FY2016/17 and FY2017/18
respectively, mainly attributed to austerity measures instituted by the government since 2016.
Expenditures are projected to decline further to 35.2% and 32.7% of GDP in FY2018/19 and FY2019/20
respectively. While primary deficit reduced from 4.3% of GDP in FY2016/17 to 2.5% in FY2017/18,
interest payments stood at 2.6% and 2.9% in the respective years, pushing the overall budget deficit to
6.9% and 5.4% of GDP over the same period. The budget deficit has, however, steadily declined from
8.3% in FY2015/16 to 5.4% in 2017/18 as a result of fiscal consolidation measures.
2.3.4 Due to adverse impact of the sharp fiscal consolidation program adopted since 2016, the
government plans to slow down austerity measures to boost growth and employment while
maintaining fiscal consolidation stance. The Government’s commitment to fiscal consolidation, as
reiterated in the 2016/17 mid-year budget review, focused on bringing the economy back to a sustainable
fiscal path by cutting non-priority spending of up to 2.3% of GDP, while rebalancing and realigning
spending plans in line with revenue streams. Overall preliminary budget execution rate for FY 2017/18
is estimated at 99.4%, with the development budget execution estimated at 96%, compared to the average
of 94% over the past three years. To date, non-core operational spending has been reduced by about 73%
since FY2015/16, which allowed for redirecting resources to productive expenditure and the
development budget. On the revenue side, the Department of Inland Revenue slightly exceeded the set
tax revenue target of N$ 33.5 billion by roughly 2%. The scaling-up of the programme on targeted
13 Estimates of Income and Expenditure, 1st April 2018 to 31st March 2021, Namibian Ministry of Finance.
-1
1
3
5
7
9
11
13
15
2015 2016 2017
per
cen
t
sectoral contribution to GDP (%)
Agriculture and forestry Mining and quarrying Manufacturing Construction
5
recovery of tax arrears for different categories of tax and non-tax revenues helped realize fiscal savings
estimated at N$ 1.3 billion. The government had expected to achieve a positive growth alongside an
aggressive fiscal consolidation program. However, the pace of consolidation turned out to be too fast,
leading to adverse effects on growth and employment. Unemployment increased from 28% in 2014 to
34.0% in 201614. Despite the ongoing fiscal consolidation program, social sector spending has been ring-
fenced, resulting in an increase from 47.7% of total expenditure in FY 2016/17 to 48.6% in FY 2017/18,
and is budgeted to increase further to 49.2% in FY 2018/19. Fiscal consolidation helped reduce the
budget deficit by a cumulative 3% or 1½ percentage points annually from 8.2% in FY2015/16 to an
estimated 5.4% by FY2017/18. Budget expenditure as a proportion of GDP, on the other hand, has
reduced from 42.8% in FY2015/16 to an estimated 38.4% in FY2017/18, and is expected to further
decline to 35.2% in FY 2018/19. Government remains fully committed to pro-growth fiscal
consolidation and has opted to spread it over a longer period to minimise any potential negative impacts.
2.3.5 In the 2018/19 budget, the government proposed several measures to support fiscal
consolidation and improve public sector efficiency. These measures include the implementation of
key tax administration reforms through the roll-out of the Integrated Tax System (ITAS), recovery of
tax arrears, tax enhancing policy measures and establishment of the Namibia Revenue Agency
(NAMRA), following enactment of the NAMRA Bill in 2017. On the expenditure side, the government
has announced measures to improve spending efficiency and rationalize non-productive expenditure,
including containing public sector wage bill, which stands at 50% of total revenue and 16% of GDP.
2.3.6 Higher-than-expected budget deficit of 5.4% in 2017 increased financing needs leading to
enhanced debt accumulation. Given the adverse impacts on growth and employment, the government
prefers to slow down austerity to boost growth but maintain a consolidation stance. Total public debt as
a percentage of GDP is expected to increase marginally from 42.6% in 2016/17 to 43.3% and 45.8% in
2018 and 2019 respectively. Debt service as a percentage of revenues has steadily increased from 5.0%
in the 2015/16 fiscal year to 8.6% and 8.8% of revenues in the 2016/17 and 2017/18 respectively.
Contingent liabilities as a percent of GDP stood at 7.5%. IMF’s debt sustainability assessment (DSA),
released in February 2018, projects that, if SACU revenues decline, fiscal deficit and gross financing
needs will remain large at 4% and 23% of GDP respectively by FY21/22. The assessment suggests that
rising fiscal deficit and financing needs are expected to drive public debt to 69.7% of GDP by FY22/23,
and towards the DSA risk threshold of 70%, exposing Namibia to macroeconomic and contingent
liability shocks, with rollover and exchange rate risks compounding the risk assessment. However, the
materialization of these risks is unlikely, given the recovery in SACU revenues, higher commodity prices
and improved export revenues, declining fiscal deficit, increased liquidity in the market and sustained
fiscal consolidation stance.
2.3.7 Monetary policy has remained largely accommodative in line with Namibia’s membership
of the Common Monetary Area (CMA). The Repo Rate has been maintained at 6.75% since July 2017
after a reduction by 0.25 basis points. This is aimed at supporting domestic demand and the policy parity
and currency peg with the South African Rand, amidst relatively low and falling inflation levels. Inflation
has fallen from 6.7% in 2016 to 6.2% in 2017, and 3.6% by January 2018, amidst weak domestic demand
and a stronger currency, and is projected to stand at 3.5% in 2018 and 4.5% in 2019. Private sector credit
recorded a slight growth from 4.5% in 2017 to 5.7% in 2018. Asset quality has deteriorated with non-
performing loans (NPL) increasing from 1.5% in 2016 to 2.5% in 2018, posing risks to credit growth.
Increased NPLs will discourage lenders from offering more private sector credit and therefore requires
attention.
14 Namibia Labor force Survey 2016 Report
6
2.3.8 The external balance has shown some improvement since 2016, with narrowing current
account deficit and increased international reserves. The merchandise trade deficit has reduced by
51.6% from N$17.6 billion, during the second half of 2016, to N$8.5 billion during the second half of
2017, thanks to increased exports. Similarly, the current account deficit has narrowed to 3.4% of GDP
in 2017 from 13.8% in 2016, and international reserves have firmed up to 4.7 months of import cover
by the end of 2017, compared to 2.8% in 2016.
2.3.9 After a difficult year 2017, medium term growth outlook is positive supported by recovery
in the agriculture and tourism sectors. Real GDP growth is projected to rebound to positive territory
of 1.1% in 2018 before accelerating further to 2.8% in 2019, up from a decline of -0.8% in 2017. The
recent pick-up in commodity prices is expected to improve export and SACU revenues. The annual price
indices of metals and minerals (2010=100, real 2010 US dollars) increased from 66.96 in 2016 to 80.38
in 2017. In the long term, it will be necessary to establish a framework to build fiscal buffers to ameliorate
the impact of future declines in SACU revenues and possible exogenous shocks.
Table 1 – Macroeconomic Development
2016 2017(e) 2018(p) 2019(p)
Real GDP growth 0.7 -0.8 1.1 2.8
Real GDP per capita growth -1.5 -2.9 -1.0 0.7
CPI inflation 6.7 6.2 5.7 5.6
Budget balance % GDP15 -8.3 -5.4 -4.5 -4.0
Current account % GDP16 -13.8 -3.4 -2.6 -3.9
Source: Data from Namibian authorities; estimates (e) and prediction (p) based on authors' calculations.
2.4 Fiduciary risk assessment
2.4.1 The 2015 Public Expenditure and Financial Accountability (PEFA) Assessment for
Namibia indicated progress in the implementation of PFM reforms. The adoption of medium-term
expenditure framework (MTEF), medium-term plans (MTP) and programme budgeting, among others,
has contributed significantly to progress made by the country in PFM reforms. The PEFA, however, also
noted considerable delays in finalising and promulgating key PFM laws, such as the Public Finance
Management Bill. As part of the preparation of the EGCSP II, the Bank updated the Country Fiduciary
Risk Assessment (CFRA) for Namibia in May 2018. The CFRA shows that Namibia has continued to
make progress in implementation of PFM reforms in areas such as cash and debt management, and
financial reporting. GRN is committed to enacting the new PFM Law and Audit Law. GRN is also
revising the Chart of Accounts in line with international guidelines. Significant progress has also been
made in procurement reforms. The three structures required by the new Procurement Act have all been
set up and are fully operational. They are (i) Central Procurement Board; (ii) Review Panel and (iii)
Procurement Policy Unit. However, a number of challenges were identified, including delays in
finalizing relevant legal and regulatory frameworks, implementation of the Integrated Financial
Management Information System (IFMIS), development of systems linkages such as human resources
and Treasury to boost internal control, and implementation of audit recommendations. Lack of capacity
in key institutions also continues to pose a challenge but GRN is making an effort to address it. Taking
15 Based on calendar year 16 Based on fiscal year
7
into account the progress made since 2017 and the risk mitigation factors, overall residual risk level is
deemed moderate. This allows the Bank to maintain an approach based primarily on the use of country
systems, while continuing its support, where required, for the system’s reform aimed at further
improvement. Technical Annex I presents the detailed CFRA.
2.5 Harmonization
2.5.1 Bilateral development assistance to Namibia has declined significantly following its
classification as an upper MIC. Since the opening of the Bank’s Southern Africa Regional
Development and Business Delivery Office (RDGS) in January 2012, the Bank has scaled up its
operations in Namibia from UA 120 million in 2011 to UA 854 million in 2018. Similarly, country
dialogue and partner coordination has been significantly enhanced, particularly since the commencement
of engagements within the context of the Economic Governance and Competitiveness Support
Programme (EGCSP). The design of EGCSP benefitted from wide ranging consultations with
Development Partners in Namibia and the engagement has continued throughout the implementation
phase of EGCSP I. Bank’s assistance to Namibia focuses on the High 5s, particularly Integrate Africa
(34%), Industrialize Africa (31%), Improve the quality of life for the people of Africa (28%), and Feed
Africa (7%). Key development partners in the country include the European Union (EU), Germany, the
United Nations (UN), United States of America (USA), Turkey, Japan, Finland, Spain and China.
2.5.2 As a MIC, aid-related partnerships are limited. However, aid coordination has been
improving since the establishment of the Annual High- level Development Partner Forum (DPF) in
December 2016, which is co-chaired by the National Planning Commission and the Head of the United
Nations agencies. The Forum has encouraged development partners to align their assistance programs
with the Government priorities identified in NDP5, in accordance with the Paris Declaration. At the
sector level, sectoral working groups meet regularly. However, their decisions do not usually feed into
the High- level Forum. The mechanism for bringing all the development partners together, and sharing
information about their activities, is being strengthened through regular meetings under the general
coordination of the UN Resident Coordinator. The Government, through the National Planning
Commission, has gradually taken steps to increase ownership and leadership in coordinating DPs
activities in the country, including enforcement of monitoring and impact evaluation mechanisms
supported by an electronic platform. The Development Partner Dialogue (DPD) was also established in
May 2017 to serve as a platform for harmonizing donor support, policy dialogue and information sharing.
The Bank, through RDGS, will enhance collaboration with other development partners, including
through participation in half-yearly DPD.
III. YEAR 2018 PROGRAM
3.1 Program Goal and Purpose
3.1.1 The goal of EGCSP II is to continue support for the implementation of the government’s
medium-term development agenda aimed at building a strong foundation for inclusive and sustainable
economic growth, while leveraging the achievements of EGCSP I. Consistent with this goal, EGCSP II
aims specifically to: (i) Advance fiscal consolidation through improved revenue collection, and
enhanced efficiency in public spending; (ii) Strengthen public financial management and public sector
efficiency, by improving the public procurement, internal and external audit functions and the
governance framework for SOEs; and (iii) Improve the business environment through enhancement of
the investment facilitation framework, and improving the framework for industrial and MSME
development.
