Namibia
A much bigger pilot project was initiated by the Basic Income Grant (BIG) Coalition in Namibia . The BIG Coalition consists of five large umbrella bodies in Namibia: the Council of Churches (CCN), the National Union of Namibian Workers (NUNW), the Namibian NGO Forum (Nangof), the National Youth Council (NYC) and the Namibian Network of AIDS Service Organisations (Nananso).
This basic income project started in January 2008 as a two-year pilot to test a BI in practice. The coalition hoped that if the results of the project were positive, the Namibian government would be persuaded to introduce a national BI in Namibia. The pilot project has successfully run for two years and the results have exceeded expectations.
first payout in Otjivero-Omitara
The pilot was conducted in Otjivero-Omitara, a low-income rural area about 100 kilometres east of Windhoek. A total of 930 inhabitants received a monthly basic income of 100 Namibian Dollars, which equals 12.4 US Dollars or 8.6 Euros at the average exchange rates of 2008 and 2009.
The final results have not been published yet but the figures in the Assessment Report of April 2009 about the first year of the project are extremely positive. The percentage of underweight children dropped from 42% to 10% and dropout rates at the school fell from 40% to almost 0%. One of the other most important findings was that rate of those engaged in income generating activities (above the age of 15) increased from 44% to 55%. In particular, the introduction of the BI in Otjivero-Omitara led to an increase in small businesses, such as brick-making, baking of bread and dress-making. The BIG enabled people to make the necessary investments for their businesses. Furthermore, it increased the buying power of the inhabitants, thereby creating a market for the products of the new businesses.
This increase in employment contradicts the idea of critics that an unconditional BI has a negative effect on work motivation.
The two-year period of the pilot project has ended at the end of 2009. Despite the positive results the Namibian government has thus far rejected the introduction of a national BI in Namibia. The BIG Coalition continues with its efforts to persuade the government that a BI is the best way to fight poverty in Namibia. In the mean time, the inhabitants of Otjivero - Omitara will receive a 'bridging income' of 80 Namibian Dollars for the next two years.
More information:
BIG Coalition website
One year BIG Pilot Assessment Report, April 2009
Resources
For more information about BI debates and developments around the world, the best resources are the newsletters of BIEN and USBIG, as well as the congress and discussion papers on the websites of both networks:
Please, read this pdf with pictures.
http://www.bignam.org/Publications/BIG_Assessment_report_08b.pdf
Making the difference!
The BIG in Namibia
Basic Income Grant Pilot Project
Assessment Report, April 2009
ISBN: 978-99916-842-4-6
The research of the Basic Income Grant Pilot Project is designed and
carried out jointly by the Desk for Social Development (DfSD) and the
Labour Resource and Research Institute (LaRRI) on behalf of the BIG
Coalition (comments to: web@bignam.org). Coalition web page:
The authors of this report are Claudia Haarmann, Dirk Haarmann, Herbert
Jauch, Hilma Shindondola-Mote, Nicoli Nattrass, Ingrid van Niekerk and
Michael Samson.
Printing of this publication is funded by the Friedrich Ebert
Foundation and is hereby gratefully acknowledged.
Table of Contents
TABLE OF CONTENTS................................................................I
INDEX OF PHOTOGRAPHS.......................................................III
ABBREVIATIONS.......................................................................V
FOREWORD ............................................................................VI
READER'S GUIDE TO THE REPORT..........................................IX
ACKNOWLEDGEMENTS.............................................................X
EXECUTIVE SUMMARY............................................................13
SECTION 1: THE BIG A SMALL PROJECT WITH A LARGE AIM. 18
1.1 INTRODUCTION TO THE PILOT PROJECT..............................................18
1.2 HOW BIG WAS PILOTED IN OTJIVERO-OMITARA...................................19
1.3 IMPLEMENTATION OF THE BIG........................................................21
1.4 METHODOLOGY .........................................................................24
SECTION 2: IMPACT ASSESSMENT..........................................26
2.1 REALITIES OF POVERTY BEFORE THE BIG............................................26
2.2 EXPECTATIONS FOR THE BIG.........................................................30
2.3 VOICES OF CHANGE......................................................................32
2.4 PROFILE OF OTJIVERO-OMITARA......................................................33
2.5 COMMUNITY MOBILISATION............................................................37
2.6 ALCOHOL.................................................................................42
2.7 CRIME.....................................................................................44
2.8 LEVELS OF POVERTY.....................................................................47
2.9 HUNGER AND MALNUTRITION...........................................................50
2.10 GENERAL HEALTH.....................................................................56
2.11 EDUCATION.............................................................................63
2.12 ECONOMIC ACTIVITY, INCOME, AND EXPENDITURE.................................70
SECTION 3: A NATIONAL BASIC INCOME GRANT.....................83
I
3.1 AFFORDABILITY...........................................................................83
3.2 SUSTAINABILITY..........................................................................86
3.3 CASH TRANSFERS AND ECONOMIC DEVELOPMENT....................................89
3.4 LOCAL ECONOMIC DEVELOPMENT......................................................94
3.5 CONCLUDING REMARKS.................................................................96
II
Index of Photographs
Photo 1: Plastic and corrugated zinc were the main building materials
in Otjivero (April 2007).............................................................20
Photo 2: The BIG as a right............................................................21
Photo 3: N$ 100 - making a difference...........................................22
Photo 4: BIG payout through NamPost savings accounts...............23
Photo 5: Dr. Hage Geingob, the first to donate to the BIG Pilot Project
Fund.......................................................................................24
Photo 6: Ms. Emilia Garises, 55, mother of 7 children, head of
household. (Before the BIG)...........................................................26
Photo 7: Desperation before the BIG..............................................27
Photo 8: Before BIG.......................................................................28
Photo 9: Housing before BIG..........................................................29
Photo 10: Emilia Garises - making dresses with material she bought
from the BIG..................................................................................32
Photo 11: Otjivero-Omitara elected its own BIG Committee...........38
Photo 12: Sister Mbangu of the government clinic.........................57
Photo 13: Johannes Goagoseb in prison, November 2007..............60
Photo 14: Parents of Johannes Goagoseb (Nov 2007).....................61
Photo 15: Johannes Goagoseb - reunited with his family (July 2008)
......................................................................................................62
Photo 16: The Primary School in Otjivero.......................................64
Photo 17: The school's reports show a 90% payment rate of school
fees after the introduction of the BIG.............................................66
Photo 18: Proud to be at school.....................................................67
Photo 19: Enrolment at the cre`che increased from 13 to 52 after BIG
......................................................................................................68
III
Photo 20: School performance and attendance improved after the
BIG................................................................................................69
Photo 21: Joseph Ganeb started a brick making business.............75
Photo 22: Dress making became one of the new businesses in
Otjivero..........................................................................................76
Photo 23: Baking bread: N$1 per roll - daughter of Frida Nembwaya
......................................................................................................77
Photo 24: BIG created small business opportunities......................78
IV
Abbreviations
AIDS Acquired Immune Deficiency Syndrome
ARVs Antiretrovirals
BIEN Basic Income Earth Network
BIG Basic Income Grant
CBN Cost of Basic Needs approach
CCN Council of Churches in Namibia
DfSD Desk for Social Development, Evangelical Lutheran
Church in the Republic of Namibia
ELCRN Evangelical Lutheran Church in the Republic of Namibia
HIV Human Immunodeficiency Virus
LaRRI Labour Resource and Research Institute
LWF Lutheran Word Federation
MDG Millennium Development Goal
NamPost Namibian Post Office
NAMTAX The Namibian Tax Consortium
NANASO Namibia Network of AIDS Service Organisations
NANGOF Namibian NGO Forum
NHIES Namibian Household Income and Expenditure Survey
NUNW National Union of Namibian Workers
STD Sexually Transmitted Disease
UEM United Evangelical Mission
WHO World Health Organisation
V
Foreword
When we came to Otjivero-Omitara in July 2007, one woman with
the name of Emilia Garises told us "Some days we don't have anything
[to eat] and we just go and sleep and get up again without eating."
