Namibia to Delay Railway Project Funding

Namibia has moved funding meant for railway projects in the 2024 budget to other projects, Minister of Finance and Public Enterprises, Ipumbu Shiimi said in the mid-year budget review.

The minister said considering the low execution rates on capital projects, a total of N$2.1 billion has been identified for reallocation. Shiimi said the projects affected by budget reallocations are primarily in the railway sector.

Nevertheless, the minister said given the importance of the rail sector to unlock economic activities, the government will ensure that sufficient funding is availed to the upgrading and development of the railway network, going forward.

Furthermore, Shiimi said the finance ministry will work closely with the Ministry of Works and Transport and TransNamib to ensure that the upgrading of the national railway network is expedited.

For the 2024/25 financial year, the government allocated N$2.5 billion towards railway infrastructure, including N$1.9 billion for the upgrading of the Kranzberg-Otjiwarongo railway section and N$488 million for the rehabilitation of the Sandverhaar-Buchholzbrunn railway section in the south of the country. Over the three-year period to 2027, the government had earmarked a total of N$6.6 billion for railway network development. An additional N$300 million was allocated to TransNamib to support its day-to-day operations, acknowledging significant infrastructure and operational challenges.

On the external debt portfolio, bilateral arrangements for external project financing had been made, with negotiations concluded with the African Development Bank (AfDB), securing a total funding of N$3.7 billion for the upgrading of the railway line between Kranzberg-Tsumeb and Otavi-Grootfontein.

The Namibian government pledged to contribute approximately N$3.4 billion to this project, bringing the total funding to N$7.1 billion.

Shiimi said the ongoing drought that has weighed negatively against domestic economic activities and caused considerable hardship for many Namibians. He said as a result, it has become necessary to make additional provisions to mitigate the impact of the drought on livelihoods and economic activities broadly.

He added that the Ministry of Works and Transport has continued with the programme to expand the national road network. Shiimi said the government believes that improving road infrastructures in rural areas will go a long way not only to improve the living standards of such communities through easing access to services but also broadly to unlock economic opportunities.

Earlier this year on 28 February, Shiimi tabled a budget of N$100.1 billion, consisting of N$74.6 billion in operational expenditure, N$12.8 billion in development expenditure (of which N$3.2 billion was for projects to be funded outside of the State Revenue Fund) and N$12.8 billion in interest payments.

Written for Railways Africa Magazine by Chamwe Kaira

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