8
3.2 Program Components
3.2.1 EGCSP II maintains the same three components of EGCSP I, but the specific policy
measures are carefully selected to sequentially build on the achievements of EGCSP I. The package
of reforms under the three components are therefore mutually reinforcing. Component 1, focusing on
advancing fiscal consolidation, will enhance macroeconomic performance, and create fiscal space for
the prioritization of capital and social spending. Measures proposed under component 2, focusing on
strengthening PFM and public sector efficiency, will reinforce support for attainment of the fiscal
consolidation objective by improving the management of public finances, improving the efficiency of
SOEs, and reducing subsidies and transfers to commercial SOEs. Measures under component 3 are
geared towards improving the business environment to support industrialization, spur growth and job
creation. Their implementation will reinforce the fiscal consolidation measures through increased tax
revenue expected to be generated from a more vibrant private sector.
Component 1: Advancing Fiscal Consolidation
3.2.2 EGCSP I supported the deepening of fiscal consolidation, anchored to a credible medium-
term plan. The carefully selected package of reform measures supported include: (i) The approval by
Cabinet of a comprehensive set of measures proposed by the Prime Minister’s Office to contain the wage
bill, which helped to improve expenditure efficiency and limit the fiscal burden of personnel emolument
on the budget; (ii) Approval by Cabinet, and submission to Parliament, of the Bill for the Establishment
of the Namibia Revenue Agency (NAMRA), which seeks to merge the Inland Revenue Department and
Customs; (iii) Approval by Cabinet, and submission to Parliament, of the Macro-Fiscal Framework for
the FY 2017/18 Budget; and (iv) an increase in the size of the social expenditure budget. Cumulatively,
these policy actions helped to strengthen fiscal consolidation.
3.2.3 EGCSP-II will build on the above gains, by supporting further actions to reinforce fiscal
consolidation. These are: (i) the completion of a study on the size of the public service wage bill
(Trigger); (ii) the appointment of the Board of NAMRA (following enactment of the NAMRA Bill in
2017) and initiating the process of recruiting commissioners (Trigger); (iii) the launch of an Integrated
Tax Administrative System; and (iv) approval of a new Sovereign Debt Management Strategy (Trigger),
which lays down polices to elongate the maturity of debts, diversify sources of financing of the budget
deficit, and issue new instruments to mobilize additional resources. Government is also pursuing a
number of additional revenue enhancing measures (such as the phasing out of preferential tax treatment
to certain manufacturers, introduction of 10% dividend tax and readjustment of the tax brackets) and
expenditure-based measures (such as cutting non-core expenditure to a minimum).These measures,
which are in line with the pro-growth fiscal consolidation path, will help to restore macroeconomic
stability and further reinforce debt sustainability in the medium term. Furthermore, Administrative
Directive was issued by the Office of the Prime Minister providing policy measures and procedures
aimed at controlling expenditure and enhancing efficiency in the management of public resources.
Treasury Instruction 2 of 2018 and financial directives were also issued with the aim to enhance
expenditure control and accountability for statutory funds transfer to sub-national and extra-budgetary
bodies, and State Owned Enterprises.
Component 2: Strengthening Public Financial Management and Public Sector Efficiency
3.2.4 EGCSP I supported a wide range of measures aimed at strengthening public financial
management and public sector efficiency. These include: (i) the issuance of the Regulations for the
Public Procurement Act (2015) and its Publication in the official Government Gazette; (ii) Cabinet
approval of the hybrid governance model for Public Enterprises which provides for separating the State
Owned Enterprises into 3 clusters (commercial, financial and non-commercial/social); and (iii) the
completion of 2 public expenditure tracking surveys (PETS).
9
3.2.5 EGCSP II will build on the above gains, by supporting further actions to reinforce public
financial management and public sector efficiency. These include: (i) Cabinet approval, and
submission to Parliament, of the Public Financial Management Bill; (ii) Cabinet approval of the new
Public Sector Internal Audit Policy, which aims to provide a coherent framework for the internal audit
functions across government; and (iii) the implementation of the Regulations for the Public Procurement
Act (2015) by: (1) Setting up (a) the Procurement Policy Unit in accordance with Part 2 Art 6 (1) of the
Act; (b) the Central Procurement Board of Namibia in accordance with part 3 Art 8 (1) of the Act; and
(c) the Review Panel in accordance with Part 7 Art 58 (1) of the Act; (2) approval and adoption of public
procurement guideline, and preparation of annual procurement plans, and (3) approval and adoption of
Standard Bidding Documents for works, goods and services (Trigger); and (iv) Cabinet approval, and
submission to Parliament, of the Public Enterprises Governance Amendment Bill (Trigger). Additional
measures are also being taken such as the targeting of transfers to public enterprises at specific productive
expenditure programs.
Component 3: Improving the Business Environment for Industrialization
3.2.6 EGCSP I supported a number of critical measures to improve the business environment
and lay a solid foundation for industrialization. These include: (i) Approval by Cabinet, and
Submission to Parliament, of the Investment Promotion Bill, which among others, provides for a dispute
resolution mechanism; (ii) Approval by Cabinet, and Submission to Parliament, of the Business and
Intellectual Property Authority (BIPA) Bill, which among others, provides for online business
registration and licensing; (iii) Regulations for the BIPA Act issued and published in the official gazette;
(iv) Cabinet Approval, and Submission to Parliament, of the Public Private Partnerships (PPP) Bill; (v)
Cabinet Approval, and Submission to Parliament, of the Industrial Development Agency Bill; and (vi)
Approval by Cabinet of a National Policy on Micro, Small and Medium Enterprises, which provides a
strong basis for addressing the challenges of MSMEs. These measures have helped to modernize and
strengthen the investment facilitation regime, and lay the foundation for robust SME and industrial
development, value addition and economic diversification.
3.2.7 EGCSP II will build on the above gains, by supporting a range of policy measures for
business climate improvements, particularly those relating to the industrialization agenda. These
are: (i) Operationalization of an Integrated Client Service Facility, providing online business registration
capability (currently limited to name recognition); (ii) Establishment of a PPP Committee, as provided
for by the PPP Act, and approval of the PPP Regulations (Trigger); (iii) Appointment of Industry Growth
Facilitators and operationalization of Sector Associations to drive the implementation of the Growth
Strategies for 10 industries (Trigger); (iv) Approval of an SME Funding Strategy; and (v) Approval by
Cabinet, and submission to Parliament, of a Micro-lending Bill (Trigger), to address the challenge of
lack of access to finance for SMEs. Additional measures being pursued by Government include the
introduction of support instruments for SMEs and start-ups, and replacement of the Export Processing
Zone Act with the Special Economic Zones Act.
10
3.3 Program Outputs and Expected Results
3.3.1 The table below presents progress achieved on the program outputs and expected results.
Table 2 (a): Progress on Targets from the Results-Based Logical Framework
Output Achievements
Component 1: Advancing Fiscal Consolidation
Establishment of the Namibia Revene Agency
(NAMRA)
The process to appoint the NAMRA Board is at an advanced stage. The appointment of commissioners will be done
once the Board is in place.
Containment of the wage bill The Government has carried out a review and the Prime Minister’s office has issued a circular freezing the
recruitment. Offices, Ministries and Agencies (OMAs) that recruit for a certain position must give up an equivalent
position. In addition, the payroll audits are ongoing. The audits started in the Ministry of Education.
% of budget allocated to social expenditure Social spending has increased from 47.7% of total expenditure in 2016/17 fiscal year to 48.6% in 2017/18 and is
budgeted to increase further to 49.2% in 2018/19 period.
Approval of macro-fiscal framework In 2017, Cabinet approved the fiscal strategy, proposed policy measures, and the fiscal policy stance for the 2017/18
– 2019/20 MTEF.
Development of robust debt management
framework
Debt Management Strategy is complete and has been submitted to Cabinet.
Component 2: Strengthening Public Financial management and Public Sector Efficiency
Number of public expenditure tracking surveys 2 Public expenditure tracking surveys were completed in 2016/17 and an additional 2 in 2017/18.
Strengthening the institutional independence of
the Auditor General
Promulgation of the Public Audit Act has faced significant delays. Consultations are still ongoing.
Improvement of the policy framework for
Internal Audit
The Public Sector Internal Audit Policy was approved by Cabinet on 11th June 2018. This will strengthen the Internal
Audit function across Government and standardize Internal Audit Activities. Treasury instructions and financia l
directives were issued with the aim to improve expenditure control and efficiency in public spending (for example,
Administrative Directive 1/2017 issued by the Office of the Prime Minister). Treasury Instruction 2 of 2018 was
issued with the aim to enhance accountability for statutory funds transfer to sub-national and extra-budgetary bodies,
and State Owned Enterprises.
Strengthening of the public procurement
function
Following passage of the Public Procurement Act 2015 and issuance of the related Regulations, the Government has
set up the Procurement Policy Unit, the Central Procurement Board and the Review Panel. Government has appointed
staff to these entities and there are ongoing recruitment processes to enhance internal capacity to enable them t o
effectively carry out their mandates. The Government has also approved the National Anti-Corruption Strategy and
Action Plan 2016-2019.
Component 3: Improving the Business Enabling Environment for Industrialization
Improvement of the dispute resolution
mechanism
The Investment promotion Act, which amongst others, provides the framework for dispute resolution, was enacted
in 2016 but was subsequently withdrawn following concerns expressed by the business community about inadequate
consultations before tabling by Parliament. The Government is working on amendments to the Investment Promotion
Act to address concerns raised by the business community. Wide-ranging consultations with the private sector and
other stakeholders have been concluded. The revised Act is expected to be submitted to Cabinet and subsequently
tabled for Parliament’s consideration during the third quarter of 2018.
Modernization of business registration and
licensing processes Work on the establishment of an integrated Client Service Facility to support the online platform for business
registration and licensing is making steady progress. Phase 1 has been completed and work on Phase II, expected to
take 18 months, will commence soon. This will entail linking up various components of the system and rolling out
the online platform to facilitate business registration and licensing, issuance of construction permits, filing tax claims,
among others. It will also facilitate the provision of online business advisory services.
Enhancement of the legal and institutional
framework for PPPs
PPP Act was gazetted in July 2017 and positions for members of the PPP Committee have been advertised, CVs
evaluated, interviews conducted and recommendations for appointments will be presented to Cabinet Committee on
Overall Priority for endorsement in June 2018. The PPP Regulations have also been drafted and are expected to be
finalised in June 2018.
Strengthening of the legal and institutional
framework for industrial development
The Industrial Development Agency Bill was approved by Parliament and the necessary measures are being taken to
operationalise the Agency during the course of 2018. This will entail a merger of the Namibia Offshore Development
Company and the Namibia Development Corporation. Work on asset verification and valuation, and auditing of
financial statements are at an advanced stage, and the Board is expected to be appointed during Quarter 2 of 2018.
Promotion of value addition and development
of value chains for local industries
Following the preparation of Growth Strategies for 10 local industries and associated value chains in 2016, GRN
appointed Industry Growth Facilitators and 3 sector associations for the 10 Growth Strategies have been launched
and are fully functional. These will drive the implementation of the Growth Strategies.