Otjivero-Omitara before the introduction of the BIG was typical of
how many people still live in Namibia today. On a daily basis, we are
faced with the situation of sheer hunger next to incredible wealth.
But in Otjivero-Omitara something has changed dramatically, and I
would like to put this in the context of the miracle of the feeding of
the five thousand (Lk 9,10-17). When Jesus fed all these people with
five loaves of bread and two fish, we as modern rational, economically
minded people always think about how one could divide up five
loaves of bread for so many people and yet everybody could get
enough? With the BIG pilot project, we have come to a completely
different understanding of this miracle, due to our own experience.
The miracle lies in the sharing! The breaking of bread together. Jesus
shared unconditionally, without saying: you look needy and you
don't, you are deserving and you are not, you need to stand in this
queue and you must not. No, when you share bread you give to
everybody, unconditionally, without so-called targeting - exactly like
the BIG. And when you share, people open up, you create an opportunity
and you create a community, and people start to give. The
miracle is not about the arithmetic of dividing five loaves of bread
among 5000 people, but the miracle is that if you break bread together,
people start to open up and to share what they have. That is
all: People started to contribute, and this is why you had more than
you had before.
The sense of community makes people take ownership and responsibility.
Just what Hermanus Coetzee expressed to us in Otjivero-
Omitara after the introduction of the BIG: In my house there are
many people. We are 28 and at pay-out we all contribute money for
food. We give the money to granddad and grandmother and we are
sitting together and draw up a list of the things to buy and one of us
has to travel with the train either to Windhoek or Gobabis to go buy
VI
the food in bulk. We only travel once a month and we buy enough for
the month and some of the small items we need we buy at the local
shop and shebeens.
I would also like to put the concerns that a BIG could create dependency
and a culture of laziness into a theological context: Before
the pilot project started, opponents said that if you give people
money, and especially poor people, they will sit down and become
lazy. If you receive Manna from heaven (Ex 16), why should people
work? The results of the research presented here, refute this claim.
Moreover, if you look in depth at Exodus 16, the people of Israel in
the long journey out of slavery, they received manna from heaven.
But, it did not make them lazy, instead, it enabled them to be on the
move to travel through the desert. In Namibia, we know how harsh
the circumstances of the desert can be. In this context nobody
would say, the manna made the Israelites dependent. To the contrary,
it enabled them to move. And one might ask, why did the
LORD not give them apple trees for example? Because he wanted
them to move, you can pick up the manna and go. You can move
out of the harsh realities of slavery and dependency - just like the
BIG, you can pick it up and move, not being forced to stay at a certain
location or in a particular condition. The BIG, like the manna,
is freeing people to move and take ownership of their economic affairs.
This is not a trap, but a precondition on the long and hard
journey to the promised land. We have seen just that in Otjivero-
Omitara. Look at Frida Nembwaya, who, when receiving the BIG,
started to bake traditional rolls for just N$1. Currently she is baking
200 rolls a day, seven days a week. People in Otjivero-Omitara now
have the money to buy from her. She currently considers to extend
her shack and wants to employ somebody. She also added a small
braiding business and sells local sausages and recharge vouchers
for cellphones. The Manna works, she is moving, so much so that
she wrote on all the sides of her newly-built zink house: "Good life
after struggle".
VII
I am convinced that the BIG is not only able to eradicate destitution,
hunger and malnutrition, but that it lays a strong foundation
for economic empowerment, responsibility and ownership taking.
The BIG, by restoring the human dignity of people, frees people to
become active and proud members of this society. It is my sincere
hope that this dream did not only become true for the people of
Otjivero-Omitara, but indeed for the whole of Namibia.
Bishop Dr. Zephania Kameeta
24 April 2009
VIII
Reader's guide to the report
This report is part of a series of publications on the Basic Income
Grant in Namibia. It reflects the results of the Pilot Project in
Otjivero-Omitara in particular. This one year report attempts to give
an overview over the new findings, and possible lessons for national
implementation of a BIG in Namibia.
For better usability this report summarizes, in parts repeats and
only updates sections, which have been published before. In order
to avoid cumbersome referencing to our own work, the references
are given here in the beginning1:
Haarmann, Claudia; Haarmann, Dirk; Jauch, Herbert; Mote
Hilma et al 2008. Towards a Basic Income Grant for all. Basic
Income Grant Pilot Project. First Assessment Report, September
2008. Windhoek.
Kameeta, Zephania; Haarmann, Claudia; Haarmann, Dirk; Jauch,
Herbert 2007. Promoting employment and decent work for all -
Towards a good practice model in Namibia. - Research Paper -
Presentation to the United Nations Commission for Social Development.
Windhoek
Haarmann, Claudia; Haarmann, Dirk (ed.) 2005. The Basic Income
Grant in Namibia. Resource Book. Windhoek.
This report can be read as a comprehensive publication, without the
need to have read all earlier reports. We trust that it provides a
basis for further discussions and more importantly for the implementation
of a nationwide BIG in Namibia.
1 All of them are available for download on the Namibian BIG Coalition web page:
IX
Acknowledgements
This study would not have been possible without the active support
of residents of Otjivero-Omitara. A special word of thanks must go to
the BIG Committee, which the community elected and which
rendered invaluable assistance in the process of facilitating the BIG
payouts and implementing this study. The committee consists of:
● Director: Mr. S. S. Aigowab (Community leader)
● Dep. Director: Ms. R. Jeremia (Principal)
● Chairperson; Mrs. E. Gawaxab (Teacher)
● Secretary: Ms. C. B. Hambira (Constable)
● Under Secretary: C. Molelekeng (Health Officer)
● Public Relation Officer: Sgt. T. Kuutondokwa (S.C)
● Under Public Relation Officer: K. Kamperipa (leader)
● The contributing officers of the BIG committee are:
● Ms. P. Shiweda (Shebeen owner)
● Ms. M. Moliliking (Shebeen owner)
● Mr. J. !Ganeb (PPRC)
● Ms. R. Tjiho (Attending member)
● Mr. S. Murangy (Attending member)
● Ms. T Nehola (Attending member)
● Ms. B. //Hamases (Attending member)
● Mr. M. Shoombe (Attending member)
● Mr. H. Klaasen (Church leader)
We are also grateful to all households and residents of Otjivero-
Omitara, who on a continuous basis have been willing to be interviewed
and to share their life stories with us. Their experiences
touched us deeply. A special word of thanks must go to all our "key
X
informants" who shared their knowledge and experiences with us.
