Business Reporter
THE Minister of Finance and Public Enterprises, Ericah Shafudah, on Tuesday, 21 October, tabled the 2025/26 financial year (FY) mid-term budget with the theme “Beyond 35: For a Prosperous Future,” reallocating a bulk of funds mainly to the education sector, with an amount of N$150 million earmarked for the hiring of over 600 teachers, and another N$185 million allocated for the recruitment of 1,537 health personnel.
Shafudah explained that the FY2025/26 mid-year budget and medium-term budget policy statement were developed against a persistent slowdown in economic growth projections and fiscal challenges, including revenue shortfalls, rising public debt and debt servicing costs, and increasing demands for priority funding in line with NDP6.
“The government has committed to keep intact the global appropriation amount of N$89.4 billion for FY2025/26 and only increase or decrease certain amounts allocated to Votes by reallocating potential savings and funds from low-performing projects to support the most urgent priorities,” Shafudah said.
She added that government revenue and grants in the 2024/25 fiscal year amounted to N$89.1 billion, a notable increase of 9.3% from N$81.4 billion collected in FY2023/24. “This growth was primarily driven by a robust recovery in the SACU revenue, which expanded by 15%. While VAT and diamond royalties also contributed positively, rising by 14% and 26% respectively, other revenue streams slowed during the 2024/25 fiscal year. Actual expenditure for FY2024/25: Total expenditure in FY2024/25 amounted to N$100.1 billion, including grants funding, a 14.3% increase from the N$87.1 billion recorded in FY2023/24,” Shafudah summarised.
She added that during the mid-year fiscal assessment for FY2025/26, the revenue outturn reached N$36.6 billion, constituting 40% of the total budget estimates by the end of September 2025.
“While this figure is significant, it is essential to recognize that the revenue collection rate has slowed, falling 10 percentage points below the performance seen in the corresponding period of FY2024/25,” Shafudah said.
She further noted that the government’s balance sheet showed total cumulative public debt reached N$176.3 billion by the end of September 2025. “This rising debt stock is compounded by a significant increase in debt servicing costs, with interest payments totaling N$6.8 billion, a substantial 6.4 percentage point increase compared to the interest expenditure as of September 2024,” the finance minister said.
At the beginning of the year, the minister said she tabled a budget of N$89.4 billion on 27 March 2025, consisting of N$79.8 billion in operational expenditure and N$9.6 billion in development expenditure.
“In addition, I announced an amount of N$3.2 billion for projects to be funded outside of the State Revenue Fund and N$13.7 billion in interest payments, bringing the total expenditure for FY2025/26 to N$106.1 billion. During consultations for the Mid-Year Budget Review in September 2025, additional expenditure requests to the tune of N$11.1 billion, comprising N$8.2 billion for operational and N$2.9 billion for development budgets, were proposed for consideration. As I have indicated earlier, we are projecting a shortfall in revenues to the tune of N$3.2 billion for FY2025/26 as per the current projections. In addition, given the low execution rates on capital projects, a total of N$826.4 million has been identified for reallocation, with potential realised savings from vacant positions across OMAs of N$378.6 million for FY2025/26,” Shafudah said.
Therefore, in keeping with the fiscal sustainability narrative, the minister said they balanced these expenditure requests against the available resource envelope.
“As a result, the FY2025/26 Appropriation Amendment Bill provides for the reallocation of N$1.20 billion,” the finance minister said.
An amount of N$814 million is proposed for consideration by the Ministry of Education, Innovation, Youth, Sports, Arts and Culture, of which N$663 million is to cater for registration and tuition fees for the first quarter (January–March 2026) in line with the approved stance on Subsidised Free Tertiary Education. In addition, a total of N$151 million is for the recruitment of 665 teachers, while a total of N$185 million was added to the Ministry of Health and Social Services for the recruitment of 1,537 health personnel. An amount of N$61 million is availed to the Ministry of Finance under Contingency Provision, while the Office of the President received N$50 million, and the Emergency Disaster Fund N$50 million for the increased turnout of beneficiaries in the concluded drought relief programme.
The Electoral Commission is to receive an amount of N$30 million to cater for the shortfall caused by additional by-elections during FY2025/26.
“Before I conclude, allow me to quote the World Bank Group President, Ajay Banga, at the recently concluded 2025 Annual Meetings Plenary. He stated, ‘A job is what happens when a school leads to a skill, when a road leads to a market, when a clinic keeps someone healthy enough to work, when energy powers a business.’ We remain committed to funding education and healthcare, and that is how we turn investment into impact. I end with Her Excellency Netumbo Nandi-Ndaitwah’s call for speedy, effective and efficient execution of projects to bring about much-needed jobs for our people, particularly the youth,” Shafudah said.