Improvement of the policy framework for
MSME development
Ministry of Industrialization, Trade and SME Development is working on measures to streamline the numerous
interventions by different Ministries and Agencies working on MSME development, as prescribed in the SME Policy.
Work on revitalization of the Industrial Upgrading and Modernization Program is in progress and options to support
MSMEs through linkage programs are being considered.
Enhancement of the legal framework to
facilitate access to finance for MSMEs
The Micro-lending Bill has been passed by Parliament is 2017. In addition, the Minister of Finance announced in the
2018/19 Budget Speech announced support to SME development through a range of interventions, including SME
Financing Strategy, which was approved in June 2018.
11
Table 2 (b): Progress towards achievement of Outcome and Impact Indicators
Indicator Target Current status Comments
Impact Indicators
Real GDP
growth
3.3% (2019/20) -0.8% (2017) Growth was slackened by the sharp pace of fiscal consolidation, recording a contraction
of -0.8% in 2017. The government has proposed to slow down austerity while maintaining
fiscal consolidation stance by focusing on pro-growth spending and cutting down non-
priority expenditures. Despite these cuts, the Development budget was increased by 30%
in the 2018 budget relative to the revised allocation for the previous year.
Poverty rate
12% (2019/20)
(M-4%; F-6%)
18% (2015/16) No new survey has been done after phase I of the ECGSP. Therefore, the same poverty
figures still apply. However, numerous interventions targeting poverty eradication are
being implemented, including measures to strengthen and expand the coverage of social
safety nets, notably the food bank targeting the poorest of the poor.
Unemployment
rate
20% (2019/20)
F-26%; M-20%;
Youth-45%
- Unemployment increased as a result of contraction in construction and growth in 2017.
The last survey was finalized before the approval and disbursement of EGCSP I. No new
survey has been done after the EGCSP I. Hence, at this stage, it is difficult to measure the
impact of EGCSP I on employment. However, the various interventions targeting
investment facilitation, SME development and industrialization are likely to have a
positive impact on employment. An assessment will be done during preparation of the
Program Completion Report (PCR) at the end of the second Phase of the programmatic
series, as required by the PBO Guidelines.
Outcome Indicators Outcome 1: Fiscal consolidation enhanced
Revenue
performance
Average revenue
growth of 5.7% over
2017/18 – 2019/20
MTEF
13.3%
(2017/18)17
Tax revenue outturn for FY 2017/18 is estimated to have increased by 14.1% from N$47.6
billion recorded in FY2016/17 to N$51.2 billion. The increase in tax revenue is attributed
to an increase in tax on international trade and transaction (SACU) receipt and Tax Arrears
Recovery programme undertaken during the period under review.
Public sector
wage bill as a %
of total non-
interest
expenditure
45% (2018/19) 48.5% (2018) Containing wage bill remains one of the main challenges to fiscal consolidation. A raft of
measures have been put in place recently to deal with the problem. Payroll audits started
at the Ministry of education and are ongoing. Further, the Prime Minister has issued a
circular freezing new recruitments. Offices, Ministries and Agencies(OMAs) that recruit
must give up an equivalent position
Outcome 2: Strengthening public financial management and efficiency of state owned enterprises
Improved
internal and
external audit
and public
procurement
PEFA (2019) PI-30
External audit (C+)
PEFA (2019) PI-26
Internal audit (B)
PEFA (2019) PI-24
Procurement (C+)
No new PEFA
was conducted
during 2017/18
External Audit coverage of Central Government reached 100% and 90% for local
government and SOEs, respectively. Office of the Auditor General conducted six (6)
performance audits on annual basis. 2016/2017 Consolidated financial reports audit has
been completed on time while the 2017/2018 consolidated financial reports were under
preparation.
Internal audit committees have been established, and new audit standards adopted in
line with international internal audit standards and best practice. New public sector
audit policy and new internal audit structure are being considered.
Remarkable progress has been made in the operationalization of the Public
Procurement Act 2015 through setting up of a procurement policy unit, a central
procurement board, and a review panel. Procurement guidelines, procurement planning
template and capacity building program have been developed to enhance transparency,
efficiency and implementation capacity.
Rate of
compliance to
SOE governance
framework
75% (2017/18)
85% (2018/19)
N/A These have not yet been assessed. The results will be reflected in the PCR at the end of
Phase II.
Outcome 3: Business enabling environment improved
Private
investment as a
share of GDP
25.5% (2018/19) 15.5% At the time of appraising EGCSP 1, the baseline of 22% for 2015/16 was a projection.
The most recent IMF Article IV report has set the 2016 Actual at 15.1%. Compared to
new projections of 15.5% for 2017 and 16% for 2018, the indicator appears to be showing
an upward trend.
Number of new
MSMEs created
300 (2018/19) – 30%
female
- This figure is not available. It will be assessed as part of the PCR following completion
of Phase II. However, it should be noted that the Ministry of Industrialization, Trade and
SME Development is working on measures to streamline the numerous MSME-related
interventions by different Ministries and Agencies, as prescribed in the SME Policy. The
Minister of Finance has announced that support instruments for SMEs and start-ups will
be introduced and developed over the MTEF. These include the roll-out of SME financing
strategy, and youth entrepreneurship program, comprising a venture capital fund, credit
guarantee scheme and training and mentorship program. All these are in addition to the
funding for the Equipment Aid Scheme and other SME support programs.
17 Fiscal Strategy for Medium Term Expenditure Framework 2018/19 to 2020/21
12
3.4 Progress on Triggers Outlined in the Previous Operation EGCSP I
3.4.1 The Bank’s appraisal team undertook an assessment of the progress made by the Namibian
authorities towards fulfilment of the agreed triggers, which now become the prior actions for EGCSP II.
There has been considerable progress on the set of EGCSP I triggers (now prior actions for EGCSP II)
outlined in the original PAR approved by the Board in May 2017.
Progress on triggers for Component 1 of EGCSP II are summarized below:
3.4.2 Appointment of Board and Commissioners of NAMRA: The recruitment process for the
appointment of members of the Board of the Namibia Revenue Agency (NAMRA) is ongoing with the
advertisement of the positions already done. Once finalised, Cabinet will be consulted before
appointment. Once the Board is in place, it will be mandated to appoint the Commissioners.
3.4.3 Completion of the research on the size of the public service wage bill: Based on an assessment
conducted by the Government, a range of measures have been put in place to promote efficiency in
offices, ministries and agencies, including those targeting containment of the wage bill. The Prime
Minister has hence issued directives to this effect on 1st February 2018. As announced by the Minister
of Finance during the recent Budget Speech, Government targets a reduction in the wage bill from the
current 16% of GDP to about 12% of GDP over the next five years through a combination of natural
attrition, lower-than-CPI wage adjustments and vacancy replacement rule. Implementation of these
measures will contribute immensely to the fiscal consolidation effort.
3.4.4 Approval by cabinet and publication of the new sovereign debt strategy: The draft Debt
Management Strategy has been completed and submitted to Cabinet for approval, expected before end
June 2018. Government’s intention is to stabilise the growth of Government debt at 46.5% of GDP over
the MTEF period through a gradual reduction in the budget deficit and debt amortization program.
Progress on triggers for Component 2 of EGCSP II are summarized below:
3.4.5 (i) Setting up (a) the Procurement Policy Unit (PPU), (b) the Central Procurement Board; and
(c) the Review Panel; and (ii) Preparation of annual Procurement Plans, and approval and adoption of
Standard Bidding Documents for works, goods and services: Consistent with the Public Procurement
Act, the three main entities (the Procurement Policy Unit, the Central Procurement Board and the Review
Panel) have been operational as of April 1, 2017. Government has appointed staff to these entities and
there are ongoing recruitment processes to enhance internal capacity to carry out their mandates. The
Procurement Policy Unit issued Public Procurement Guidelines together with a template and instructions
informing public entities of the need to prepare and submit procurement plans to the PPU as well as to
publish said procurement plans on the public entities’ websites. It was reported that approximately 10%
of procurement plans had been filed with the PPU. With regard to the Standard Bidding Documents
(SBD), twenty-three (23) have been approved and adopted; they are currently available on the PPU’s
drop box link and the Ministry of Finance’s web-site.
3.4.6 Submission to Parliament of the Public Enterprises Governance Amendment Bill: The Public
Enterprises Governance Amendment Bill has already been cleared by the Cabinet Committee on
Legislation and full Cabinet. It has been resubmitted to the Cabinet Committee on Legislation to consider
changes made by the legal drafter. Submission to Parliament is expected by end June 2018. Furthermore,
numerous measures geared towards improving SOE performance and governance practices have been
put in place. These include (i) adoption of Board of Directors Recruitment and Appointment Guidelines
to ensure transparency, meritocracy and diversity in the nomination and appointment of Board members;
(ii) adoption of Chief Executive Officer/Managing Director’s Recruitment Framework which aims to
guide the Board in the recruitment and selection process; (iii) adoption of directives in relation to
13
remuneration levels for Chief Executive Officers and Senior Managers of State-Owned Enterprises; (iv)
adoption of Board of Directors Performance Evaluation Framework; and (v) adoption of State-owned
Enterprises Governance Compliance and Performance Report, which aims to inform government
strategy for managing fiscal risk arising from public enterprises. These steps are crucial because Public
Enterprises pose a major fiscal risk to the budget. Transfers to public enterprises have reduced by an
average of 20% from N$ 7.4 billion in 2016/17 to N$ 4 billion in 2017/18. Government intends to
conduct an assessment of the viability and business model of several public enterprises to determine
ways of improving performance and realizing net economic gains from them.
Progress on triggers for Component 3 of EGCSP II are summarized below:
3.4.7 Implementation of the PPP Act by: (a) Establishment of a PPP Committee provided for by the
draft PPP Legislation; and (b) Issuance and gazetting of the PPP Regulation: The implementation of
the Government’s PPP programme is making steady progress. Following the enactment of the PPP Bill
and its gazetting in July 2017, steps are being taken to implement the provisions of the legislation. The
positions for members of the PPP Committee have been advertised, CVs evaluated, interviews conducted
and recommendations for appointments will be presented to Cabinet Committee on Overall Priority
(CCOP) for endorsement by end July 2018. The PPP Regulations have also been drafted and are expected
to be approved and gazetted as soon as the PPP Committee is in place. In the meantime, with the support
of the Bank through the Institutional Strengthening for Public Private Partnerships Project (ISPPP), the
PPP Unit continues to build capacity across Government. A PPP pipeline has been developed and a pilot
project (Ministry of Justice PPP Redevelopment) is about to be implemented. These efforts are necessary
because boosting infrastructure investments is a necessary step towards enhancing economic
competitiveness. As a result, the Government has been investing heavily in infrastructure, which is seen
as a critical enabler to achieve its ambitious development goals. However, this is exerting pressures on
the budget and driving the deficit, which impacts macroeconomic stability. The Bank of Namibia, in a
2014 study, estimated that Namibia faces an infrastructure funding gap of about N$ 150 billion over the
period 2014/15- 2019/20. Embracing PPP is therefore a credible option, particularly within the context
of fiscal consolidation, hence the ongoing efforts by Government.