They are:
● Ms. F. Mbangu (Nurse)
● Ms. B. Nakanyala (Nurse)
● Ms. R. Jeremia (School Principal)
● Mr. E. Gawachab (Teacher)
● Mr. Thomas (Station Commander)
● Mr. H. KoÅNhler (Bottle store/general dealer)
We wish to thank Patrick Bock; Nicola Diergaardt; Stephane Diergaardt;
Rev. Wilfred Nico Diergaardt; Asino Erastus; Maria Garises;
Jafet //Garoeb; Elton Imeme; Fabian Jauch; Lionel Kamburute;
Muniovina Katjimune; Rev. Petrus #Khariseb; Petrulieth #Khariseb;
Elton /Khoeseb; Bennie Muroko; Lee Ngurare; Lo-Rain Shiimi; Tangeni
Shindondola; Philip Tjerije; Israel Tobias and Cherlon Xamises
for their commitment and dedication shown during the field interviews
and data entry. For the data entry for the baseline study, we
are indebted to Heide and Gerhard Haarmann.
The research is accompanied by an International Advisory Group
whose invaluable comments, contributions and support are highly
appreciated.
This pilot project and the study were only possible through the financial
and administrative commitments, dedications and outstanding
efforts of all members of the BIG Coalition in Namibia. In addition,
the project received financial and administrative support from
Bread for the World (BftW, Germany), the Evangelical Church in
Rhineland (EkiR, Germany), the Evangelical Church in Westfalen
(EkvW, Germany), the Friedrich Ebert Foundation (FES, Namibia Office),
the Lutheran World Federation (LWF, Switzerland), the Lutheran
Communion in Southern Africa (LUCSA, South Africa), the Kirchliche
Arbeitstelle SuÅNdliches Afrika (KASA, Heidelberg) in collaboration
with the Blumhardt Congregation in Heidelberg and the United
Evangelical Mission (UEM, Germany). Many individuals and businesses
in Namibia and around the world have contributed financially
to the BIG pilot. The donations did not only enable the successful
implementation of the pilot, but enough finances have been
secured for more than the anticipated two year period. Without this
overwhelming support, the pilot project and this study would not
XI
have become a reality. The BIG Coalition hereby wishes to extend a
special thank you and acknowledgement to all who contributed.
The pilot project attracts an enormous amount of attention, not only
in Namibia, but worldwide. The pilot is broadly covered and regularly
reported about in the electronic and print media, as well as on
local and international TV, and in major newspapers and weeklies in
South Africa, Britain, Germany, the Netherlands, Norway, Sweden
and the US. This attention has resulted in many visits by journalists,
news crews, activists, students and politicians to the BIG Coalition
and the community of Otjivero-Omitara. This has placed the
community under great pressure and the BIG Coalition would like
to record its gratitude for the hospitality displayed by the community
during this time.
XII
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
In January 2008, the Basic Income Grant (BIG) pilot project
commenced in the Otjivero-Omitara area, about 100 kilometres
east of Windhoek. All residents below the age of 60 years receive
a Basic Income Grant of N$100 per person per month, without
any conditions being attached. The grant is being given to every
person registered as living there in July 2007, whatever their
social and economic status.
This BIG pilot project is designed and implemented by the Namibian
Basic Income Grant Coalition (established in 2004)2 and is
the first universal cash-transfer pilot project in the world. The
BIG Coalition aims to practically pilot the Namibian Government's
NAMTAX recommendation of a BIG for Namibia. Thus the
BIG Coalition regards this project as the first step towards a BIG
for all. The BIG Coalition consists of four big umbrella bodies in
Namibia, namely, Council of Churches (CCN), the Namibian
Union of Namibian Workers (NUNW), the Namibian NGO Forum
(NANGOF) and the Namibian Network of AIDS Service Organisations
(NANASO). Funds to start the pilot project were raised
through voluntary contributions from supporters of the idea
from all sections of Namibia's society, and by support from
people, churches, organisations and donors in other countries.
The BIG pilot project will run for a period of 24 months up to
December 2009.
The effects of the BIG pilot project are evaluated on an on-going
basis. Four complementary methods were used. First, a baseline
survey was conducted in November 2007. Second, panel surveys
were conducted in July and November 2008. Third, information
was gathered from key informants in the area. Fourth, a series of
detailed case studies of individuals living in Otjivero-Omitara
was carried out.
2 The Evangelical Lutheran Church in the Republic of Namibia (ELCRN) with
its Desk for Social Development (DfSD) is the legal administrative and financial
home responsible for the implementation of the BIG Pilot Project on
behalf of the BIG Coalition.
13
EXECUTIVE SUMMARY
This report presents the socio-economic results after the implementation
of the BIG for 12 months. The key findings include
the following:
➢ Before the introduction of the BIG, Otjivero-Omitara was
characterised by unemployment, hunger and poverty.
Most residents had settled there because they had
nowhere else to go, their lives were shaped by deprivation
and they had little hope for the future.
➢ The introduction of the BIG ignited hope and the community
responded by establishing its own 18-member
committee to mobilise the community and to advise residents
on how to spend the BIG money wisely. This suggests
that the introduction of a BIG can effectively assist
with community mobilisation and empowerment.
➢ As the BIG was only introduced in one particular location,
there was a significant migration towards Otjivero-
Omitara. Impoverished family members moved into
Otjivero, attracted by the BIG, even if migrants themselves
did not receive the grant. This points to the need
to introduce the BIG as a universal national grant in order
to avoid migration to particular regions, towns or
households.
➢ The migration to Otjivero-Omitara affected the data obtained
for this study. Per capita income from the BIG
dropped from N$ 89 per month in January 2008 to N$ 67
in November 2008. We thus analysed the impact of the
BIG, taking the influence of migration into consideration.
➢ Since the introduction of the BIG, household poverty has
dropped significantly. Using the food poverty line, 76% of
residents fell below this line in November 2007. This was
reduced to 37% within one year of the BIG. Amongst
households that were not affected by in-migration, the
rate dropped to 16%. This shows that a national BIG
would have a dramatic impact on poverty levels in Namibia.
➢ The introduction of the BIG has led to an increase in
economic activity. The rate of those engaged in incomegenerating
activities (above the age of 15) increased from
44% to 55%. Thus the BIG enabled recipients to increase
their work both for pay, profit or family gain as
well as self-employment. The grant enabled recipients to
14
EXECUTIVE SUMMARY
increase their productive income earned, particularly
through starting their own small business, including
brick-making, baking of bread and dress-making. The
BIG contributed to the creation of a local market by increasing
households' buying power. This finding contradicts
critics' claims that the BIG would lead to laziness
and dependency.
➢ The BIG resulted in a huge reduction of child malnutrition.
Using a WHO measurement technique, the data
shows that children's weight-for-age has improved significantly
in just six months from 42% of underweight
children in November 2007 to 17% in June 2008 and
10% in November 2008.
➢ HIV positive residents' access to ARVs was hampered by
poverty and a lack of transport before the BIG was introduced.
The BIG enabled them to afford nutritious food
and gain access to the medication. This was further enhanced
by government's decision to make ARVs available
in Otjivero, freeing residents from the need to travel to
Gobabis.
➢ Before the introduction of the BIG, almost half of the
school-going children did not attend school regularly.
