Mally Likukela
Minister of Finance, Erica Shafuda announced last week that she will present the national Budget 2026-27 on Thursday, February 26.
For many Namibians, the Budget – as presented to parliament in a speech or statement often boils down to a handful of headline questions and key takeaways such as: Will income taxes change?
Will fuel get cheaper?
Will spending on jobs, infrastructure, and welfare increase?
While these are pertinent questions to understanding the Budget, the real Budget story runs far deeper than the speech alone.
The picture is much bigger than what is captured in the speech. Beyond the technical speech to be delivered by the Minister, deep inside the text and numbers, there lies critical information that pertains to what the government is truly prioritizing in terms of “bread and butter” issues.
At a time when the nation is faced with high unemployment, lower growth, widespread poverty and inequality, decoding the message from one of the key budget documents is paramount.
If there was a time in the history of Namibia where decoding the subtle messages from the Minister’s speech mattered, this is the time where decoding the messages beyond the speech really matters as much as listening to the speech itself.
Decoding the finance minister’s budget speech is crucial for every citizen because it will help them to understand how government fiscal policy will impact their personal finances, business operations, and economy at large.
This article is a simple attempt to guide citizens on how to easily decipher the messages contained in the budget speech and accompanying document once tabled on the 26th of February 2026. This guide will help citizens to decode the speech and be able to break down complex, jargon-heavy announcements into actionable insights, allowing citizens, investors, and businesses to digest the speech and plan for the upcoming financial year. Once the speech has been decoded, citizens should be able to tell whether their living standards will improve, if taxes will increase, and where the “bread and butter” money will be being spent.
Understanding the Budget speech
First and foremost, citizens must understand that the budget statement is not “The Budget” as is commonly known, but it is just one of the documents in a set of several other documents that the Minister presents (or tables) to Parliament.
The Budget Speech together with other documents is aimed to explain the Government’s plan for revenue, spending, borrowing and taxation down to the last dollar.
The Budget statement marks the beginning of the budget approval process which is done to obtain Parliament’s approval before the budget (Appropriation Bill) is approved and signed by the head of state to become the Appropriation Act.
Therefore, the Speech primary serves to act as the official, public-facing summary of the government’s financial plan for the upcoming financial year. Delivered by the Minister of Finance, it basically highlights key spending priorities, revenue-generating measures (taxes), and the overall economic strategy to Parliament and the public.
While the budget speech covers the key points, the accompanying documents such as the Estimates of National Expenditure, MTEF, Development Budget, Accountability Report as well as the Citizen’s Guide are more detailed and are technical to provide the full breakdown of the financial plan.
Structure of the Budget speech
To be able to decipher the budget statement, citizens must read it in conjunction with the most recent previous statement. The structure matters as it controls the flow of the message and over the past, the budget speech has always assumed a structured policy statement format. Based on the Mid-Year Review Policy Speech for 2025/26 Financial Year, the upcoming statement is most likely to contain the following parts:
- Introduction and Policy Context (Page 2): The Minister will start with protocol, quoting the constitution, and setting the theme for the fiscal year (e.g., “A New Dawn: Beyond 35”). It highlights the economic, social, and fiscal context, including global and regional economic conditions.
- Global Economic context (Page 3 and 4): She will then move on to give an analysis of the global and domestic economic context, including GDP growth projections, inflation rates, and the impact of sectors like mining, agriculture, and tourism.
- Fiscal Performance and Outlook (Page 5): Thereafter she will give a review of the previous financial year’s revenue, expenditure, and budget deficit, including updates on public debt levels.
- Revenue Proposals (Page 6): The Minister will thereafter provide details on expected revenue, including tax changes, improvements in tax administration, and customs revenue from the Southern African Customs Union (SACU).
- Budget Priorities and Expenditure Allocations (Page 7): The Minister will then spend a substantial amount of time on the core of her speech. Here she will highlight key expenditure priorities (e.g., education, health, infrastructure, social sectors) and specific allocations for ministries or “Votes.”
- Financing and Debt Management (Page 11): Following the core presentation, the Minister will outline the strategy for financing the deficit through domestic and external borrowing.