3.4.8 Establishment of committees to drive the implementation of growth strategies for 10 industries:
The Government has decided to embrace a private-sector driven approach and, in this regard, opted for
the appointment of Industry Growth Facilitators, which was achieved in 2017. Several sector
associations have already been launched. These follow the preparation of Growth Strategies for 10 local
industries18 and associated value chains in 2016, with the support of GIZ. Numerous public and private
sector stakeholders organised themselves in Steering Committees and in working groups, and set-up
annual operational implementation plans for their respective industries. Progress made so far in the
various sectors is outlined in Technical Annex II. These efforts are being pursued in the context of the
implementation of the National Policy on Micro, Small and Medium Enterprises (MSMEs), the National
Industrial Policy, and the ‘Growth at Home’ strategy, which among others, focuses on supporting value
addition, upgrading and diversification; and securing market access at home and abroad
3.4.9 Approval by Cabinet, and submission to Parliament, of a micro-lending bill: The Micro-lending
Bill was approved by Cabinet and tabled by Parliament and National Council in 2017. Comments
provided by National Council have been integrated and the Bill has been passed by Parliament. The Bill
provides for the regulation of the micro-lending business in Namibia; establishes an effective and
consistent enforcement framework relating to micro-lending; and promotes responsible borrowing and
lending activities. It should be noted that Namibia’s capacity for industrial growth and greater economic
18 The ten Growth Strategies and associated value chains are Namibia’s Cosmetic Industry, Sea Food, Agribusiness, Metal Fabrication, Handicraft,
Leather Industry, Jewellery Industry and Colored Gemstone, Swakara Wool, Taxidermy Industry. Women constitute high proportion of employees in
these industries
14
diversification is constrained by business environment challenges, including the lack of financing for
Micro, Small and Medium Enterprises (MSME). The analytical work that informed the design of
EGCSP include one on SME development in Namibia, which underscored that lack of economic
diversification is one of the key drivers of growth volatility and slow employment creation. It also shows
why industrialisation, with active participation of SMEs, provides the biggest opportunity for creating
quality jobs and reducing income inequality. Promoting access to finance is a necessity for promoting
MSME development. The Government established the SME Bank in 2012 but it collapsed in 2017,
raising questions about the sustainability of the operational model utilised. It is expected that the Micro-
lending Act will make a positive contribution to improving access to finance. Other related measures
include the rollout of SME financing strategy19.
3.5 Policy Dialogue
3.5.1 Dialogue with the Government, and development partners, will continue to focus on the need to:
(i) deepen fiscal consolidation to enhance macroeconomic stability and further improve the country’s
credit rating. The focus will be on strengthening efforts to contain the wage bill, and enhancing
government revenue by supporting the operationalisation of NAMRA; (ii) pursue governance reforms
aimed at enhancing the performance of state-owned enterprises; and (iii) accelerate the implementation
of business environment and economic diversification reforms for job creation and inclusive growth. In
order to complement the ongoing dialogue, the Bank will, in collaboration with the EU, Finish Embassy
and GIZ, continue to support GRN’s efforts to build capacity for the operationalisation of the Public
Procurement Unit in the Ministry of Finance, operationalise the PPP framework and improve SOE
performance. The Bank plans to organise a Business Opportunities Seminar in Namibia during the course
of 2018. This forms part of efforts to intensify engagement with Namibia and to explore further business
opportunities, for both the public and private sector.
3.6 Loan Conditions
3.6.1 Prior Actions for 2018/19: Policy measures/actions identified in the original appraisal report of
EGCSP as indicative triggers for phase II of the operation, as well as the measures/actions which were
finally agreed with the Government as the prior actions for EGCSP II, required before Board presentation
of this Streamlined Appraisal Report, are presented in Table 3 below.
19 The Minister of Finance, in the 2018/19 Budget Speech announced that initial funding has been provided for the roll-out
of SME Financing Strategy and youth entrepreneurship, comprising venture capital fubnd, credit guarantee scheme and
training and mentorship program.
Table 3: Prior Actions and Required Evidence for FY 2018/19: EGCSP II
Original Triggers Prior Action Retained/Reasons for
Modification/Status
Evidence Required
Component 1:
Advancing Fiscal
Consolidation
Trigger 1: Appointment of Board
and Commissioners for the
Namibia Revenue Agency
(NAMRA)
The trigger has been split into (a) a Prior
Action and (b) Condition Precedent to
Disbursement.
Prior Action1: Initiation of the recruitment
process of the NAMRA Board.
Slight amendment to reflect the sequencing
of Board and Commissioner Appointments
and necessary prior consultations.
Details of the related condition precedent to
disbursement are outlined in paragraph
5.2.3.
Letter from the Minister of Finance
and supporting evidence confirming
submission to Cabinet of
recommendations on the appointment
of the NAMRA Board members and a
list of the Board members. .
15
Trigger 2: Completion of research
on the size of the public service
wage bill
Prior Action 2: Issuance by the Prime
Minister of Administrative Directive on the
promotion of efficiency in offices, ministries
and agencies which, among others, aims to
contain the Public Service Wage Bill.
Slightly amended to address the greater
scope of the cost containment measures in
the public sector.
Letter from the Minister of Finance
together with a copy of the
Administrative Directive on the
promotion of efficiency in the
administration of offices, ministries
and agencies.
Trigger 3: Approval by Cabinet
and publication of the new
Sovereign Debt Management
Strategy (SDMS)
Prior Action 3: Approval by Deliberative
Cabinet of the Borrower of the new
Sovereign Debt Management Strategy,
(SDMS)
Letter from the Ministry of Finance
of the Borrower confirming
Deliberative Cabinet approval of the
SDMS, together with a copy of the
SDMS.
Component 2:
Strengthening
Public Financial
Management and
Public Sector
Efficiency
Trigger 4: The implementation of
the Regulations for the Public
Procurement Act (2015) by: (i)
Setting up (a) the Procurement
Policy Unit (PPU), in accordance
with part 2 art 6. (1) of the Act; (b)
the Central Procurement Board of
Namibia, in accordance with part 3
art 8. (1) of the Act; and (c) the
Review Panel, in accordance with
part 7 art 58. (1) of the Act; and
(ii) Preparation of annual
Procurement Plan, and approval
and adoption of Standard Bidding
Documents for works, goods and
services.
Prior Action 4: Implementation of the
Regulations for the Public Procurement Act
(2015) by:
(i) Setting up and staffing the Procurement
Policy Unit;
(ii) Setting up and staffing the Central
Procurement Board and Review Panel;
(iii) Preparation of Annual Procurement
Plans by at least 10% of procuring entities including a number of high value procuring
entities; and
(iv) Approval and adoption of standard
bidding documents for goods, works and
consulting services.
Slightly amended for more clarity
(a) Official letter from the
Minister of Finance confirming the
establishment and appointment of
staff to (i) the Central Procurement
Board; and (ii) the Review Panel, in
accordance with the relevant sections
of the Public Procurement Act
(b) Letter from the Minister of
Finance confirming (i) the
establishment and staffing of the
Procurement Policy Unit; (ii)
extension of the contracts of current
seconded staff to the PPU together
with copies of letters of these
extensions; and (iii) details of the
structure, number of positions; and
timelines for the recruitment of
permanent staff and Head of the PPU.
(c) Letter from the Minister of
Finance confirming the preparation
and submission of annual
procurement plans by at least 10% of
procuring entities, including a
number of high value procuring
entities (such as Ministry of Health,
Education, and Agriculture) and
commitment to reach 100%
submission of annual procurement
plans by 30th June 2019.
(d) Letter from the Minister of
Finance confirming approval of at
least 23 standard bidding documents,
together with snapshot of the list of
documents uploaded to the PPU
website and Dropbox link; as well as
an update on the status of the
outstanding 3 standard bidding
documents.
Trigger 5: Submission to
Parliament of the Public Enterprise
Governance Amendment Bill,
which, amongst others, gives the
Ministry of Public Enterprises
shareholding right over
commercial related SOEs.
Prior Action 5: Submission to Parliament of
the Public Enterprise Governance
Amendment Bill, which, amongst others,
provides for efficient governance and
performance monitoring of public
enterprises
Slight amendment for more clarity on the
scope of the Bill.
Letter from the Minister of Finance
confirming transmission of the Bill to
Parliament, together with a copy of
the Bill.
Component 3:
Improving the
Trigger 6: Implementation of the
PPP Act by (a) Establishment of a
PPP Committee provided for by
the PPP Act; and (b) Issuance and
gazetting of the PPP Regulations.
The trigger has been converted to a condition
precedent to disbursement to allow for
finalization of the consultative process. (see
paragraph 5.2.3 for details)
Trigger 7: Establishment of Sector
Committees and an Inter-
Ministerial Committee to drive the
implementation of the growth
strategies for 10 industries.
Prior Action 7: Appointment of Industry
Growth Facilitators and operationalization
of at least 3 Sector Associations to drive the
implementation of the Industry Growth
Strategies
Letter from the Ministry of
Industrialization, Trade and SME
Development confirming the
appointment of Industry Growth
Facilitators, with TORs attached, and
operationalization of at least 3 Sector
16
3.7 Application of Good Practice Principles on Conditionality
3.7.1 The design of the EGCSP is in line with good practice principles on conditionality. The
reform policy matrix of the operation is fully owned by GRN. The policy and institutional measures are
designed to support effective implementation of the GRN Fifth National Development Plan 2017/18 –
2021/22 and Medium-Term Expenditure Framework (2018/19-2020/21), both of which support
measures aimed at promoting high economic growth, job creation and income equality. It was designed
based on continuous dialogue with GRN and in close consultation and collaboration with Development
Partners and other stakeholders, including the private sector and civil society organisations.
3.8 Financing Needs and Arrangements20
3.8.1 The Government’s financing needs for 2017/18 to 2019/20, and the Bank Group contribution for
2017/18 and 2018/19, are presented in table 4 below.
Table 4: Financing Needs and Bank Group Contribution
Source: Ministry of Finance, Namibia
3.8.2 The government’s borrowing plan initially targeted to finance the 2017/18 budget deficit of N$
6.12 billion using the N$ 3.0 billion loan from AfDB and the balance from the domestic market.
However, increased funding requirements pushed the budget deficit (on cash basis) to N$ 9.70 billion in
2017/18. Additional arrears of N$ 3.86 billion from the FY 2016/17 increased the deficit on commitment
basis to N$ 13.57. Financing of this increased deficit was done using new domestic borrowing of N$ 7.4
billion and external borrowing amounting to N$ 3.billion, leaving financing gap (arrears) of N$ 3.17
20 The fiscal projections in Table 4 are based on the Government’s estimates, which include significant fiscal adjustments going forward, as opposed to the
estimates of the IMF whose baseline projections only reflect policies currently in place.
N$ BillionUSD
BillionN$ Billion
USD
BillionN$ Billion USD Billion N$ Billion USD Billion N$ Billion USD Billion
GDP 168.84 13.51 177.511 14.20 184.748 14.78 200.759 16.06 219.314 17.55
Total revenue and grants 51.07 4.09 57.88 4.63 56.70 4.54 57.74 4.62 61.31 4.90
Of which: grants (excl, budget support) 0.00 0.00 0.05 0.00 0.54 0.04 0.59 0.05 0.65 0.05
Total expenditure and net lending 62.23 4.98 67.59 5.41 65.00 5.20 65.68 5.25 66.31 5.30
Of which: interest payments 4.30 0.34 5.23 0.42 6.51 0.52 6.70 0.54 6.75 0.54
Of which: capital expenditure 6.74 0.54 5.61 0.45 7.32 0.59 7.79 0.62 8.18 0.65
Overall balance (cash basis) (A - B) -11.16 -0.89 -9.70 -0.78 -8.31 -0.66 -7.94 -0.64 -5.00 -0.40
Accumulation of arrears -3.86 -0.31 3.86 -0.41 0.00 0.00 0.00 0.00 0.00
Overall balance (commitment basis) (C - D) -7.30 -0.58 -13.57 -0.36 -8.31 -0.66 -7.94 -0.64 -5.00 -0.40
External financing (net – minus Bank) 0.00 0.00 0.00 0.00 0.00 0.00 1.59 0.13 0.00 0.00
Domestic financing (net) 0.00 0.00 7.40 0.59 5.31 0.42 6.35 0.51 5.00 0.40
AfDB PBO 0.00 0.00 3.00 0.24 3.00 0.24 0.00 0.00 0.00 0.00
Financing (F + G+H) 0.00 0.00 10.40 0.83 8.31 0.66 7.94 0.64 5.00 0.40
Financing gap (-E - J), financed by: 7.30 0.58 3.17 0.25 0.00 0.00 0.00 0.00 0.00 0.00
Identifed measures (cumulative deficit reducing) 0.00 0.00 0.00 0.00
Others
Residual financing gap (I – J – K – L) 7.30 0.58 3.17 0.25 0.00 0.00 0.00 0.00 0.00 0.00
FY 2016/2017 FY 2017/2018 FY 2018/2019 FY 2020/2021FY 2019/2020
Business
Enabling
Environment for
Industrialization
Slightly amended to reflect a more private
sector driven approach.