Pass rates stood at about 40% and drop-out rates were
high. Many parents were unable to pay the school fee.
After the introduction of the BIG, more than double the
number of parents paid school fees (90%) and most of
the children now have school uniforms. Non-attendance
due to financial reasons dropped by 42% and this rate
would have been even higher without the effects of migration
towards Otjivero-Omitara. Drop-out rates at the
school fell from almost 40% in November 2007 to 5% in
June 2008 and further to almost 0% in November 2008.
➢ The residents have been using the settlement's health
clinic much more regularly since the introduction of the
BIG. Residents now pay the N$4 payment for each visit
and the income of the clinic has increased fivefold from
N$ 250 per month to about N$ 1,300.
➢ The BIG contributed to the reduction of household debt
with the average debt falling from N$ 1,215 to N$ 772
between November 2007 and November 2008. Savings
increased during that period, which was reflected in the
15
EXECUTIVE SUMMARY
increasing ownership of large livestock, small livestock
and poultry.
➢ The BIG has contributed to a significant reduction of
crime. Overall crime rates – as reported to the local police
station – fell by 42% while stock theft fell by 43%
and other theft by nearly 20%.
➢ The introduction of the Basic Income Grant has reduced
the dependency of women on men for their survival. The
BIG has given women a measure of control over their
own sexuality, freeing them to some extent from the
pressure to engage in transactional sex.
➢ The criticism that the BIG is leading to increasing alcoholism
is not supported by empirical evidence. The community
committee is trying to curb alcoholism and has
reached an agreement with local shebeen owners not to
sell alcohol on the day of the pay-out of the grants.
➢ The BIG is a form of social protection, which reduces
poverty and supports pro-poor economic growth. As a
national policy it would greatly assist Namibia in achieving
the Millenium Development Goals to which the country
has committed itself.
➢ The costs of a national BIG in Namibia are substantial.
The net costs will be between N$ 1,2 – 1,6 billion per
year, equivalent to 2,2 – 3% of Namibia's GDP. There are
various options to finance such a national grant. A moderate
adjustment of VAT combined with an increase in
income taxes is one option. This would benefit all middle
and lower income households in terms of available incomes.
Other financing options include a re-prioritisation
of the national budget and the introduction of a special
levy on natural resources.
➢ An econometric analysis revealed that Namibia's tax capacity
exceeds 30% of the national income. The current
collection rate is below 25% and thus Namibia's excess
capacity to raise tax revenue significantly exceeds the
net costs of a Basic Income Grant. This makes the BIG
affordable in Namibia.
➢ A national BIG would have several medium to long-term
benefits. Based on the developments in Otjivero-Omitara,
it is safe to argue that the BIG will reduce poverty
16
EXECUTIVE SUMMARY
and unemployment, increase economic activities and
productivity, improve educational outcomes and the
health status of most Namibians.
17
Section 1: The BIG a small project with a large aim
Section 1: The BIG a small project
with a large aim
1.1 Introduction to the Pilot Project
In 2002, the Namibian Government's Tax Commission
(NAMTAX) proposed a universal grant along the lines of
a Basic Income Grant (BIG), to be financed out of a progressive
expenditure tax on the affluent. This marked a
turning point in public consideration.
In 2004, concerned with the pace of poverty reduction,
in spite of many good efforts, and a public commitment
to reduce it by the Government of Namibia, a cross-section
of Namibian society, from all walks of life and all
shades of political opinion, set up a Coalition to promote
a BIG for all Namibians.
The Coalition brought different umbrella bodies together.
This includes the Churches – represented by the
Council of Churches (CCN) - the trade unions – represented
by the Namibian Union of Namibian Workers
(NUNW), the Namibian NGO Forum (NANGOF) and the
Namibian Network of AIDS Service Organisations (NANASO).
The Evangelical Lutheran Church in the Republic
of Namibia (ELCRN) with its Desk for Social Development
(DfSD) is the legal administrative and financial
home responsible for the implementation of the BIG Pilot
Project on behalf of the BIG Coalition. Besides the
BIG Coalition many other groups and numerous individuals,
including local businesspeople, churches,
donors, and international agencies gave support and
encouragement. Some Government Ministers and senior
officials have also shown interest and indicated their
willingness to develop a more universalistic system of
social protection and economic empowerment.
The proposal developed by the BIG Coalition – following
the NAMTAX recommendation – is that every Namibian
Namibia is a
country with
one of the
highest
levels of income
inequality
in
the world.
In 2002, the
Namibian
Government's
Tax
Commission
(NAMTAX)
proposed a
universal
grant along
the lines of
a Basic Income
Grant
(BIG).
Every Namibian
should
have a citizenship
right to a
Basic Income
Grant.
18
1.1 Introduction to the Pilot Project
should have a citizenship right to a Basic Income Grant
until she or he becomes eligible for the government
pension at 60 years. The level of the BIG should not be
less than N$ 100 per person per month. Given that the
Namibian old-age pension is a universal grant for all
men and women over the age of sixty, and that the
take-up of that is nearly 100%, the BIG should be paid
to all those men, women and children under the age of
60. The BIG is a cash transfer, whereby the recipient
can choose how to spend the money. It is an act of empowerment,
of giving people enhanced freedom and
personal responsibility. It is not a gesture or an act of
charity that potentially degrades. It is providing people
with a right.
1.2 How BIG was piloted in
Otjivero-Omitara
In 2007, the BIG Coalition decided to implement a pilot
project to move the policy debate forward and to produce
real evidence of the benefits of a BIG. The Namibian
BIG pilot is the first universal cash transfer pilot
project in the world.
The experience of other countries showed that national
programmes have been successfully implemented when
pilots have proven their viability. For example, a pilot
project in Haiti, Rwanda and South Africa demonstrated
that antiretroviral treatment could be provided
effectively to poor people – even those in deep rural
areas. This helped change national and international
policy, thereby paving the way for the dramatic global
roll-out of antiretrovirals (ARVs). The BIG Coalition
hoped that by operationalising a BIG pilot project, Government
leaders and others could see how the BIG
could be transformed into a national programme.
After careful examination of several villages in Namibia,
the site chosen for the BIG pilot project was the
Otjivero settlement and the Omitara 'town' in the Omitara
District. Otjivero-Omitara was selected for its manageable
size, accessibility, and poverty situation.
The Namibian
BIG pilot
is the first
universal
cash transfer
pilot project
in the
world.
19
Section 1: The BIG a small project with a large aim
Otjivero was known for its bad reputation amongst the
local farmers as a hot-bed of criminal activities.
Omitara is located some 100 kilometres east of Windhoek.
People (mainly retrenched farmworkers) started
settling in Otjivero about 5 km away from Omitara on
government-owned land in 1992. A feature of the area
is the proximity to a large dam that supplies water to
Windhoek and surrounding areas. Unusually, the
people in Otjivero have access to free water supply, but
the area is impoverished, prone to diseases, such as TB
and HIV/AIDS, and struggling to subsist as a viable
community. In addition, the development of the settlement
has been controversial from the beginning and
there has been persistent conflict with the surrounding
commercial farmers because of illegal hunting, trespassing
and the collection of firewood. There was no
reason to think that its choice as the site for the BIG
pilot made it more or less likely to succeed there than
in other parts of the country.
