Namibia reallocated funds for Railway Projects
Namibia has reallocated funds originally designated for railway projects in the 2024 budget to other initiatives, as stated by the Minister of Finance and Public Enterprises, Ipumbu Shiimi, during the mid-year budget review.
The minister noted that due to low execution rates on capital projects, a total of N$2.1 billion has been identified for this reallocation. The railway sector is primarily affected by these budget adjustments. Despite this, Shiimi emphasized the critical role of the rail sector in stimulating economic activities. He assured that the government would ensure adequate funding is available for the enhancement and development of the railway network in the future. Additionally, Shiimi mentioned that the finance ministry will collaborate closely with the Ministry of Works and Transport, as well as TransNamib, to accelerate the upgrading of the national railway infrastructure.
For the financial year 2024/25, the government has allocated N$2.5 billion for railway infrastructure projects. This includes N$1.9 billion earmarked for upgrading the Kranzberg-Otjiwarongo railway section and N$488 million for rehabilitating the Sandverhaar-Buchholzbrunn railway section located in the southern part of the country. Over the next three years, from 2024 to 2027, the government plans to invest a total of N$6.6 billion in the development of the railway network. Furthermore, an additional N$300 million has been allocated to TransNamib to assist with its daily operations, recognizing the significant infrastructure and operational challenges it faces.
Regarding the external debt portfolio, the government has established bilateral agreements for external project financing, successfully concluding negotiations with the African Development Bank (AfDB) to secure N$3.7 billion for upgrading the railway line between Kranzberg-Tsumeb and Otavi-Grootfontein. The Namibian government has committed to contributing approximately N$3.4 billion to this project, bringing the total funding to N$7.1 billion. Shiimi also addressed the ongoing drought, which has negatively impacted domestic economic activities and caused significant hardship for many Namibians. He indicated that it has become essential to make additional provisions to alleviate the drought's effects on livelihoods and overall economic activities. Moreover, he noted that the Ministry of Works and Transport continues to implement a program aimed at expanding the national road network. Shiimi expressed the government's belief that enhancing road infrastructure in rural areas will significantly improve living standards by facilitating access to services and unlocking economic opportunities. Earlier this year, on February 28, Shiimi presented a budget of N$100.1 billion, which includes N$74.6 billion for operational expenses, N$12.8 billion for development projects (with N$3.2 billion allocated for projects funded outside the State Revenue Fund), and N$12.8 billion for interest payments.