Associations to drive the
implementation of Industry Growth
Strategies.
Trigger 8: Approval by Cabinet
and submission to Parliament of a
Micro-lending Bill
Prior Action 8: Approval by Cabinet and
submission to Parliament of the Micro-
lending Bill
No amendment required
Letter from the Minister of Finance confirming the submission to Parliament of the
Micro-Lending Bill, together with a copy of the Bill.
17
billion. In 2018/19, the budget deficit (on commitment basis) is expected to stand at N$ 8.31 billion,
which will be financed using the N$ 3.0 billion AfDB loan and N$ 5.31 billion borrowing from the
domestic market. In FY2019/20, domestic borrowing is expected to stand at N$ 6.35 billion, while
external financing is expected to stand at N$ 1.59 billion, both financing a deficit of N$ 7.94 billion with
a financing gap of zero. Similarly, financing gap in FY2020/21is expected to be zero after financing the
N$ 5.0 billion fiscal deficit (on commitment basis) solely from the domestic market.
IV. OPERATION IMPLEMENTATION
4.1 Beneficiaries of the Program
4.1.1 The beneficiaries of the program remain the same as in EGCSP I. The direct beneficiaries are
the Ministry of Finance, Ministry of Industrialization, Trade and SME Development, Ministry of Public
Enterprises and other ministries and agencies in charge of public financial management and business
environment reforms. The entire population of Namibia will ultimately benefit from the ongoing fiscal
consolidation efforts, through the resultant fiscal space, which will help to fund critical infrastructure
investments. Creation of fiscal space will also guarantee pro-poor expenditures for basic social services
delivery, which benefit the poor and other vulnerable groups such as women. The entire population will
benefit from improved governance of state-owned enterprises, through improved performance of SOEs
and enhanced service delivery. The private sector will also benefit from an increased competitiveness of
the economy, resulting from macroeconomic stability, PPP opportunities and an enhanced investment
facilitation framework supported by the programme. MSMEs, including women-owned enterprises, will
particularly benefit from the improved policy, legal, regulatory and institutional framework for industrial
and MSME development.
4.2 Implementation, Monitoring and Evaluation
4.2.1 Implementation Institutional Framework: The Ministry of Finance will continue to serve as the
implementing agency for EGCSP II. It will also be responsible for the overall coordination of the
programme, working closely with other Ministries and agencies such as the Ministry of Industrialization,
Trade and SME Development and the Ministry of Public Enterprises. The Ministry of Finance has the
necessary capacity to coordinate the implementation of the programme. The Bank continues to support
the Ministry of Finance, and other Government ministries and agencies, through an ongoing Institutional
Support Project for Public Private Partnerships. The project has supported capacity building activities
and is now financing transaction advisory services for the Ministry of Justice Office Redevelopment PPP
project. The Bank is considering the option of utilising savings from the project to provide additional
capacity development support to ongoing Public Procurement reforms. This will be done in close
consultation with the EU and other DPs supporting PFM reforms.
4.2.2 Monitoring and Evaluation Arrangements: The revised policy framework matrix (see Appendix
IV and Technical Annex III) agreed between the Namibian Authorities and the Bank, as well as the
quantitative and qualitative indicators outlined in the EGCSP II Results-based Logical Framework, will
constitute the instruments for monitoring and evaluation of the EGCSP II. The Ministry of Finance, with
the support of the National Statistics Agency and other relevant bodies, will continue to be responsible
for collecting data and coordinating monitoring and evaluation, and will make information available to
the Bank, as necessary. The Bank will continue to monitor the implementation of the Programme through
regular supervision missions and constant follow-ups, to assess progress achieved based on the agreed
indicators and prior actions. In the absence of a Country Office in Namibia, the Southern Africa Regional
Development and Business Delivery Office will continue to play a central role in follow-up of
implementation and monitoring of program results and, in particular, drive the policy dialogue with
Government and maintain regular consultations with Development Partners. Following completion of
EGCSP II, a Program Completion Report (PCR) on EGCSP will be prepared, to evaluate progress
18
against the Results-Based Logical Framework and draw lessons for future programme-based operations
and investment lending.
4.3 Financial Management, Disbursement and Reporting Arrangements
4.3.1 The debt management unit within the Ministry of Finance will continue to play a central role in
the financial management of the overall programme implementation, including overseeing the
drawdowns, planning for the use of funds, controls, reporting and arrangement for oversight. The loan
proceeds will be credited to the designated account denominated in ZAR, at the Bank of Namibia (BoN).
Similar arrangement was made during the first phase of EGCSP. GRN will acknowledge receipt of the funds,
and provide confirmation to the Bank that an amount equivalent to the loan proceeds, in local currency, has
been credited to the Treasury Account within five working days of funds disbursement by the Bank. This
requirement was satisfactorily complied with for the funds under EGCP I. The proposed operation will rely
on national external audit of the Government budget, as well as on an annual Flow of Funds audit by the
Office of the Auditor General. The flow of funds audit will be performed in accordance with Bank-approved
audit Terms of Reference, and the audit report, together with the auditor’s management letter, submitted to
the Bank within six months after the end of the financial year.
4.4 Procurement. In line with the Procurement Policy for Bank Group Funded Operations,
Namibia’s country procurement system will be utilized for the implementation of this proposed
operation. Taking into account ongoing reforms and related mitigation measures, the CFRA conducted
in May 2018 concluded that the residual risk attendant upon this operation is moderate. The Public
Procurement Act 2015is largely based on the UNCITRAL Model Law on Public Procurement and, to a
large extent, meets international standards including, inter alia, in the areas of strategic procurement
planning, open competitive processes to ensure value for money and credible mechanisms to address
complaints of bidders and providers of goods, works and consulting services. In addition to the results
achieved so far under EGCSP I, and in order to achieve the full benefits of reforms under the Procurement
Act 2015, the Government of Namibia will implement a strong capacity building program targeting all
actors in the public procurement arena (in both the public and private sectors) and continue implementing
the National Anti-Corruption Strategy and Action Plan 2016-2019.
V. LEGAL DOCUMENTATION AND AUTHORITY
5.1 Legal Documentation:
5.1.1 A Loan Agreement between the African Development Bank and the Republic of Namibia.
5.2 Conditions Associated with the Bank’s Intervention
5.2.1 Conditions Precedent to Entry into Force of the Loan Agreement: The entry into force of the
Loan Agreement shall be subject to the fulfilment by the Borrower of the provisions of Section 12.01 of
the General Conditions Applicable to Loan and Guarantee Agreements of the Bank.
5.2.2 Prior Actions: Before the proposed operation is presented to the Board for approval, GRN shall
have provided evidence, satisfactory in form and substance to the Bank, that the prior actions for the
EGCSP II outlined in Table 3 have been duly fulfilled.
5.2.3 Conditions precedent to disbursement of the funds of the EGCSP II: Disbursement of the loan
amount of ZAR 3 billion shall be conditional upon the entry into force of the Loan Agreement, and
fulfilment of the Conditions Precedent to Disbursement outlined in Table 5 below:
19
Table 5: Conditions Precedent to Disbursement
Disbursement Condition Evidence Required Condition 1: The transmission to the Bank of the details of a foreign
currency account with the Bank of Namibia for purposes of receiving
the proceeds of the Loan
Letter from the Bank of Namibia confirming the opening of the foreign
currency account.
Condition 2: Appointment of NAMRA Board and Commissioner. Letter from the Minister of Finance confirming the appointment of the
NAMRA Board members and the Commissioner and attaching a list of the
Board Members.
Condition 3: Implementation of the PPP Act by (a) Establishment of
a PPP Committee provided for by the PPP Act; and (b) Issuance and
gazetting of the PPP Regulations.
Letter from the Minister of Finance confirming the establishment of a PPP
Committee, together with a list of members.
Copy of the Gazette for the PPP Regulations.
Condition 4: Approval by the Decision-Making Cabinet of the
Borrower of the new Sovereign Debt Management Strategy (SDMS). Letter from the Minister of Finance of the Borrower confirming Decision-
Making Cabinet approval of the SDMS, together with a copy of the SDMS.
5.3 Compliance with Bank Group Policies
5.3.1 The EGCSP II complies with all applicable Bank Group policies and guidelines, and no waiver
of the applicable Guidelines has been requested with respect to this proposal. The key Bank Group
policies and guidelines applied to this Program are the following: (i) Bank Policy on Program-Based
Operations (2012,), (ii) the Bank Group Ten-Year Strategy (2013-2022) and the High-5s, especially the
priority areas of industrializing Africa, and improving the quality of life of the people of Africa;21 (iii)
the Governance Strategic Framework and Action Plan 2014-18, and (iv) Guidelines on Product and
Pricing for MICs (2009).
VI. RISKS MANAGEMENT
6.1 The risks and mitigation measures of the program are presented in table 6 below and are also
summarized in the logical framework:
Table 6: EGCSP Risk and Mitigation Measures
Risk Mitigation measures
Macroeconomic risks: Namibia’s vulnerability to external shocks remains a
major source of risk. The economic outlook envisages downside risks stemming
mainly from further declines in SACU revenue and commodity prices, slow
growth in mining and construction and debt-related risks.
Embark on further pro-growth fiscal consolidate efforts to bring public debt
on a declining path, safeguard priority capital and social spending and
implement reforms geared towards addressing structural challenges.
Fiduciary risks: The latest Country Fiduciary Risk Assessment (CFRA)
conducted by the Bank for Namibia indicates that the overall residual risk level
is deemed moderate, taking into account the risk mitigation factors. Some of the
areas of weakness identified relate to the legal and regulatory framework, and
roll out and integration of the Integrated Financial Management System
(IFMIS). Failure to mitigate the identified risks could negatively impact program
implementation, and achievement of expected program objectives.
The measures being implemented under proposed programme and ongoing
technical assistance being provided by the EU and other development partners
will help strengthen public financial management and further mitigate the
identified risks.
Implementation capacity risks: Capacity across government to implement the
reforms being pursued by the government remains a challenge.
Explore options to provide additional technical assistance. Also work with
development partners to tap into available TA resources to support the PBO.
Ongoing discussions with the United States Trade and Development Agency
(USTDA) for capacity building of RMCs in the area of procurement also holds
some promise.
Social risks: Fiscal consolidation measures pose potential risks to social sector
spending and basic service delivery, with negative social ramifications.
Pursue the objective of pro-growth fiscal consolidation by preserving capital
expenditure and pro-poor spending, and strengthen social safety nets.