The pilot was implemented as follows: Every resident
under the age of 60 living in Otjivero-Omitara receives
N$ 100 each month from January 2008 until December
Photo 1: Plastic and corrugated zinc were the main building materials
in Otjivero (April 2007)
Every resident
under
the age of
60 living in
Otjivero-
Omitara receives
N$100 each
month from
January
2008 for two
years, ending
in
December
2009.
20
1.2 How BIG was piloted in Otjivero-Omitara
2009. Nine hundred and thirty residents got this grant
of N$ 100 without any condition. The money for children
and youths up to the age of 21 was paid out to a
person designated as their 'primary care-giver' which by
default is usually the mother.
In the period of two years, the aim was to monitor and
evaluate the effects of BIG on individuals living in the
area and on the community overall. The evidence was
to be made available publicly to provide a basis for a
constructive debate based on empirical evidence.
1.3 Implementation of the BIG
Photo 2: The BIG as a right
21
Section 1: The BIG a small project with a large aim
In the first 6 months, the practical payout of the BIG
followed the methodology and the experience of the old
age pension payout in Namibia. The recipients received
a 'smart card' which contains the names, ID numbers
and the picture of the recipients as well as a microchip
containing the birth date, fingerprints and information
on the amount and history of receiving the grant. The
system also makes provision for a 'procurator', who is a
person appointed by the recipient, who can receive the
grant on his/her behalf by means of fingerprint identification,
if for some reason the person cannot collect it
personally. The company who managed the grant payouts
for the first six months, United Africa, brought the
grants by vehicle to the designated pay-out point. The
vehicle was fitted with a cash dispenser and accompanied
by an armed security guard. The recipient placed
the card in the cash dispenser and identification was
done via fingerprints. The date and place of payout was
then written on the microchip for record keeping and to
prevent double payment.
Since July 2008, the Namibian Post Office (NamPost) is
conducting the pay-out of the grant via its Post Office
smart card savings account system. Every recipient of
Photo 3: N$ 100 - making a difference
Every recipient
of the
BIG has a
saving account
with
NamPost
into which
the grant.
22
1.3 Implementation of the BIG
the BIG now has a saving account with NamPost into
which the grant is paid on the 15th of each month. This
system has the advantage of getting every recipient into
the formal banking system. This enables the recipients
to decide when, where, and how much of the grant
should be withdrawn. It avoids the potentially stigmatising
queueing for the cash pay-out.
The BIG Coalition registered the whole community on
31 July 2007. Each and every household was visited,
all members of the households were identified by
means of identification documents3 and everybody below
the age of 60 was registered for the BIG. The registration
was done in one day in order to avoid in-migration
to the settlement. Anybody who moved to Otjivero-
Omitara after 31 July was not eligible to receive the
BIG. For children under the age of 21, the household
identified a primary care-giver to receive the grant on
the minor's behalf.
3 This included any Namibian identification document like IDs,
Birth certificate, Driver's licence, Voter's Card, etc. but also
Baptismal card as many people living in Otjivero-Omitara do
not have any of the national identification documents.
Photo 4: BIG payout through NamPost savings accounts
23
Section 1: The BIG a small project with a large aim
The project received international support from the
General Secretary of the Lutheran World Federation,
Dr. Ishmael Noko, Archbishop Desmond Tutu, the General
Secretary of the United Evangelical Mission (UEM),
Dr. Fidon Mwombeki, and from Senator Eduardo
Suplicy, (Sao Paolo, Brasil)
The fund-raising campaign for the pilot was launched
in August 2007. Namibia's first Prime Minister and current
Minister of Trade and Industry, Dr. Hage Geingob,
was the first person to pledge support for the BIG during
the event and generously donated money covering
two grants for one year. Other committed individuals
and donors followed his example and enough finances
have been secured for the anticipated two year BIG pilot
project.
1.4 Methodology
The BIG Coalition committed itself to carefully evaluating
the pilot project in order to assess the impact of the
BIG and to advise national policy-makers. Ideally, a
survey of other areas at the same time should have
been conducted ('control group'). However, this is not
only statistically very difficult, given the particular fea-
The BIG Coalition
committed
itself
to carefully
evaluating
the pilot
project in
order to assess
the impact
of the
BIG and to
advise national
policymakers.
Photo 5: Dr. Hage Geingob, the first to donate to the BIG Pilot Project
Fund
24
1.4 Methodology
tures of Otjivero-Omitara, but also ethically problematic.
Therefore, a four-fold research methodology was adopted,
drawing on four types of data.
First, a baseline survey of the settlement area was conducted
in November 2007, two months before the first
pay-out of the BIG. This survey collected retrospective
and current data on the social and economic situation
of the residents, including health and nutritional data.
Second, a panel survey was conducted in July 2008,
covering the same households and individuals as in the
baseline survey. The panel survey was repeated by a resurvey
in November 2008.
Third, information was gathered from key informants
living in or near the settlement area such as the local
nurse, the police chief, local leaders and shop keepers.
Fourth, a set of case studies of particular individuals
was collected in order to provide a picture of human life
in Otjivero- Omitara. These are described in the next
section. Aspects of how BIG changed their lives are recorded
and quoted throughout the report. The individuals
agreed that their real names and pictures are published.
This is a brave commitment towards the project.
The whole community of Otjivero-Omitara has been registered
and is voluntarily participating in the pilot project.
The baseline survey of November 2007, and the
panel surveys of July and December 2008 were successfully
completed. Thus, an assessment of the various
effects of the BIG could be made.
25
Section 2: Impact Assessment
Section 2: Impact Assessment
2.1 Realities of poverty before the
BIG
The inhabitants of Otjivero-Omitara are diverse. The
majority of the adult population were not born in
Otjivero-Omitara and many lived difficult lives. The following
statements and quotes exemplify the experiences
of life in Otjivero-Omitara before the introduction
of the BIG, painting a picture of suffering and deprivation.
In November 2007, the people said the following about
their daily living conditions:
Unemployment, hunger and poverty are the biggest
problems. Some days we don't have anything (to
Photo 6: Ms. Emilia Garises, 55, mother of 7 children, head of
household. (Before the BIG)
"We are
really
hungry."
(Emilia Garises)
26
2.1 Realities of poverty before the BIG
eat) and we just have to go and sleep and get up
again without eating. We are really hungry. (Emilia
Garises)
Willemina Gawises 31, single mother of three:
There is a problem of unemployment and we don't
have money to travel to Gobabis and Windhoek to
look for work. I have three children, age 10, 13 and
a 7-months-old baby. Now I don't know where their
father is and I have no job or money to send them
back to school. I and my three children depend on
my unemployed parents for food and accommodation.
Sometimes I wish I was dead because I cannot
stand this type of life any more. I am supposed to
provide and protect my children and parents but I
am failing to do that. Life is very difficult here, we
live in poverty with no hope for the future.
My two boys were at "Koshuis" (Hostel) Gurichas
School, but they were expelled from school 7
months ago, because I failed to pay for their school
fees. It hurts me to see my children out of school.
They were very happy in school and it was difficult
Photo 7: Desperation before the BIG
"Sometimes
I wish I was
dead because
I cannot
stand
this type of
life any
more. I am
supposed to
provide and
protect my
children
and parents
but I am
failing to do
that."