- Conclusion (Page 15): Finally, she will give a summary of the budget goals, appreciation to the Budget Working Group and a formal tabling of the Appropriation Bill for approval.
Budget Headline
Budget speeches just like all Government speeches often focus on positive outcomes while the real picture on the ground remains hidden in the text and numbers. Citizens must look at the specific figures to see the reality.
The best point to start is to look at the main priorities and headlines – the aggregates or totals of the key numbers, e.g. Total Revenue, expenditure, fiscal deficit, major allocations, etc. From these numbers, one can quickly see where Government’s priorities lay
. These aggregate numbers can help citizens to quickly tell what kind of Budget it is: whether it is a Growth-focussed, consolidation-focussed, reform-focussed Budget, or a balancing act. To see what the government is really saying, citizens must simply look at these specific areas within the statement:
What to look out for in the Budget statement
In the Budget statement for the fiscal year to be tabled on the 26th of February 2026, it is important for citizens to look out for what the government will be signalling about critical issues that affects the economy in general and households in particular.
General observation
- Global and domestic developments: Start by looking at how the Government views global and domestic developments (events) and their impact on growth, inflation, interest, and exchange rate risks. These variables are crucial because they serve as a “barometer” of the status of the economy and sets the stage for how tax money will be collected and spent.
At the time of the mid-term budget review, the world bank had forecasted that advanced economies were to decrease from 3.3% in 2024 to 3.2% in 2025 and further down to 3.1% in 2026.
- Revenue (Income): Citizens should understand where the money is coming from and how much has been collected? At the time of the last statement (mid-term budget review), the government had indicated that the revenue outrun had reached N$36.6 billion. Another pertinent question to ask is where this money is coming from. If it is mostly from taxes on individuals (income tax/VAT), the burden is on the citizen. If it is high in borrowing, the burden is on future generations.
- Expenditure plans: When it comes to the expenditure plans, citizens should check the Budget statement to see whether Government will continue with the fiscal expansion or it will tighten spending; if it tightens the budget – which sectors, or priority areas will be affected.At the time of the Mid-term budget review, the total expenditure remained at N$89.4 billion.
- Capital/development spending: Citizens should also assess whether the Government is going to prioritise long-term capital/development spending and which sectors it believes will shape Namibia’s next phase of growth (energy, agriculture, education, etc,). Here it is particularly important to also check for government’s deviations (if any) from its long-term development plans as contained in the Vision 2030, NDP(s), Harambee and even the political manifesto of the ruling party. At the time of the Mid-term budget review, the government have reduced the capital budget from N$9.6 billion to N$8.8 billion.
- Fiscal stance: It is also critical to look at the statement and assess the fiscal stance or what is also commonly known as budget balance. From the statement one should be able to tell whether the Government plans to run a deficit, surplus, or balanced budget. According to the Mid-term budget review, the budget deficit widened to 6.0% of GDP, up from the initial 4.6% forecasted. Given Namibia’s notable Debt profile, the budget balance is a critical number to shed light on the country’s debt sustainability plan. This number indicates how much the government must borrow to cover the financial shortfall.
- Public Debt Stock: Citizens should also look for the Public Debt Stock figures to check if the debt-to-GDP ratio is projected to rise, and if this happens to be the case, it could indicate long-term sustainability risks.These figures are usually less visible tin the statement to most citizens yet are especially important – borrowing levels shape inflation expectations and interest rates that eventually influences the financial environment household’s lives. Namibia’s public debt stock was projected to rise to N$177.1 billion (67.5% of GDP) by the close of the 2025/26 fiscal year, according to Bank of Namibia forecasts. The Mid-Year Budget Review indicates that rising interest payments, estimated at N$14.4 billion (15% of revenue), are driving the need for tighter fiscal management.
Specific Observations
Understanding the government’s budget statement is beneficial for citizens because it provides essential insights into how these national or regional economic policies’ pronouncements will impact their bread-and-butter issues. The most important variables that have a direct impact on Citizens’ well being to look out for in the statement includes the following:
- Tax reforms: Understanding the budget statement allows you to identify changes in income tax, VAT, property taxes, or duties on goods (like fuel or alcohol) that directly affect your disposable income. Changes to tax brackets or rebates directly affect take-home pay. For younger earners, this shapes monthly savings; for higher earners, it influences long-term investment and debt strategies.