VII. RECOMMENDATION
7.1 Management recommends that the Board of Directors approve an AfDB loan not exceeding ZAR
3 billion to the Republic of Namibia for the fiscal year 2018/19 for the purposes, and subject to the
conditions, stipulated in this report. Management invites the Board to note that this operation is the
second phase of a 2-year programmatic series, covering the fiscal years 2017/2018 and 2018/19.
21 See Appendix 5 for details on the linkage of EGESP with High-5s and Flagship Program.
2
I
APPENDIX I: LETTER OF DEVELOPMENT POLICY
II
III
IV
V
VI
VII
VIII
APPENDIX II: IMF PRESS RELEASE
IMF Press Release No. 18/69
February 28, 2018
IMF Executive Board Concludes 2017 Article IV Consultation with Namibia
On February 26, 2018, the Executive Board of the International Monetary Fund (IMF) concluded the
Article IV consultation1 with Namibia. Since 2010, Namibia has experienced a period of exceptional
growth. Growth was partly attributable to temporary factors. An expansionary fiscal policy, the
construction of large mines and buoyant credit supported growth and better living standards.
However, robust growth masked rising macroeconomic vulnerabilities and deteriorating productivity
performance. Moreover, structural impediments have contributed to keep unemployment and income
inequality unacceptably high.
With temporary expansionary factors ending, the economy has reached a turning point. GDP sharply
decelerated in 2016 and contracted in 2017 as construction in the mining sector came to an end and
the government began consolidating. With the economy contracting and Southern Africa Customs
Union (SACU)’s receipts temporarily increasing, the current account balance improved significantly.
However, despite significant fiscal adjustment, the public debt ratio continued to increase and almost
doubled over the last four years, exceeding in 2017 the median of the countries at the lowest tier of
investment grade. Credit growth to the private sector has slowed down reflecting both banks’ tight
funding constraints and low demand from highly leveraged households. Headline inflation declined
to 5.2% in 2017, from 7.3 at end 2016 and, in the context of the currency peg, the Bank of Namibia
has followed the South African Reserve Bank (SARB) and reduced its policy rate.
The outlook remains positive with considerable vulnerabilities and risks. Growth is projected to
resume in 2018, as mining production ramps up, construction activity stabilizes and manufacturing
recovers, before converging to a long-term rate of about 3½%, below the average of recent years.
Inflation is anticipated to remain below 6%. However, as SACU revenues are expected to decline, in
the absence of policy action, the fiscal deficit would remain large and public debt would continue
rising and approach 70% of GDP by 2022. On the positive side, the current account deficit is expected
to narrow on average to around 6% of GDP on the back of larger mining exports, but international
reserve coverage is projected to gradually decline.
Downside risks dominate the outlook. They stem mainly from possible fiscal slippages that could
undermine policy credibility, lower demand for key exports, further declines in SACU revenue, and
slower recovery in mining and construction activities. Extensive macro-financial linkages could
amplify the negative impact of shocks.
Executive Board Assessment
Directors commended the authorities for Namibia’s rapid growth, rising living standards, and
macroeconomic stability achieved over the past years. Directors noted, however, that the country
faces significant economic challenges and structural issues. Factors that temporarily boosted growth
have come to an end, public debt is rising, reserve coverage is low, and risks and vulnerabilities in
the financial sector remain. In addition, unemployment and inequality remain elevated. Against this
backdrop, Directors emphasized the need for sound policies and structural reforms to ensure fiscal
IX
sustainability, strengthen the financial sector, and generate sufficient jobs to manage the upcoming
demographic changes and reduce income inequality.
Directors welcomed the authorities’ fiscal adjustment efforts and emphasized that additional
consolidation is needed to ensure debt sustainability. They broadly agreed that efforts should be
spread over the next years and include expenditure and revenue measures that support long-term
growth, while addressing distributional concerns. In this regard, Directors saw merit in containing
public wage growth, rationalizing transfers to extra-budgetary entities, and reducing tax exemptions.
They welcomed the recent increase in social assistance programs while calling for better targeting to
protect the poor and strengthen the distributional impact of public spending. To buttress the
credibility of the adjustment, the authorities should improve budget formulation, tighten expenditure
controls, and strengthen revenue administration and the management of extra-budgetary entities.
Directors underscored the need to monitor and manage fiscal risks, particularly from off-budget
financing of large investment projects.
Directors noted that the additional fiscal adjustment will support the ongoing macroeconomic
adjustment process and contribute to bring the external position broadly in line with fundamentals.
They agreed that, in the context of the peg with the South African rand, the Bank of Namibia (BoN)
should maintain the policy rate in line with the South African Reserve Bank, and use macroprudential
tools to manage risks from the leveraged private sector.
Directors commended the early steps taken in implementing the FSSA recommendations. They
underscored the importance of monitoring and managing risks from banks’ concentrated balance
sheets, financial institutions’ interconnections, and public and private sector indebtedness. Directors
encouraged the authorities to address the existing supervisory and regulatory gaps in the non-bank
financial sector. They also saw merit in the development of an explicit macroprudential mandate for
the BoN, as well as a crisis management and resolution framework.
Directors emphasized the importance of implementing structural reforms to boost job creation to reap
the benefits of the upcoming demographic changes and achieve more inclusive growth. They called
for measures to focus on reducing skill mismatches through improving access and quality of
secondary and higher education and training; better aligning wage and productivity dynamics; and
enhancing the business environment.
X
APPENDIX III: NAMIBIA: UPDATE ON THE ELIGIBILITY CRITERIA FOR THE PBO
Prerequisites Country Eligibility
Government
Commitment to
poverty
alleviation
Namibia’s eradication of poverty agenda is anchored in its Fifth National Development Plan (NDP5) 2017/18
– 2021/22 which focuses on structural transformation and modernization through Investments in research
and development, skills development, diversification of economic activities and greater value addition.
Through NDP5, the country aspires to achieve an average annual real GDP growth of 5.0%. The Harambee Prosperity Plan (HPP: 2016-2020) complements the national development plans and vision 2030. To
consolidate the Government’s poverty reduction and inclusive growth agenda, in 2017, the government
published a Blueprint on Wealth Distribution and Poverty Eradication and its Implementation Plan. This
Blue Print articulates measures aimed at advancing strategies for eradication of poverty and reducing income
inequality. The Government has demonstrated its unwavering commitment to poverty eradication and
reducing high unemployment and income inequality.
Macroeconomic
framework
Namibia experienced a difficult year in 2017 with the economy recording a negative growth estimated at -
0.8% from a positive growth of 0.7% in 2016. This slowdown was mainly attributed to persistent external
shocks (including relatively weak global growth), falling commodity prices, especially uranium prices, poor
growth performance of neighbouring countries including South Africa and Angola, and sharp reduction in
SACU revenues. Growth has bottomed out with a mild recovery expected in 2018. Growth is expected to
come mainly from a rebound in mining activity (notably uranium, lithium, copper, lead, diamonds and gold),
tourism and agriculture (owing to a good rainfall). The Government’s commitment to fiscal consolidation, as reiterated in the 2016/17 mid-year budget review focused on bringing the economy back on a sustainable
fiscal path by cutting non-priority spending of up to 2.3% of GDP, while rebalancing and realigning spending
plans in line with revenue streams. At the beginning of the fiscal consolidation period, it was expected that
debt–to-GDP would reduce towards 35% of GDP. Given the adverse impacts on growth and employment,
the government has now opted to slow down the pace of fiscal austerity to boost growth but maintain a more
gradual consolidation stance with a debt level firming up at 40.6% of GDP in FY2017/18. Total public debt-
to-GDP is projected at 43.3% in the 2018/19 period and is expected to stabilize at around 45.3% over the
MTEF period.
Political
stability
Namibia is a constitutional multiparty democracy where free and fair elections are held regularly. The South
West Africa People’s Organization (SWAPO) has dominated politics since independence from South Africa
in 1990. In March 2015, H.E. Hage Geingob was elected President of Namibia, under the ticket of the South
West Africa People’s Organization (SWAPO), and has since implemented robust macroeconomic policies and new regulations to improve the business environment. The next presidential election is schedule for
2019, and SWAPO is expected to continue dominating the political scene. The current administration is
continuing with the policies of upholding the fundamental rights and freedoms enshrined in the Constitution.
The 2017 Corruption Perception Index by Transparency International ranked Namibia the 5th least corrupt
country in sub-Saharan Africa and 53rd out of 176 countries globally.
Satisfactory
fiduciary risk assessment
The 2015 Public Expenditure and Financial Accountability (PEFA) Assessment for Namibia indicated
progress in the implementation of PFM reforms. The adoption of medium-term expenditure framework (MTEF), medium-term plans (MTP) and programme budgeting, among others, has contributed significantly
to progress made by the country in public financial management. The PEFA, however, also noted
considerable delays in finalising and promulgating key PFM laws, such as the Public Finance Management
Bill. As part of the preparation of the EGCSP phase II, the Bank updated the Country Fiduciary Risk
Assessment (CFRA) for Namibia in May 2018. The CFRA shows that Namibia has continued to make
progress in implementation of PFM reforms in the areas of cash and debt management, financial reporting
and procurement. A Procurement Act has been passed and its executive regulations issued. The new
procurement system has 3 entities: (i) Central Procurement Board, (ii) Review Panel, and (iii) Procurement
Policy Unit based in the Ministry of Finance. However, a number of challenges continue to prevail, including
delays in finalizing relevant legal and regulatory frameworks, implementation of the Integrated Financial
Management Information System (IFMIS), development of systems linkages such as human resources and Treasury to boost internal control, and implementation of audit recommendations.
Harmonization As Middle Income Country, aid-related partnerships are limited in Namibia. However, steps have been taken
to improve aid coordination, including through the establishment of the Annual High-level Development
Partner Forum, which is co-chaired by the National Planning Commission and the Head of the United
Nations agencies. The Forum has encouraged development partners to align their assistance programs with
the Government priorities identified in NDP5, in line with the Paris Declaration. The mechanism for bringing
all the development partners together and sharing information about their activities, is being strengthened
through regular meetings under the general coordination of the UN. Therefore, while donor coordination is
effective, there is scope for improvement. The Bank has made a commitment to participate in the periodic
coordination meetings.
XI
APPENDIX IV: NAMIBIA EGCSP II: UPDATED POLICY MATRIX
Medium term policy
objectives
Policy measures (2017/18)
Policy measures (2018/19)
Outcomes
(Monitoring
indicators)
CSP goals to which the
program is contributing
Component 1: Advancing Fiscal Consolidation
Objective 1.1 Enhancing
Government Revenue
*The Cabinet has approved Bill for the
Establishment of the Namibia Revenue Agency
(NAMRA).
** Initiation of the recruitment process of the NAMRA Board
***Appointment of members of the Board of NAMRA and
Commissioner
Average growth in
Revenue
Wage bill as % of non-
interest expenditure
Pillar 2: Private sector
development – improving the
business environment and skills
Launch of Integrated Tax Administrative System
Objective 1.2 Containing the
wage bill
*Cabinet has approved a comprehensive set
measures proposed by the Prime Minister’s
Office to contain the wage bill.
**Issuance by the Prime Minister of Administrative Directive on
the promotion of efficiency in offices, ministries and agencies
which, among others, aims to contain the public service wage bill.
Objective 1.3 Enhancing debt
sustainability
*The Cabinet has approved and submitted the
Macro-Fiscal Framework for the FY 2017/18
Budget to Parliament.
