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Article Title:
A Review of the Association between Performance-Based Budgeting and Debt Sustainability in Namibia
by Tafirenyika Sunde and Isaac Randa

Abstract:
Public debt escalation for developing countries is not a new phenomenon. However, if the debt level rises above the Gross Domestic Product of the economy, sustaining it in the long run can become an issue. In this review, we examine the concept of performance-based budgeting in general and also in the context of Namibia?s medium term expenditure framework (MTEF) which was introduced in 2001. We also discuss debt sustainability issues as well as some of the approaches used to determine it. In addition, we discuss Namibia?s macroeconomic performance, budget deficit and debt sustainability. Various variables are analysed using tables of figures and diagrams and we conclude that Namibia?s debt is still sustainable according to the yardsticks used by the IMF and the World Bank. The article is significant in that it contributes to macroeconomic literature on performance based budgeting and debt sustainability; an area that has received insignificant attention from economic researchers in Namibia. The review recommends that the government of Namibia should use its existing fiscal space to borrow funds from both the domestic and international markets (depending on which market is cheaper) to grow its economy and therefore create jobs for the jobless Namibians.

Keywords: deficit, public debt, performance based budgeting, economic indicators, gross domestic product, sustainability, Namibia

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