(Willemina
Gawises)
27
Section 2: Impact Assessment
for them to adjust. I could see their pain and feel it,
they used to ask me "Mama wanneer gaan ons terrug
skool toe" (Mummy when are we going back to
school). The pain a parent has to go through knowing
that you cannot send them back because there
is no money is unbearable and very depressing. I
wish I did not have them.
Ms. Mbangu, nurse at the clinic of Otjivero:
The biggest problem is unemployment. There is no
work. When people look for work at the farms they
are asked: where are you from? When they say
from the Otjivero camp, they are sent back. They
are not given a job. Those who worked on the
farms before, are also lying around here now.
People are hunting so that they can live. If you are
working on a farm and you hunt a pig, they will
chase you away.
Mr. Gawachab, a teacher at the Otjivero Primary
School:
We ask N$ 50 per year for school fees but most
people struggle to pay that. Most of the learners are
more interested in the pots than in schooling (the
"Most of the
learners are
more interested
in the
pots than in
schooling"
(Gawachab,
teacher at
the Otjivero
Primary
School)
Photo 8: Before BIG
28
"The pain a
parent has
to go
through
knowing
that you
cannot send
them back
because
there is no
money is
unbearable
and very depressing.
I
wish I did
not have
them."
(Willemina
Gawises)
2.1 Realities of poverty before the BIG
children receive cooked pap at the school every
day). Many children stay away from school if they
do not receive food. Generally the interest in school
is very low among the learners. Some children
don't have school uniforms at all, others have uniforms
of other schools.
Mr. Thomas, Police station commander at the Omitara
Police Station:
There are no proper houses in the camp. People live
in shacks made up of drums or pieces of tents.
There are no jobs and people start some small business
to make a living. Running a shebeen is normally
the only way to make some money. Poverty
and unemployment lead to all the other conditions
like crimes, alcohol abuse, mushrooming of shebeen.
Photo 9: Housing before BIG
"People live
in shacks
made up of
drums or
pieces of
tents."
(Thomas,
Police station
commander)
29
Section 2: Impact Assessment
Willemina Gawises 31, single mother of 3:
We have a problem with HIV/ AIDS infections and
it is on the increase because of poverty. Many
people do not have access to ARV treatment and
neither nutritional food. One cannot expect poor
people to travel to Gobabis for treatment every
month.
2.2 Expectations for the BIG
Many inhabitants of Otjivero-Omitara expressed different
expectations for the BIG. Many made plans on how
they would resolve some of the problems they were facing.
In essence, the introduction of BIG was expected
to fight extreme poverty and hunger in private households
as well as in the community at large. The quotes
below highlight some of the expected changes:
Ms. Emilia Garises:
I have hope. If I get the N$ 800 I will buy maize
meal and other food; I will pay school fees; I will
perhaps buy materials and make clothes. I want to
make a bit extra so that I will not be hungry. I will
pay the school and also buy new clothes for the
children. I will also buy blankets and perhaps fix
my house. I will also try and make more vetkoeks
to sell and make some extra money. I want to put a
little money aside so that I don't have to struggle so
much if we have a death in the family. Perhaps I
can take out a funeral cover; they say it costs N$
20 per month. Life will really improve next year.
"We have a
problem
with HIV/
AIDS infections
and it
is on the increase
because
of
poverty."
(Willemina
Gawises)
"I have
hope. […] I
want to
make a bit
extra so
that I will
not be
hungry. […]
Life will
really improve
next
year." (Emilia
Garises)
30
2.2 Expectations for the BIG
Ms. Willemina Gawises:
With the BIG grant, there will be hope for us, at
least I will be able to buy my children food and
send them back to school. The money will mostly
be spent on food and school fees and uniforms.
Maybe I will be able to travel to Windhoek to look
for domestic work, because now I cannot look for
work. There is no money to travel there. Life will
change in Otjivero with BIG. Many people will have
food.
Mr. Gawachab, Schoolteacher at the Otjivero Primary
School:
The BIG will make it possible for families to pay
school fees and to buy school uniforms for the children.
Children will also have food and perhaps we
can even build a hostel.
Mr. Thomas, Station Commander:
I believe that through the BIG, poverty will be reduced.
The standard of living will be upgraded a
little but there are zero chances for people to find
jobs.
Ms. Mbangu, the nurse at the clinic explained how
poverty hinders access to health services and the fight
against HIV and AIDS. She was hopeful that the BIG
would facilitate access to the clinic and to anti-retroviral
drugs:
Most don't come to the clinic, because they do not
have N$ 4,-. They are sick, but they stay at home.
Not all people who are HIV positive are on ARVs because
they can't get transport to Gobabis. It cost
them about N$ 100 to take taxis from Otjivero to
Gobabis and back. Then they are hungry but have
nothing to eat. The BIG will be good for the people
here and will help them to pay N$ 4,- and also to
pay for transport to get the ARVs in Gobabis.
"With the
BIG grant,
there will
be hope for
us, at least
I will be
able to buy
my children
food and
send them
back to
school. "
(Willemina
Gawises)
"The BIG
will be good
for the
people here
and will
help them
to pay N$
4,- and also
to pay for
transport to
get the
ARVs in
Gobabis."
(Mbangu,
nurse at the
clinic)
31
Section 2: Impact Assessment
2.3 Voices of change
Many positive changes were observed in Otjivero-Omitara
immediately after the introduction of BIG. The impact
was visible on different levels, on individuals,
households, institutions and on the community. Most
people noted that their expectations as expressed in
the quotes above were met. The following quotes exemplify
the impact of the BIG on the people of Otjivero-
Omitara:
In June 2008, Ms. Emilia Garises explained how she
used the BIG money:
Since we get the BIG I bought materials and I am
making 3 dresses that I will sell. When I finish with
this one (shows an almost completed dress), I will
start with new ones. I sell a dress for N$ 150. I also
paid a deposit for new zinc sheets for my house. I
am paying them off. When you come again, you will
see the changes. I have a lot of plans. I was also
able to buy more food and have a photo showing
when we were shopping in the shop. We bought
mealie meal, tomato sauce, cooking oil and all that.
Photo 10: Emilia Garises - making dresses with material she
bought from the BIG
"I have a lot
of plans. I
was also
able to buy
more food
and have a
photo showing
when we
were shopping
in the
shop. I also
bought a 2-
plate stove
because we
have electricity
in the
house."
(Emilia Garises)
32
2.3 Voices of change
We bought from the shop in Omitara. I also bought
a 2-plate stove because we have electricity in the
house.
Willemina Gawises also spoke about the changes in her
life:
Things are really fine unlike before when I was
really suffering and struggling very hard. Last year
I used to be very depressed because I had to beg
all the time, now I have enough to eat. I am still unemployed
but at least I do not depend on my parents
any more for food and other things now I have
my own money. My children are back in school and
I am saving some money to be able to send them to
boarding school when they complete their primary
education here. The BIG has helped me and my
children a lot. I can now also travel to Windhoek in
search for work.
In June 2008, Ms. Mbangu the clinic nurse shared her
observations about the impact of the BIG on living conditions
in Otjivero-Omitara:
I ask people how they are living and they are eating
much better now. They tell me that things are
going a bit better. Some people have started selling
things like food, tobacco, clothing, cell phones, as a
source of income. One HIV positive woman now
buys materials and makes Nama dresses. We are
thinking of holding a competition to see what people
did with the BIG money. We want to give a prize
and this can motivate others.