- Cost-of-living adjustments: Through the Budget statement, the government announces the cost-of-living adjustments. The speech reveals changes in government subsidies (Free tertiary education/Subsidy), grants(realisation of the adjustment to the social grants i.e. old-age pension), or social welfare payments that might impact your household budget and many other insights. Budget allocations towards social grant support, education and healthcare shape the broader cost of living and affect households both directly and indirectly.
- Pro-employment budgeting: The speech will also hint on planned infrastructure spending and how such spending will influence future job creation. Spending on infrastructure can signal future job creation and growth, especially relevant for young professionals building careers.
- Business operations: The speech also contains insights that affect the business community at large. The speech often hints at economic trends affecting borrowing costs for mortgages and credit (Interest Rate & Inflation Signals). Citizens can pick up signals in the statement that hints at economic trends that would affect borrowing costs, such as home loans, car finance, or credit cards.
Red Flags in the statement
There are several red flags that citizens can easily flag out in the budget statement. These are warning signs that a government’s fiscal policy is unsustainable, inefficient, or poses risks to economic stability that citizens should look out for in the speech.
- Low Budget Implementation Rate: Citizens to look out for low budget implementation. If a number of ministries that have been allocated funds fails to spend them (under-spending), it signals inefficiency, even if the planned spending looked good on paper. In the Mid-term budget review for the 2025/2026, low-budget implementation, specifically regarding capital projects,was already identified as a critical issue. As of September 2025, the total expenditure and commitment excluding statutory had reached only N$41 billion, which accounts for 39% of the budgeted spending for the fiscal year.
- Rising Debt-to-GDP Ratio: Citizens must look out for rising debt-to-GDP ratio. If this ratio is rising, it means that debt grows faster than the economy – this signals that the current spending level is unsustainable. The Mid-term budget already hinted on the worsening Debt-to-GDP situation that had climbed to a cumulative amount of N$176.3 billion by the end of September 2025.
- High Debt Service Costs: Linked to the previous red flag is the high debt service cost. If a sizeable percentage of revenue goes toward paying interest on loans, less money is available for actual service delivery. The impact of which was already revealed in the previously mentioned statement, where interest payment totalled an amount of N$6.8 billion, a substantial 6.4 percentage point increase compared to September 2024.
- Low Development Expenditure: Citizens should look out for misalignment in the budget. If the budget is entirely operational (salaries) with little for new infrastructure, the government is not investing in future growth.According to the Mid-term budget statement of 2025/26 government already reduced development expenditure by 9.38% to N$8.8 billion, shifting funds toward operational costs amid slowing growth.
- Negative Primary Balance: Citizens should also check for the negative primary balance. If income minus non-interest spending is negative, the government is borrowing money just to keep the lights on, not for investment. While in case of Namibia, the budget outlook indicates a narrowing primary surplus dropping to N$915 million (0.3% of GDP) from an earlier N$1.3 billion estimate, but the widening budget deficit remains a concern.
- Unrealistic Revenue Projections: Citizens should look out for unrealistic revenue projections in the statement. If the government predicts high revenue growth in a failing economy, the budget may be inaccurate, leading to emergency cuts later in the year. The revenue pressure was already highlighted in the Mid-year budget statement of 2025/26 budget review where the government reported a slower revenue collection rate, with N$36.6 billion collected by September 2025, representing 40% of total estimates. Revenue collection fell 10 % points below the same period in 2024/25, highlighting a weakened revenue outlook amid a projected 3.3% economic growth.
- High Allocation to Subsidies for State-Owned Enterprises (SOEs): Citizen should look out for the subsidy trends towards SOEs. If the statement shows a high allocation to SOEs, this often indicates that public owned enterprises are underperforming and taxpayers are footing the bill for their losses. The Mid-Year Budget Review statement revealed continued significant financial support for SOEs despite overall efforts to manage fiscal sustainability. The budget statement highlighted that subsidies and other current transfers increased by a notable 22.3% in the actual expenditure for FY 2024/25, a trend that continued to impact the 2025/26 fiscal space.
Mally Likukela is an economist.
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