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What 2016 holds in store for us

Dec 1, 2015, 11:21 AM

It has been stated by the Finance minister, in his presentation of the draft national budget at the National Assembly yesterday, that total revenue and grants for 2016 is projected at D12.994 billion, which represents an increment of 16 per cent over the 2015 figure of D11.197 billion.

However, the Minister also stated that the total expenditure and net-lending is projected to increase from D11.700 billion in 2015 to D16.911 billion in 2016, representing an increase of 45 per cent, the bulk of which is attributed to the recurrent budget.

The impending budget gives some other interesting indications as to what the coming year (2016) holds in store for us.

Debt interest payment is projected to consume around 43 per cent of Government revenues in 2016 compared to 35 per cent in 2015, increasing from D2.837 billion in 2015 to D3.720 billion in 2016, or 31 per cent.

In the case of financing the budget deficit, Net Domestic Borrowing (NDB) is projected to increase to D3.399 billion in 2016, which represents 8 per cent of GDP.

These are actually indexes to watch as it means that we are heavily indebted, as the principal debt plus the debt interest payment have continued to go into the stratosphere each year.

“Staying within this borrowing ceiling and working towards reducing it is premised mainly on strict adherence to budget ceiling by all budget entities as well as structural reforms,” the finance minister said.

Although the minister also said he remained “convinced that this budget will be a useful tool in our drive to achieve and sustain macroeconomic stability, and attain the Government’s primary objective of reducing poverty, reducing our borrowing trend and indebtedness could only be achieved “if we all recommit to strict fiscal discipline”.

Essentially that is the point: fiscal discipline, which has been a bane of the economy over the years.

However, since the draft budget has been tabled for discussion at the National Assembly, it is expected that members of both parties in the house - that is, the ruling party and the opposition - would have to conduct a healthy process of scrutinizing the budget for all to see whether our fate as a nation is hanging in the balance, as we enter the year 2016.