2.4 Profile of Otjivero-Omitara
The evaluation study is based on a random sample of
about a quarter of Otjivero-Omitara's 200 or so households.
The baseline survey of November 2007 covered a
sample of 398 individuals in 52 households. The
sample consisted of slightly more females (51%) than
The sample
for the evaluation
study
was randomly
drawn, covering
about
50 out of
200 households.
"Things are
really fine
unlike before
when I
was really
suffering
and struggling
very
hard. […]
The BIG has
helped me
and my children
a lot. I
can now
also travel
to Windhoek
in
search for
work."
(Willemina
Gawises)
33
Section 2: Impact Assessment
males (which is roughly similar to the pattern in the
country (53% female). Likewise, the age distribution in
the sample was similar to that found in the country
overall, with a preponderance of young people. The
sample showed that the largest language group in
Otjivero-Omitara are those speaking Damara/Nama
(73%), followed by Afrikaans (10%), Otjiherero (8%),
Oshiwambo (6%), Rukwangali and Setswana (2%).
Migration
The total number of individuals in the sampled households
increased substantially over the period of the
study. The table below sheds some light on those
trends of in- as well as out-migration during 2008.
baseline Jul 08 Nov 08
In-migrants
(and as a % of
base-line population
for
households
present at the
beginning and
after a year
0% 17% 27%
Out-migrants as
% of base-line
population*
0% 7% 16%
Total numbers
moving as % of
baseline
0% 24% 43%
Table 1: In- and out-migration over 12 months
Some in- and out- migration is typical for a rural Namibian
community. Children come and go, depending on
family arrangements to take care of them and the availability
of schooling in the area. As the school in Otjivero
only caters for children up to Grade 7, some outmigration
of older children was to be expected. One also expected
some outmigration by adults looking for work
elsewhere. However, a 43 % in- and out- migration is
surprising.
There has
been an inmigration
of
27% into
Otjivero-
Omitara.
34
2.4 Profile of Otjivero-Omitara
The out-migration (16%) has been considerably smaller
than the in-migration (27%). Of those who left, the majority
were unemployed (33%) followed by children who
were full-time students (24%) and thirdly a group of
people, who were in employment (18%).
It is noteworthy that the people who left, were also taking
the BIG with them and thereby reduced the total
amount of the BIG spent in Otjivero-Omitara.
An in-migration of 27% into Otjivero-Omitara points to
the attraction of a community receiving the BIG, even
when the in-migrants themselves do not receive the
BIG. It seems many people came to Otjivero-Omitara
out of destitution and in order to somehow benefit from
the BIG paid to family members. This is remarkable,
since Otjivero-Omitara as an isolated rural area has
little attraction. The actual in-migration is likely to be
even higher than 27%, which only captures existing
households and not any new households that were established
during 2008.
Ninety-four percent of in-migrating children were below
15 years old and hence were eligible to attend the
Otjivero Primary School. Whether these children came
to the area to take advantage of the BIG-induced increase
in household income, or whether it was to take
advantage of the school (which is widely believed to
have improved as a consequence of greater school fee
recollection), the result was to put greater, and unexpected
pressure on the school.
It most cases, the extra people in the households put
an additional strain on household budgets. The following
table calculates the average per capita BIG in the
households over time, both with and without an inflation
adjustment:
An in-migration
of 27%
into
Otjivero-
Omitara
points to the
attraction of
a community
receiving
the
BIG.
The extra
people in
the households
put an
additional
strain on
household
budgets.
35
Section 2: Impact Assessment
Jan 084 Jul 08 Nov 08
Nominal N$ 89 N$ 75 N$ 67
Real (inflation
as per CPI
taken into account)
N$ 89 N$ 70 N$ 61
Table 2: Average per capita BIG
When the BIG was introduced in January 2008 at N$
100 per person, this resulted in an average per capita
increase of income of N$ 89 (as not everyone, namely
the pensioners qualified for the grant). This was reduced
through in-migration to N$ 75 within 6 months
and to N$ 67 within a year. Adjusted by overall CPI inflation5,
the per capita value of the BIG in the households
has been reduced to a mere N$ 62.
The migration patterns hold crucial lessons for the universal
implementation of a BIG in Namibia. The impact
of a targeted grant to only a certain section of the population
will be eroded since living arrangements are so
fluid that many unemployed and other dependent extended
family members may simply move to where the
money is. This is a well documented effect, already happening
with old-age pensions, where one or two old-age
pensions support entire households rather than just
the needs of elderly and retired people.
For the evaluation, however, the spending and impact
of the BIG in Otjivero-Omitara will increasingly become
harder to trace since the direct intended benefit per
capita is substantially diluted and reduced. A national
BIG would not suffer from these repercussions.
4 Note that the baseline study was conducted before the BIG was
paid out
5 Note the inflation on basic food items was drastically higher
than the overall CPI.
The migration
patterns
show
that a BIG
needs to be
introduced
universally,
since otherwise
benefits
to intended
beneficiaries
are
eroded
through inmigration
of
other poor
people.
36
2.5 Community Mobilisation
2.5 Community Mobilisation
When the BIG pilot project was still under discussion,
the Otjivero-Omitara community demonstrated a
healthy suspicion towards development aid and outside
'assistance', which they saw as short-term gestures and
ill-conceived projects. However, after speaking to the
community on the day of registration, the Bishop of the
Evangelical Lutheran Church in the Republic of Namibia
(ELCRN), Dr. Zephania Kameeta, was able to allay
some of their fears. As the chairperson of the BIG Coalition
in Namibia, his presence was important in helping
instil trust and enhance the credibility of the pilot project.
With registration for the BIG pilot, the community of
Otjivero-Omitara embarked on a process of mobilisation,
conscientisation and self-empowerment. It is important
to stress that this was an entirely organic process
initiated and developed by the community without
outside interference. The community decided to elect a
'BIG Committee' to guide the pilot project within the
community and assist the community and the BIG Coalition
wherever needed. In September 2007, an 18
member committee was elected at a community meeting.
It comprised the local teachers, the nurse, the police
as well as business people such as shebeen owners
and community members. Representation of language
and age groups was ensured.
The community felt that, unlike other projects, the BIG
pilot project gave them ownership of the process and
responsibility for the outcome. They felt that they had
been entrusted with the project and wanted it to have
the best possible impact on the lives of individuals and
the wider community. By definition an unconditional
universal cash transfer gives the recipient the choice of
what to do with the money. The community realised at
the outset that they had been given the opportunity to
make it work. It was clear to all BIG recipients that the
success or failure of the pilot project depended on
them.
According to the guiding principles of the BIG committee,
they were participating in a "little project with a
With registration
for
the BIG pilot,
the community
of
Otjivero-
Omitara embarked
on a
process of
mobilisation,
conscientisation
and
self-empowerment.
37
Section 2: Impact Assessment
large aim. The aim is to UPLIFT the 'life' of Omitara, then
Namibia, then Africa and at last the world" (BIG Committee,
2007)
In September 2007, this BIG committee set itself a high
standard by developing a strict code of conduct and
outlining a number of tasks for the committee and its
individual members. The committee elected a number
of so-called 'control officers'. The name 'control officer'
may appear, at first glance, to have a rather negative
connotation. However, the committee explained that
the name should support the seriousness of their tasks
in contrast to weaker labels like 'advisor' which, they
said, are known to be ineffective. 'Control officers' were
tasked with educating, conscientising and empowering
people in the community to make the best use of their
BIG payments. The 'control officers' are not there to
force people to spend the money in certain ways, but
rather to raise awareness and provide advice.
