Namibia is known for its extreme income inequality, which is one of the highest societal inequalities in the world despite the country’s endowment with abundant natural resources, good infrastructure, a vibrant democracy, peace and stability.
Since independence most of the wealth of this country has remained in the hands of only a small number of the population while the majority, as high as 70 percent, have nothing or are struggling to make ends meet. The country’s Gini coefficient now stands at 0.572. The world indicators shows that the country economy boasts relatively high growth, with an average growth rate of 4.3 percent between 2010 and 2015. The economy is heavily based on the country’s mining industry, which accounts for 50 percent of foreign exchange earnings. Despite its high income, Namibia has a poverty rate of 26.9 percent, an unemployment rate of 29.6 percent and an HIV prevalence rate of 16.9 percent.
Statistics provided by Namibia Statistics Agency (NSA) Namibia Household Income and Expenditure Survey (NHIES) 2015/2016 Report, indicates that poverty has further decreased during the last five years. In total 6.1 percent of the population (139 124 persons) in the country could not afford to buy the minimum (2 100 kcal) calories per day. The statistics also reveal that 10.7 percent of the population (244 037 persons) were still below the lower bound poverty line while 17.4 percent of the population (396,845) were still below the upper bound poverty line. Poverty in Namibia is acute in the northern regions of Kavango, Oshikoto, Zambezi, Kunene and Ohangwena, where a third of the population lives in poverty.
While President Hage Geingob likens inequality in the country to what hypertension is to the human body – weakening the functioning of government processes, systems and its institutions, political analysists have descried the inequality situation in the country as a ticking bomb. “We cannot turn a blind eye on the blatant but sad reality of inequality within our society. Inequality is to a country what hypertension is to the human body. It is a ticking time bomb, which one can either decide to tackle upfront or ignore at one’s own peril,” Geingob was quoted by media as saying. Graham Hopwood, executive director of the Institute for Public Policy Research (IPPR), attributes the current level of inequality largely to the Apartheid era. However, he says the country has made much progress in reducing it adding that tackling inequality is multi-faceted process and involves a range of measures and policies. To address inequality, improving education system is crucial alongside attracting the kind of investment that produces sustainable jobs that pay reasonably well. “We should look at making our tax system more progressive – the options of introducing a Capital Gains Tax and an Inheritance (Estate) Tax should be researched. A comprehensive welfare system that could include a basic income grant would help mitigate the worst effects of poverty and make life a little easier for the severely poor” Hopwood suggests.
Political analyst, Nico Horn, recommends that to reduce the massive gap between the rich and poor, the government needs to go back to the drawing board and come up with another pro-poor legal instruments to deal with wealth redistribution. He says the current black empowerment policies enacted shortly after independence are failing to redress the wealth imbalances. He suggests that the country [need to deploy] same strategies used to scale-down its poverty level that is currently at stand at 15 percent to address inequality in the country.
The poverty Blue Print indicates that between 2001 and 2011, Namibia has recorded a 41-percentage point reduction in absolute poverty from high level of 37.9 to 26.9 percent. Severe poverty was reduced in the same period from 23 percent to 15.8 percent thus registering a reduction of 32 percentage points. The achievements are attributed to the government’s generous social safety net programme for the elderly, youth, people with disabilities, orphans; and vulnerable children, which has been in place since independence. In 2013/14, the grant covered 98 percent of people above 60, up from 91 percent in 2011/12. “Our president needs to come up with a practical plan of action, policies that will bear fruits. Of course, New Equitable Economic Empowerment Framework (NEEEF), Black Economic Empowerment (BEE) and Affirmative Action (AA) policy as a guide to address wealth imbalances into the economy where all brilliant ideas to address wealth imbalances but as you might aware only few blacks that have been benefited and the majority of people are still poor 29 years of independence” Horn suggests.