Public finance concerns government revenue, expenditure, taxation, and debt. It plays an important role in a country's growth and development by funding infrastructure, education, health, and other services. The main components of public finance are tax collection, the budget, expenditures, and deficit or surplus. A government uses public finance to achieve economic stability and growth, equitable resource allocation, and other strategic objectives through balancing revenue collection and expenditure.

1. • The way of managing the public funds in the economy of the
country which plays the most important role in the development
and growth of the nation both domestically as well as
internationally
• A study of the role of the government in the economy. It is the
branch of economics which assesses the government revenue and
government expenditure
Units: 3 Public Finance

2. *It “concerned with the income and expenditure of public
authorities. It includes
a) effects of taxation,
b) Government expenditure,
c) public borrowing and
d) Deficit/surplus

3. Importance of Public finance
*For the growth and development of a country education system.
*To push up the industrial and economic development of the country,
*To support education to enhance development that will give
opportunity for more employment opportunities,
*Encourage investments and savings in the desired direction and
increase social benefits through public expenditure such education
and health

4. Main Components of Public Finance

5. Detailed- main components public finance
include
*Tax collection: include sales tax, income tax (a type of progressive
tax), estate tax, and property tax and VAT
*Budget: The budget is a plan of what the government intends to
have as expenditures in a fiscal year.
*Expenditures: everything activity that a government actually spends
money on, such as social programs, education, and infrastructure.
*Deficit/Surplus: If the government spends more then it collects in
revenue there is a deficit in that year. If the government has less
expenditures than it collects in taxes, there is a surplus.
*National Debt: If the government has a deficit (spending is greater
than revenue), it will fund the difference by borrowing money and
issuing national debt.

6. Public Finance –process cycle
*bellow is the diagram shows the interconnection process

7. Public fiancé - Revenue and Expenditures
Most common income revenue of the GRN and expenditures in the
world of public finance.
Revenues:
* Income tax (personal, corporate), Property tax, Sales tax, Value
added tax (VAT), Import duties, Estate tax
*Major Expenses,
*Health care, Employment insurance, Pensions, Education, Defence
(military), Infrastructure

8. The major importance of Public fiancé
1. Steady state economic growth:
*Public finance is important to achieve sustainable high economic
growth rate
2. Price stability:
*The GRN uses the PF to overcome inflation and deflation. During
inflation it reduces the indirect taxes and general expenditures but
increases direct taxes. It collects internal public debt and mobilizes
for investment.
3. Economic stability:
The GRN stabilize the economy, e.g. during prosperity, the GRN
imposes more tax and raises the internal public debt. The amount is
used to repay foreign debt and invention. The internal expenditures
are reduced.

9. 4. Proper allocation of resources:
The GRN Finance is for proper utilization of human resources
5. Balanced development:
The GRN uses the revenues and expenditures to erase the gap
between urban and rural. It allocates the budget for infrastructural
development in rural areas for direct economic benefits to the rural
people.
6. Promotion of export:
The GRN promotes the export, imposing less tax or exempting the
taxes or providing subsidies to the export oriented local goods. Like
supply the inputs at the subsidized prices, It imposes more taxes on
imports to promote local products
7. Equitable distribution:
The GRN uses the revenues and expenditures to reduce inequality. If
there is high disparity it imposes more taxes on income, profit and
properties of rich people and on the goods they consume. The money
collected is used for the benefit of poor people through subsidies,
allowance

10. *8.Infrastructural development:
The revenues to be spent for construction of infrastructures for
socio-economic reformation. This help to keep peace, justice and
security
Important of Government Funding in Education
*Increase the number of skilled to fulfil labour requirement in
economic sectors
*It reduces actual education cost which paid by students to
education institute,
*Subsidy students and staffs in private college if they success to
attract more student to register in their institution.

11. Important of Government Funding in
Education -
*Increase the number of skilled to fulfil labour
requirement in economic sectors
*It reduces actual education cost which paid by
students to education institutes,
*Subsidy students and staffs in private college if they
success to attract more student to register in their
institutions.
*Subsidies, salary payment, allowance, and pension of
teachers and lecturers in both public and private
*Allocation of funding for scholarship and study loan to
universities or college students, locally and
internationally NSFAF

12. *Allocation of new teaching equipment for teaching
purpose to assist lecturer/teachers to use latest
equipment
*Help to build the education infrastructure in the
colleges and training institutes

13. Government’s roles of allocation, redistribution of
resources to education sectors
*Developing regulatory frameworks for the public funding and
private
*Clarifying roles and responsibilities in decentralised school
funding systems
*Supporting schools with their budgetary responsibilities
*Providing equity funding to schools
*equitably allocation to schools that are most in need of
additional resources
*Choosing indicators to design funding allocation mechanisms
*Designing funding formulas for current expenditure
*(The use new formula funding suited to the distribution of
current expenditure)

14. *Linking budget planning to educational objectives
*Promoting transparency in the use of school funding

15. Public budget allocation process/cycle in Namibia
Refer to The Parliamentarian’s Handbook: National Budgeting Process
In Namibia

16. 1. policies direction section –
• medium term expenditure
• Framework, Pre budget statement
• Budget guideline and ceiling
2. Budget formulation
• Line ministry generate estimate and send them to ministry of finance
• Ministry of finance compile budget
3. Budget enactment:
• budget presented to the parliament
• Budget signed into law
4. Budget implementation
• Spending agencies request money from treasuries to deliver public service
5. Budget auditing
• internal and external auditing

17. National Major budget distributions sectors of the
economy
1. The Social Sector:
• Ministries of basic Education, Higher Education, Training and
Innovation); Gender Equality and Child Welfare; Health and Social
Services; Sport, Youth, and National Service; Veterans Affairs, and
Poverty Eradication and Social Welfare.
2. The Economic Sector: ministry of finance Mines and Energy;
Environment, ministry of Trade, Agriculture; Fisheries Land Reform;
National Planning and Public Enterprises.
3. The Public Safety Sector: Ministries of Home Affairs, Police;
Defence; Justice; Anti-Corruption Commission; Judiciary and the
Attorney General.
4. The Administration Sector: Office of the President; the Office of
the Prime Minister; National Assembly; Auditor General;
International Relations, National Council; Labour, Urban and Rural
Development and the Electoral Commission.

18. 5. The Infrastructure Sector
Ministry of Works, Transport and Information and Communication
Technology.
Key players in the budgeting in Namibia process
1. Parliament: the role: to ensure that the budget optimally matches a
nation’s needs with available resources
2. The Ministry of Finance: responsible for the formulation of economic
development policies and the economic management of the affairs of
Government.
3. Office of the Auditor General: Office of the Auditor General6 is to
audit the accounts of all institutions
4. Non-State Players: These private entities actively lobby Government for
more favourable fiscal policies. mainly on matters that concern their
business operations They make submissions to the Finance Minister on
various fiscal issues, i.e. on expenditure and taxation,.

19. 5. Development Partners and Aid Agencies:
Development partners or donors have influence on the budget
process. These are International Monetary Fund and the World
Bank.
6. Citizens
Citizens pay taxes and are the ultimate beneficiaries, Through
various lobby groups, citizens have a direct duty to ensure
(oversee) that all the other players in the budget process act in
their best interest.