** Approval by Deliberative Cabinet of the Borrower of the new
Sovereign Debt Management Strategy, (SDMS)
*** Approval by the Decision-Making Cabinet of the Borrower of
the new Sovereign Debt Management Strategy (SDMS)
Component 2: Strengthening Public Financial Management and Efficiency of State Owned Enterprises
Objective 2.1 Enhancing Public
Financial Management
(i) 2 Public Expenditure Tracking Surveys
(PETS) concluded
(i) Cabinet has approved and submitted to Parliament the Public
Financial Management Bill
Improved external audit:
PEFA PI-30
Improved internal audit:
PEFA PI-26
Improved procurement:
PEFA PI-24
Compliance to SOEs
Governance framework
Pillar 2: Private sector
development – improving the business environment and
skills
(ii) The Cabinet has approved the new Public Sector Internal Audit
Policy
(ii) The Cabinet has approved the Auditors Bill (iii) Automation of the HRMIS and the integration to IFMIS
Objective 2.2 Enhancing Public
Procurement
*The Regulations for the Public Procurement
Act (2015) have been issued and published in
the Official Government Gazette.
**Implementation of the Regulations for the Public Procurement
Act (2015) by:
Implementation of the Regulations for the Public Procurement
Act (2015) by:
(i) Setting up and staffing the Procurement Policy Unit;
(ii) Setting up and staffing the Central Procurement Board and
Review Panel;
(iii) Preparation of Annual Procurement Plans by at least 10% of
procuring entities including a number of high value procuring
entities; and
(iv) Approval and adoption of standard bidding documents for
goods, works and consulting services.
Objective 2.3 Improving
Efficiency of State-Owned
Enterprises
*The Cabinet has approved the hybrid
governance model for Public Enterprises,
which provides for separating State Owned
Enterprises into 3 clusters (commercial,
financial and social)
**Submission to Parliament of the Public Enterprises Governance
Amendment Bill which, amongst others, provides for efficient
governance and performance monitoring of public enterprises.
XII
Component 3: Improving the Business Environment for Industrialization
Objective 3.1: Enhancing the
Investment Facilitation
Framework and Processes
Cabinet has approved and submitted to
Parliament the Investment Promotion Act,
which provides for a dispute resolution
mechanism
Phased Operationalization of an Integrated Client Service Facility,
providing online business registration capability.
Private investments as
share of GDP
Number of new MSMEs
created
Pillar 2: Private sector development – improving the
business environment and skills
Cabinet has approved and submitted to
Parliament the Business and Intellectual
Property Authority (BIPA) Act, which provides
for online registration of companies
Regulations for the Business and Intellectual
Property Authority (BIPA) Act published in the
Official Government
*Cabinet has approved and submitted the
Public Private Partnerships (PPP) Bill to
Parliament
***Implementation of the PPP Act by: (a) Establishment of a PPP
Committee provided for by the draft PPP Legislation; and (b)
Issuance and gazetting of the PPP Regulation
Submission to Parliament of a One Stop Border Post Bill
Regulations for the Investment Promotion Act; published in the
Official Government
Objective 3.2: Enhancing
Industrial Development, Value
Addition and Diversification
*The Cabinet has approved and submitted to
Parliament the Industrial Development
Agency Bill.
** Appointment of Industry Growth Facilitators and
operationalization of at least 3 Sector Associations to drive the
implementation of the Industry Growth Strategies
Objective 3.3: Enhancing the
Development of Micro, Small
and Medium Enterprises
(MSMEs)
*The Cabinet has approved a National Policy
on Micro, Small and Medium Enterprises
(MSMEs)
Approval by Cabinet of a draft framework on fiscal and non-fiscal
incentives for MSMEs
**Approval by Cabinet and submission to Parliament of a Micro-
lending Bill
Preparation of SME financing strategy initiated
*Single asterisk denotes prior action for EGCSP I (2017)
** Double asterisk denotes prior action for EGCSP II (2018)
*** Triple asterisk denotes Condition Precedent to disbursement for EGCSP II (2018)
XIII
APPENDIX V: SOCIAL SECTOR CHALLENGES AND DEVELOPMENT
I. Context
The poverty level in Namibia, according to the 2016 Namibia Household Income and Expenditure
Survey, is estimated at 26.9 % (568,000 people) and the incidence of poverty is higher among female-
headed households (22%) compared to male-headed households (18%)22 with regional disparities.
Namibia has recorded a reduction in inequality in recent years, partly explained by the huge
investment in the social sectors through the government’s social safety net program for the elderly,
youth, people with disabilities, orphans, and vulnerable groups.
Women’s participation in the labor force is lower than that of men: 54.7% compared to 63.7 for men.
Gender disparities can be found when comparing subsistence agriculture with wage employment. It
is evident that more females than males are employed as unpaid family workers whether in
subsistence or other activity.23 The Global Entrepreneurship Monitor (GEM)24 Namibia Report
(2012) shows that women are almost as likely as men to be involved in early-stage entrepreneurship
(18% and 19%, respectively). The Government of Namibia has put in place a robust policy
framework to address social, economic, and gender disparities challenges. These include the
following:
Harambee Prosperity Plan (2016-2020): Primary objectives include (1) greater government
accountability and service delivery; (2) economic advancement and job creation; (3) attack on
hunger and poverty, reduction in infant mortality and improvement in sanitation and housing; (4)
development of energy, water, transport and ICT infrastructure; and (5) strengthening
international ties, fulfilling global obligations and seeking support for Namibia's economic
transformation. The Harambee Prosperity Plan does not replace but complements the national
development plans and vision 2030 which focusing on Six pillars include: 1) education; 2) science
and technology; 3) health and development; 4) sustainable agriculture; 5) peace and social justice;
and (6) gender equality. The Harambee Prosperity Plan specifically indicated youth and young
women as key target beneficiaries for development, and as key implementing partners, and
participants.
New Equitable Economic Empowerment Framework (NEEEF) (2016): Aims to provide a
clear overarching policy framework for Government empowerment policies and private sector
initiatives with the goal of creating wealth among the poor. The Government reiterate the creation
of an equitable and socially just society for previously disadvantaged population, namely women
and people living with disabilities. Special reference would focus on two pillars are of high
relevant to this transaction: Management Control and Employment Equity Pillar and Corporate
Social Responsibility Pillar. The first emphasizes board-based empowerment should benefiting
as many persons as possible, while the latter is to broaden the CSR and that it should not
concentrated on a few locations and or a few activities. Furthermore, it needs to be ensured that
rural and urban poor communities benefit.
National Gender Policy (2010 – 2020): The revised Gender Policy seeks to create an enabling
environment for different sectors to mainstream gender including in the energy sector. It focuses
on 12 areas of concern, which include: (i) Poverty and Rural Development; (ii) Education and
Training; (iii) Reproductive health and HIV/AIDS; (iv) Gender Based Violence; (v) Trade and
Economic Empowerment; (vi) Gender Governance and Decision Making; (vii) Research, Media,
Information and Communication; (viii) Management of the Environment; (ix) Issues of the Girl-
child; (x) Gender, Peace Building, Natural Disaster and Conflict Resolution; (xi) Gender Legal
22 NSA 2012 23 Ibid 24 GEM is the largest single study of entrepreneurial activity in the world with the most geographically and economically diverse sample. It is largely
about measuring entrepreneurial activity within the adult population, entrepreneurial spirit, and attitudes to entrepreneurship.
XIV
Affairs; and (xii) Human Rights. The clusters are primarily responsible for ensuring the
implementation of the National Gender Plan of Action. Representation in clusters are established
and comprises of gender focal persons, representatives nominated by various government
ministries, private sector, academic institutions, development partners, NGOs and civil society
National Gender Plan of Action (NGPA): The NGPA is the implementation guide for the
revised National Gender Policy (2010-2020). The NGPA was developed to facilitate
implementation of the recommendations and strategies contained in the National Gender Policy.
It also serves as a resource mobilization tool for the implementation of focused and coordinated
actions to eliminate gender inequality. It is reviewed after every five years to address emerging
issues up to 2020 (when the National Gender Policy expires). Namibia is party to a number of
international and regional instruments which are relevant to various themes covered by the NGPA
clusters on gender based violence and human rights; health, reproductive health , HIV and AIDS;
education training and the girl child; poverty, rural and economic development; governance,
peace and security; media research and information and communication.
Growth at Home: This was developed by the Ministry of Trade, Industry and SME Development
to reinforce the importance of accelerating economic growth, reducing income inequality and
increasing employment. The strategy emphasises industrialization, manufacturing and value
addition. A number of training and technical support were given to women entrepreneurs to
enable them tap into new markets and increase their exports. Moreover, ten Growth Strategies
and associated value chains were developed, focusing on the following industries: Cosmetics,
Sea Food, Agribusiness, Metal Fabrication, Handicraft, Leather, Jewellery and Colored
Gemstone, Swakara Wool, and Taxidermy. Women constitute a high proportion in most of these
industries.
II. Government reforms undertaken
GRN has prioritised education, health and social sectors in the national budget. In the education
sector, Government is committed to extending the provision of free education through to the
secondary school level, and improving teacher upgrading programmes and educational facilities to
enhance access to especially tertiary education and vocational training for expanded skills formation.
GRN is also committed to maintaining funding for the health sector in real terms to address gaps in
health facilities and improve service delivery. For every 100,000 births, 130 women die from
pregnancy related causes. Furthermore, Namibia also has one of the highest HIV prevalence rates in
the world, with women accounting for 53% of all reported new HIV cases. In the context of the
ongoing fiscal consolidation efforts, and as outlined in the 2016/17 Mid-Year Budget Review and
Mid-Term Budget Policy Statement, the government has ring-fenced expenditures in education and
health to ensure that gains in the social sector are not eroded.
Namibia has put in place a robust social safety net as part of efforts to fight poverty and inequality.
The government intends to increase the social safety net grant with the objective of lifting the
beneficiaries above the national poverty line. Over the past fifteen years, child welfare grant has
expanded more than 29 fold in coverage from 9000 beneficiaries in 2002 to 261,183 in January 2017
and these have significant poverty-reducing effects. Moreover, about 202,000 people above the age
of 60 years old received social grant under the universal social grant for the elderly and persons living
with disabilities. The social safety net operates from different line ministries and there are efforts by
the Ministry of Poverty Eradication and Social Welfare to come with a comprehensive policy, action
plan, and implementation arrangement, together with robust unified Monitoring and Evaluation
framework. As part of its efforts to improve food poverty, the government introduced a “Food Bank”,
which is a social benefit providing food packs to vulnerable households. The program was introduced
in June 2016 and is already benefiting 22,000 households as at February 2017 in the capital city of
Windhoek. The government plans to roll out the program to the other parts of the country later.
XV
The Government has developed a blueprint on wealth distribution and poverty eradication as a policy
framework aimed at advancing strategies for eradication of poverty and reducing income inequality.
The blueprint was approved by the Cabinet in August 2016, even though its implementation is yet to
commence. The Ministry of Poverty Eradication and Social Welfare is currently (as at Feb 2017)
developing the implementation plan to guide the roll out of the blueprint.
Namibian Ministry of Land Reform is implementing a comprehensive land reform strategy to ensure
fair and equitable access to land in Namibia. Other ministries, such as the Ministry of Agriculture,
Water and Forestry, Ministry of Urban and Rural Development, Ministry of Mines and Energy and
the Ministry of Environment and Tourism, are also involved in the creation of integrated regional
land use plans to serve as the basis for planning rural investments. Appropriate legal frameworks
have been established for land registration in communal areas and for equitable access to commercial
land. Communal land boards established by the government work with traditional hierarchies, such
as clan chiefs, to arbitrate land disputes. Women and marginalised groups, such as people living with
HIV/AIDS, have benefited in particular from improved legal rights and guarantees of access to land.
