Namibia Spearheads the Move Towards a Basic Income Grant for All

Nineteen years after independence, Namibia is still one of the most unequal societies in the world.  The GINI co-efficient stands at 0,63 as inequalities are stark and widespread.  Poverty in the country has racial, ethnic and gender dimensions and permeates all spheres of life.  In the absence of systematic policies of redistribution since independence, the legacies of apartheid-colonialism are still visible today.

Masego Madzwamuse's picture

Team Leader: Economic and Social Justice Cluster

July 8th, 2013

Nineteen years after independence, Namibia is still one of the most unequal societies in the world.  The GINI co-efficient stands at 0,63 as inequalities are stark and widespread.  Poverty in the country has racial, ethnic and gender dimensions and permeates all spheres of life.  In the absence of systematic policies of redistribution since independence, the legacies of apartheid-colonialism are still visible today.

In 2002, the Namibian government appointed the Namibia Tax Consortium (NAMTAX) to review Namibia’s tax system and to explore ways to foster economic growth and development.  In its report, the consortium found that high levels of inequality and poverty were economically unsustainable and “that by far the best method of addressing poverty and inequality would be a universal income grant”.  The commission further suggested that the BIG should be set at a level of N$ 100 per person per month.  This would cover all Namibians from the date of birth until they reach the age of 60 at which time the universal national old age pension scheme (currently N$ 450 per month) would kick in.  The consortium pointed out that the net costs of the Basic Income Grant would amount to about 3% of Namibia’s GDP and could be recovered through changes in the tax system, thus making a BIG affordable.

The Namibian government was divided over the question of a BIG for the country.  Some regarded it as an unaffordable welfare measure and the International Monetary Fund did its utmost to discourage Namibia’s policy makers from implementing the BIG.  Thus in 2005, a coalition of churches, trade unions, NGOs and AIDS Service organisations formed the Basic Income Grant Coalition with a view of advocating for the introduction of a BIG in Namibia.  After 2 years of debating and lobbying, no breakthrough was achieved.  Government ministers and parliamentarians were still divided over the merits of a BIG and the Coalition thus decided to implement a basic income grant in one particular village.  This was meant to demonstrate the impact of a BIG in practice.

The chosen location was the settlement of Otjivero in the Omitara district in Eastern Namibia.  About 1200 people reside there, most of them retrenched former farm workers and their families who have nowhere else to go.  Poverty and desperation were widespread there and the Coalition believed that if the BIG could make a difference in the lives of the residence of Ojtivero, it would certainly be able to make a difference for Namibians in the rest of the country.  The pilot project started in January 2008 with all residents below the age of 60 years receiving a Basic Income Grant of N$100 per person per month, without any conditions attached. The pilot project is accompanied by a research team of local and international researchers that closely monitors the impact over a 2-year period until December 2009. The research team also documented the situation prior to the BIG implementation through a baseline study in November 2007.

In July 2008, the first impact assessment study was carried out by the research team, jointly co-ordinated by the Desk for Social Development within the Evangelical Lutheran Church and the Labour Resource and Research Institute (LaRRI).  The sample consisted of 54 households, covering almost a third of all inhabitants.  In addition, interviews with key informants in and around Otjivero were conducted.  The study report was launched in early October 2008 and revealed some amazing results.  The effects of the BIG after only 6 months included:

  1. The community responded to the introduction of the BIG by establishing its own 18-member committee to mobilize the community and advise residents on how they could improve their lives with the money. This suggests that the introduction of a BIG can effectively assist with community mobilisation and empowerment
  1. Since the introduction of the BIG child malnutrition in the settlement has dropped remarkably. Using a WHO measurement technique, the data shows that children's weight-for-age has improved significantly in just six months from 42% of severely underweight children to only 17%.
  2. Since the introduction of the BIG, the majority of people have been able to increase their work both for pay, profit or family gain as well as self-employment. This finding contradicts critics' claims that the BIG would lead to laziness and dependency.
  3. Income has risen in the community since the introduction of the BIG by more than the amount of the grants. There is strong evidence that more people are now able to engage in more productive activities and fosters local economic growth and development. Several small enterprises have started in Otjivero, making use of the BIG money being spent in the community.
  4. The school recorded a 95% payment of  school fees and the parents prioritized the buying of school uniforms. More children are now attending school and the stronger financial situation has enabled the school to improve teaching material for the pupils. The school principal reported that drop-out rates at her school were 30-40% before the introduction of the BIG. By July 2008, these rates were reduced to a mere 5%.
  5. The BIG supports and strengthens Government's efforts to provide ARV treatment to people suffering from HIV/AIDS by accessing governments services and enabling them to afford nutrition.
  6. The residents have been using the settlement's health clinic much more since the introduction of the BIG. Residents now pay the compulsory N$4 payment for each visit and the income of the clinic has increased fivefold.
  7. The criticism that the grants are apparently leading to more alcoholism is not supported by evidence from the community. On the contrary, the introduction of the BIG has induced the community to set up a committee that is trying to curb alcoholism and that has worked with local shebeen owners not to sell alcohol on the day of the pay-out of the grants.
  8. The introduction of the Basic Income Grant has helped young women recipients to take charge of their own lives. Several cases document that young women have been freed from having to engage in transactional sex.
  9. Economic and poverty-related crime (illegal hunting, theft and trespassing) has fallen by over 60%.
  10. The BIG has helped to achieve progress towards all eight Millenium Development Goals (MDGs).

These initial results were very encouraging and exceed the expectations of the BIG Coalition. The Otjivero residents have embraced the pilot project and are actively engaged to make it work. In their own words:

“Generally, the BIG has brought life to our place. Everyone can afford food and one does not see any more people coming to beg for food as in the past. What I can say is that people have gained their human dignity and have become responsible.”

 

“We don't expect everything to change overnight because people were hungry and N$100 is not enough for everything to change. In the beginning the parents were using the money for school fees and uniforms and to make sure they have sufficient food. The BIG has really helped the community in Otjivero, people now feel part of the nation”

 

In December 2008, the second impact assessment was carried out.  Its results will be released in March/April 2009.  Preliminary indications are that the positive trends found during the first 6 months have continued.  The BIG coalition will use these findings to intensify the campaign for the BIG across Namibia and also to further engage policy makers.  After all, 2009 is an election year and the coalition wants to ensure that 2010 will not only be the year of football but also the year in which Namibia becomes the first country to introduce a universal BIG.  The coalition also hopes that other countries with similar levels of poverty and inequality (like South Africa) will follow suit. 

There is no doubt that the BIG is a limited measure and cannot be a panacea for all socio-economic challenges.  The initiative has to be accompanied by other measures of redistribution, job creation and structural changes.  However, the BIG represents a promising starting point that can make an immediate dent in the debilitating and violent poverty that undermines the life chances of so many people.

About the author(s)

Masego is the Team Leader for the Economic and Social Justice Cluster. Prior to joining OSISA she was a freelance consultant working in the area of environment and development. Before then she was a Programme Manager for the UNDP TerrAfrica initiative, which was aimed as mobilizing civil society engagement in processes aimed at up-scaling sustainable land management in Sub-Saharan Africa. Before working for UNDP Masego was a Country Programme Coordinator for the International Union for the Conservation of Nature (IUCN) in Botswana and later Regional Programmes Development Officer for the IUCN Regional Office of Southern Africa in Pretoria. She holds a Masters Degree in Environmental Sciences and a Bachelor’s Degree in Sociology and Environmental Science.

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