Namibia PDNA 2009 - GFDRR

The current account balance was already expected to decline to 2.9 percent as a result of the global economic downturn, but with
the added economic impacts resulting from the floods, the current account balance is expected to reach 2.6 percent of GDP. Thus,
while the impact of the floods on the external sector is relatively small, the 2009 floods exacerbate impacts from the crisis.
Impact on the fiscal sector
The current forecast of the impact on the fiscal sector includes loss in tax revenue that could result from decline in economic activity,
and the corresponding increase in expenditure due to reconstruction activity.
Impact on tax revenues
A decline of N$162 million is expected from the agriculture and manufacturing industry, which may result to an N$6 million decline
in direct taxes. An estimated N$297 million loss of revenue is estimated for the six affected areas, implying an estimated loss of
N$44 million in taxes on goods and services. The impact of the total tax revenue shortfall is expected to be N$50 million, i.e. tax
revenue losses would be 0.07 percent of GDP.
Impact on Government expenditure
The immediate response to the disaster was evident in the increased spending by the Government on emergency projects such as
the shelter programme which cost N$13.8 million. Social development expenditure increased as a result of reparation of schools;
equipment replacement; furniture and materials (N$5.0 million); health expenditure for medicines, morbidity control and monitoring
(N$4.2 million); food and seeds imports.
Development expenditure increased as a result of the land preparation programme which amounted to N$28.3 million and the cost
of road rehabilitation and construction Government expenditure is expected to have increased by 0.3 percent of GDP and would
reach 36.9 percent of GDP after the floods. As a result, the fiscal deficit is expected to increase to -1.2 percent of GDP in 2009.
Item
Table 32: Impact of the flood disaster on the 2009 fiscal sector
Value
(N$ million)
Value
(US$ million)
Total Rev & grants before disaster 21,751 2,669
In percent GDP 31.5
Total Rev& grants after disaster 21,699 2,663
In percent GDP 31.5
Revenue loss (in percent GDP) 0.07
Total expenditure before disaster 25,283 3,102
In percent GDP 36.7
Total expenditure after disaster 25,472 3,125
In percent GDP 36.9
Expenditure increase (in percent GDP) 0.3
Fiscal balance before the disaster -581,186 -71
In percent GDP -0.8
Fiscal balance after the disaster -821 -100
In percent GDP -1.2
Decline in Fiscal balance
(in percent of GDP)
-0.3 -0.3
Source: Estimations by DaLA Team
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