By end 2016, approximately nine million hectares of land have been peacefully distributed to landless
and previously disadvantaged persons in commercial areas. The Namibian Government has,
therefore, made significant progress towards achieving its goal of redistributing a total of 15 million
hectares of land by 2020.
III. Impact of the reforms supported by the proposed operation on the poor and
vulnerable groups: Enhancing inclusion
The reforms envisaged under this proposed PBO focus on three different areas: fiscal consolidation,
public financial management and business climate. The beneficiaries are the Namibian citizens at
large, with a particular focus on investors and the business community. The anticipated overall
outcomes include a more effective PFM, better performing state owned enterprises and an improved
business enabling environment.
The reforms supported by this operation will positively influence efforts geared towards reducing
poverty, vulnerability and spur economic growth. The programme’s focus on fiscal consolidation will
widen the tax base and reduce large inefficient expenditures and hence help create fiscal space for
increased investments in critical areas, such as infrastructure development and social sector programs,
including social housing and the extension of water and sanitation facilities in rural and remote areas
largely populated by vulnerable and poor communities. In addition, some of the reforms under the
business environment component are anticipated to support the development of micro, small and medium
enterprises, thereby facilitating job creation opportunities, including for youth and women. The focus on
investment facilitation is likely to attract investment and hence create job opportunities and reduce
poverty and income inequality.
The programme also supports the Government’s Fiscal Policy Strategy for 2016/17 - 2018/19, which
provides for the implementation of targeted measures to reduce poverty and vulnerability. Some of
the specific measures include (i) supporting investments in the priority economic and social
infrastructure; (ii) implementing policies which promote local access to, and ownership of the
resources; and (iii) strengthening the quality and coverage of Old Age Pension, Orphan and
Vulnerable Children and disability grants as a first line of defence against poverty for the vulnerable
members of society. By helping provide the much needed fiscal space in the context of fiscal
consolidation, the proposed programme will give a boost to the transformation of both economic and
social sectors, and positively impact the poor and vulnerable groups. It will help GRN to fulfil its
commitment to ensuring sufficient funding for key social programmes. As reflected in the logical
framework, a specific indicator targeting an increase in the budgetary allocation to social expenditure
forms part of the operation. It will help to ensure that fiscal consolidation reforms, rather than worsen
XVI
the already high inequality, will actually reduce inequality by supporting social safety net programs.
This will help improve the quality of public spending which is an important aspect of fiscal
consolidation reforms. The programme also supports procurement reforms which will, among others,
increase access to procurement opportunities for MSMEs, including those headed by women, hence
creating employment opportunities, increase income levels and reducing inequality. The EGCSP
intervention is expected to help create 300 new Micro, Small and Medium Enterprises. It will also
contribute to a reduction in the unemployment rate from 28.1% in 2014 to 20% in 2019 and a
reduction in the poverty rate from 18% in 2015 to 12% in 2019.
XVII
APPENDIX VI: LINK BETWEEN THE PBO AND THE THREE INFRASTRUCTURE INVESTMENT PROJECTS
THE MACROECONOMIC AND STRUCTURAL CONTEXT FOR THE BANK’S BUDGET SUPPORT TO NAMIBIA:
THE LINK BETWEEN THE PBO AND THE THREE INFRASTRUCTURE INVESTMENT PROJECTS
The Bank’s budget support to Namibia takes a two pronged approach, designed to help advance the country’s development agenda in a manner that is coherent with country priorities and
High5s. The PBO constitutes one part to support policy measures for addressing emerging vulnerabilities undermining macroeconomic stability and bold structural reforms adopted to
drive long-term job creating growth and income equality. The three infrastructure investment projects (with sharpened focus on transport, education and agriculture value chain
development) approved in 2017, constitute the other part that builds on and reinforces the PBO results for enhanced development outcomes. The EGCSP and the three projects complement
each other, in that while the PBO helps to preserve macroeconomic stability, address structural challenges and drive PFM and business environment reforms in support of industrialization,
the infrastructure investments will help boost the long term competitiveness of the economy, and hence create the foundation for long term sustainable growth and job creation. Details of
their contribution to addressing core development challenges are tabulated below. CORE DEVELOPMENT CHALLENGES GRN’S INTERVENTION BUDGET SUPPORT (EGCSP) INFRASTRUCTURE
DEVELOPMENT INVESTMENT
PROGRAM
Emerging
vulnerabilities
and challenges
have
undermined
macroeconomic
stability
After strong growth performance during the global economic downturn, Namibia has nursed wide fiscal and current account deficits, sharp rise in public debt and low international reserves. Furthermore, liquidity constraints in the domestic market and rollover risks impacted on the authorities' capacity to raise money domestically, a
traditionally preferred modality for gap financing. Recourse to international capital markets was constrained by exchange rate risks and its impact on public debt. Fitch and Moody’s in 2016 Q4 revised Namibia’s sovereign credit rating outlook from stable to negative.
Accelerated fiscal consolidation stance: Spending cuts of up to 2.8% of GDP in 2016/17 budget; Establishing semi-autonomous Revenue Agency to strengthen revenue collection; Strengthening revenue mobilization and tax arrears clearance; Reducing non priority spending, containing public sector wage bill. Prudent fiscal gap financing: To limit negative
impact on public debt, GRN is focusing on ZAR borrowing from domestic market, Johannesburg Stock Exchange and AfDB at competitive rates
Policy measures support enhancement of tax revenue collection and containment of wage bill. Financing provides fiscal space for priority capital and social spending. Long-term liquidity in ZAR extends
the maturity profile of GRN debt and mitigates exchange rate risk on debt. Phase I has already yielded positive results. Phase II will build on the achievements.
Construction phase will be instrumental in catalyzing domestic demand and creating jobs supporting the GRN’s ‘growth friendly’ fiscal consolidation stance.
Weaknesses in
PFM and
economic
governance have
impacted on the
quality and
efficiency of
public sector
spending but
improvements
have been
recorded.
Slow pace of PFM reforms weakened public sector
efficiency, regulatory oversight and enforcement and increased participation of private sector in public investment financing. At the same time, while SOEs play an important role in social service delivery and public sector capital investments, the majority exhibit poor governance and financial performance and represent a significant fiscal burden and risk on public finances through annual
budget transfers and guaranteed debt.
Making public procurement more transparent and
efficient and facilitating participation of SMEs, Operationalizing Public-Private Partnerships to strengthen mobilization of private financing.
Improving SOE governance and financial performance to reduce fiscal risks. Modernizing
PFM law and achieve Auditor General’s
independence. Enhancing public debt strategy.
Policy measures support
advancements in the PPP framework, new Public Procurement law, new PFM and Audit laws, improvements to SOE performance and approval of the new public debt strategy.
Use of country institutions and
systems such as public procurement, PPP unit and related SOEs as well as on-going and planned TA in these areas will help strengthen capacity. The possibility of using savings from the ongoing PPP project to help operationalize the public
procurement Act is being considered. This will help in the implementation of the infrastructure projects.
XVIII
Structural
bottlenecks are
limiting
Namibia’s
capacity to
achieve broad
economic
diversification for
the creation of
quality jobs and
meaningful
reduction in
income inequality
Dependence on mining contributes to growth volatility, slow employment creation and income inequality. An analysis of the growth pattern, shows that low labor intensive mining sector has been a key growth driver. Mining accounts for the second largest share of GDP, contributes nearly half of export earnings and offers the highest wage rate but employs only 2% of the labour force. While agriculture is the biggest employer it contributes less than 5
% share to GDP and has one of the lowest wage rates. The low employment elasticity of mining and low wage in agriculture partly explains the failure by the economy to translate high growth rates into more jobs and greater income equality. Economic diversification efforts are hampered by a poor business regulatory environment, infrastructure bottlenecks, skills mismatch, and lack of financing for Micro, Small and Medium Enterprises.
The HPP has identified SME based
manufacturing (industrialization) as one of the
key priorities of the NDP on which to focus reforms and resources in order to drive economic diversification and long term job creating growth. The Growth at Home Strategy provides a clear road map for export oriented industrialization.
It promotes the creation of quality jobs through
SME value-adding market oriented activities in agriculture including cereals, horticultural crops and livestock, and the country’s vast mineral resources including diamond, gold and copper. The HPP, NDP and Growth at Home underscore the importance of improving competitiveness of infrastructure: energy, transport, water and sanitation and ICT for
industrialization. The Green Scheme is supporting growth in agricultural productivity. The Business and Intellectual Property
Authority (BIPA) has been established under law to improve the business environment. An MSME
policy is in place and an Industrial Agency is being established for oversight.
Policy measures support the operationalization of BIPA to improve the business environment for industrialization, MSME policy and financing strategy and establishment
of the Industrial Development Agency. Industry Growth Facilitators
have been appointed and
Sector Associations have been
established to drive the
implementation of 10 Growth
strategies. A Micro-lending
Bill has also been passed.
This component directly advances the Bank’s High5’s priority focus on ‘Industrialization’
The infrastructure projects will support priority investments in education to improve skills and reduce the mismatch; agriculture to promote agricultural
productivity and SME driven agricultural value chain development; and transport for cost efficient evacuation of agro inputs and agro-products between the farm gate, the industry and the market (domestic
and export). The projects directly advance 4 of the Bank’s High5s namely Industrialize Africa, Integrate Africa; Feed Africa and Improve the quality of life of the people of Africa.
XIX
Appendix VII: Namibia – Development Partners’ sectoral areas of intervention and resource commitments (amounts in USD)
Sectors of
intervention
AfDB Finland U.S.A. Spain Turkey Germany Japan
European
Union United Nations China*
Agriculture,
Water, Rural
Development
85,604,400.2
2,612,825.00 - - 2,300,000.00 9,879,227.05 13,866,866.12 94,462,540.72
x
Health - 68,300,000.00 - -
- 10,857,763.30 21,980,000.00 Education 84,901,034.89
253,260.87 300,000.00 - 15,600,000.00 9,879,227.05 124,158.56 38,569,621.06 8,500,000.00
x
Governance 254,122,375.71
1,380,108.70 - - - 9,879,227.05 - 21,558,394.14 18,400,000.00
Poverty 1,044,213.04 - - - 9,879,227.05 115,931.19
30,570,000.00
Culture - - - - 9,879,227.05 - 16,286,644.95 - Environment &
Natural
Resources
1,002,173.91 7,701,667.00 650,176.43 250,000.00 9,879,227.05 - 3,399,078.17 -
Infrastructure 421,568,953.66
- - - 1,000,000.00 9,879,227.05 1,720,269.26 2,823,018.46 -
x
Innovation &
Technology
9,456,521.74 - - 650,000.00
1,550,000.00 - -
Trade &
Industry
543,306.52 - - - 9,879,227.05 - - -
Economic
Development
243,695.65 - - - 9,879,227.05 - - -
Financial
sector
384,963,603.68
TOTAL 1,231,160,368.14 16,536,105.43 76,301,667.00 650,176.43 19,800,000.00 88,913,043.45 17,377,225.13 187,957,060.80 79,450,000.00
Source: UN Development Partners’ Coordination in Namibia (2018).
Note: *Total China’s development assistance to Namibia is estimated at N$ 1,997,106,874, with N$ 302,709,602.51 coming directly from the Government of
the People’s Republic of China while the larger portion (N$ 1,694,397,271.98) is channelled by the Export-Import Bank of China.
XX
APPENDIX VIII: MAP OF THE REPUBLIC OF NAMIBIA
