Namibia has put on hold 50 capital projects that were supposed to be implemented during the 2016/17 financial year due to lack of funds.
All the projects that have been suspended would have costed the government more than 300 million Namibian dollars (22 million U.S. dollars).
The suspension of work on the projects came after finance minister Calle Schlettwein announced more budget cuts and suspended 4.4 billion Namibian dollars out of the 5.5 billion Namibian dollars he appropriated from various ministries.
The cuts announced Thursday last week saw Schlettwein reducing the three-year rolling budget of 66 billion Namibian dollars to about 53 billion Namibian dollars.
Apart from suspending projects, Schlettwein also cut the budget for some projects that are already underway.
Some tenders were frozen in September “to prevent overcommitting the current budget and in order to remain with some fiscal (budget) space allowing for the realigning of resources with development and socio-economic priorities.”
“No tender awards should be made until such time that the financial year 2016/2017’s budget review and the re-appropriation of capital projects is finalized,” Schlettwein said in a letter sent out in September.
The minister also said the “measures are aimed at placing public finances on a sustainable path as government adjusts to a changing micro fiscal environment. The measures are to be implemented with immediate effect”.
Among the projects that have been suspended is the construction of a railway line that links Cape Fria and Katima Mulilo that was supposed to cost 57.4 million Namibian dollars.
A 9.8 million Namibian dollars Windhoek commuter train feasibility study was also put on hold. So was the plan to build an aerodrome at Opuwo, about 700 kilometers from Windhoek.
Two projects — the national genetically modified organism testing, training and laboratory (38 million Namibian dollars) and the pharmaceutical manufacturing plant (36 million Namibian dollars) were also put on hold.
A hospital meant for the Khomas region where Windhoek is the capital will not materialize. Two other projects — the renovation of a state hospital at Mariental and the upgrading of another state hospital at Okakarara — are on ice.
Among the projects that have had their budgets cuts is the upgrading of railway lines across the country after the minister appropriated 132 million Namibian dollars.
He also took 69 million Namibian dollars from the agro-processing development and 75 million Namibian dollars meant for land acquisition.
This move will have a negative effect on the construction industry that has already raised red flags.
Acting president of the Construction Industries Federation of Namibia, Nico Badenhorst, said many companies are being put at risk, and many direct and indirect jobs are at stake.
“It is extremely important that government acutely focuses its efforts on supporting Namibian contractors. We trust that government will set clear goals and adopt the right strategies to effectively cushion the impact of this drastic step on Namibian enterprises,” he said. Enditem
Source: Xinhua/NewsGhana.com.gh
