Reduction in poverty levels – report

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Loide Jason

Ongwediva-Between 2010 and 2016 poverty in Namibia was reduced from 28.7 percent of the population in 2009/10 to 18 percent in 2015/16.

This is according to information contained in the Fifth National Development Plan (NDP5) report, which outlines priority areas for the period 2017 to 2022.

It states that despite the noted reduction in poverty levels, economic growth has not significantly reduced unemployment levels, nor ameliorated socio-economic inequalities.
It notes that the majority of Namibia’s workers, who lack advanced skills or education, depend on subsistence agriculture for their livelihood.

In 2016, 31 percent of Namibians worked in agriculture – which accounts for only three percent of the national Gross Domestic Product (GDP).

Agriculture’s relatively small contribution to Namibia’s GDP is attributed mainly to the persistent droughts the country endured in recent years and a steady decline in the prices of agricultural commodities on the global market.

The NDP5 report further states that the lack of industrialisation in farming and a lack of infrastructure to support business development have made the agricultural sector less efficient than it would otherwise have been.

According to the report, the three-year long drought from 2013 to 2016 also led to lower production in both crop and livestock farming sectors.

It further indicates that the crop sub-sector was heavily impacted, as most farmers – commercial and subsistence – did not cultivate at full capacity. “Livestock farming contracted by 14 percent in 2015 from a positive 14 percent in 2014, due to the foot-and-mouth disease outbreak and fluctuation in prices of scale and small livestock,” it noted.

In 2015, the Namibian economy slowed to 5.3% from 6.5% in 2014. The slowdown was attributed largely to contractions within the primary extractive industries. Similarly, secondary and tertiary industries registered positive growth, although a slowdown of 8 percent was recorded in 2015 compared with 10 percent and 8 percent registered 2014, respectively. Despite this, the economy was resilient and withstood the external shocks.

Nevertheless, in response to the global economic situation, the Namibian government raised social expenditure to alleviate the suffering of Namibians living on or below the poverty line. Consequently, in 2015 expenditure outpaced growth in revenue, which in turn produced a budget deficit above 5 percent of GDP.

The public debt stock averaged 28 percent during NDP4 and reached a high of 37 percent of GDP in the 2015/16 financial year. The level of expenditure and public debt is said to be drifting toward unsustainable levels, while the high unemployment rate amid continuous drought puts even more pressure on government spending.

As a small yet open economy, Namibia continues to be a net importer of goods and services. Thus the country has an unfavourable trade balance, recording an average trade deficit of N$25 billion over the last four years.

In terms of the labour force, it is essential for Namibia to address the skill deficits in the labour market, so that more Namibians can obtain a decent, liveable wage.
Methods to achieve this include improving educational opportunities, including adult education and training, the NDP5 report states.

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