The committee was well aware of the widespread problem
of alcohol abuse and knew that this would receive
special attention during the pilot project. Accordingly,
shebeen owners were represented on the committee
and were asked to assist with their advice and coopera-
Photo 11: Otjivero-Omitara elected its own BIG Committee
38
2.5 Community Mobilisation
tion. This bore fruit when the shebeens agreed not to
open on the days the BIG was paid out. The challenge
of alcoholism was openly discussed from the outset and
addressed through a process of community mobilisation.
It was encouraging to see the powerful community mobilisation
happening in Otjivero-Omitara even before
the implementation of the BIG. The successful start in
January confirmed the sense of trust between the community
and the BIG Coalition. Due to the excellent organisation
and work of the committee, the BIG Coalition
has so far not experienced any problems in the cooperation
and communication with the community of
Otjivero-Omitara.
It should be mentioned that the BIG Coalition and the
research teams tried to make contact with the surrounding
commercial farmers in order to learn about
their views on the pilot project and the developments in
Otjivero-Omitara. However, the farmers have so far
been reluctant to engage with the process.
2.6 Dependency or dignity?
The BIG Coalition and the community of Otjivero-Omitara
has also had to deal with criticisms from those opposed
in principle to the BIG. One had hoped that the
results presented in the 6 months report could inform
the discussion, and in some cases it has. However,
there is a level of debate that occurs at a purely ideological
and emotive level which seems impervious to the
data.
These criticisms revolve around two core beliefs: that a
cash transfer is bad for people because it gives them
rights without responsibility; and that poor people are
not capable of spending the money wisely. On the eve
of a press conference, the BIG Coalition received an
email providing a typical example of such argumentation
(2nd November 2008). The person asked that the
email should be read as a contribution to the discussion
at the press conference, and we reproduce it here:
39
Section 2: Impact Assessment
"To All involved in the "BIG Project" (...)
The basic idea of the "Basic Income Grant" is commendable,
as we strive to alleviate poverty and create
a better future for the disadvantaged people in
our country. But how can you expect people to take
responsibility, exert discipline and respect, if they
have - some for generations! -not experienced ANY
of this in their upbringing since childhood? You
know, like the rest of us , what is going on in
poverty-stricken communities abusing women and
children under the influence of drugs and alcohol!
There is no place to sleep, no food, no love, no basic
living requirements - and now you expect people
to responsibly handle money they are getting for
nothing, no 'favour' or action asked in return? Even
in history, trading amongst the native people
meant: 'I give you something, you give me
something in return. (...)"
Besides the implicit racist (but all too common) assumptions
which underpin the above claims, the argument
boils down to two prejudicial assertions: Firstly,
that poor people in Namibia are so poor and damaged
that they are incapable of making rational spending decisions
to improve their lives. The results of the research
in Otjivero-Omitara speak directly to the first
claim: Poor people have spent the money wisely, child
malnutrition has fallen dramatically, school fees and
clinic fees are paid, houses have improved and incomeearning
activities have increased, helping to uplift others
through these 'second round' economic effects. It
was also found that the community organised itself to
help make the BIG project a success. In other words,
the BIG pilot project shows that there is good reason to
trust the poor to make the right decisions for themselves
rather than to write them off! They certainly
know what their priorities are.
As regards the second claim, i.e. that a BIG is a bad
idea because it gives people 'something for nothing', we
accept that a BIG is innovative in this respect, but argue
that its individual and social benefits are immense.
The criticisms
revolve
around two
core beliefs:
that a cash
transfer is
bad for
people because
it
gives them
rights
without responsibility;
and that
poor people
are not capable
of
spending the
money
wisely.
The BIG pilot
project
shows that
there is
good reason
to trust the
poor to
make the
right decisions
for
themselves
rather than
to write
them off!
40
2.5 Community Mobilisation
Trusting poor people to spend an unconditional grant
wisely restores dignity, is empowering in ways which
government-administered alternatives are not, and
saves a great deal of money by cutting out the layers of
bureaucrats and paper work which typically absorb a
large proportion of the funds allocated to targeted and
conditional programmes. Indeed, there is a strong case
for assuming that providing people with a BIG not only
improves their material circumstances, but promotes
dignity and socially responsible behaviour. As Otjivero
resident Jonas Damaseb told us:
"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."
The observation of one of researchers, Rev. P. #Khariseb,
during the first 6 months research echoes this
view :
During the case study interviews I generally observed
that in the people of Otjivero have regained
their human dignity during the first 6 months of the
BIG. Through regaining their human dignity, people
act more responsible: Their environment is clean
and from small to the elderly everyone is dressed
neatly. What a positive change!
The experience of the BIG pilot suggests that the universal
cash grant liberated people and the community
from the individually and collectively draining and devastating
impact of poverty. Many people living in
Otjivero-Omitara said that they had only survived previously
by asking and begging for food. This was profoundly
embarrassing and undermined their capacity to
have normal social interactions and the development of
constructive community relations and real community
spirit. The payment of the BIG has dramatically
changed this. Begging has basically stopped and people
reported that they can now visit and speak freely to
each other now, without the fear of being seen as a potential
beggar. Judging from the observations of com-
There is a
strong case
for assuming
that
providing
people with
a BIG not
only improves
their
material circumstances,
but promotes
dignity
and socially
responsible
behaviour.
The BIG liberated
people and
the community
from
the individually
and
collectively
draining and
devastating
impact of
poverty
41
Section 2: Impact Assessment
munity members, researchers and members of the BIG
Coalition, it would appear that a stronger community
spirit developed over the period of the first year of the
BIG.
Similarly, we would suggest that a spirit of pride and
responsibility was evident when the school fees were
paid at the beginning of the year. One example is the
case of a single father who was able, for the first time,
to pay his daughter's school fees. When he came to the
school, the teacher did not even know him, because he
had always avoided contact with the school because he
could not pay the school fees. When he paid, he said
proudly:
Now I want to pay for my child and because I have
paid for the school, I will ensure that she performs
well.
Note how he said that he, rather than the BIG, was
paying for the school fees. Precisely because it was his
choice to use the money that way, he got the benefit of
enhanced dignity and took on the responsibility of
making sure that his daughter justifies the expenditure
by working hard. If, instead of paying out a BIG, the
project had adopted a more targeted and paternalistic
approach of simply paying the school fees, then we
would have seen neither benefit. This is yet another example
of the individually and socially transformative
power of an unconditional cash transfer.
2.6 Alcohol
One of the variants of argument against a BIG claims
that a BIG is a bad idea because it will be spent on alcohol.
As is the case elsewhere in Namibia, there is an
alcohol problem in Otjivero-Omitara. Mr. KoÅNhler, the
bottle store/general dealer in Omitara, claims that the
problem got worse because of the BIG:
"My experience with BIG is that people buy some
food and then there is money left over and they
buy liquor...On BIG pay day people buy bread from
42
2.6 Alcohol
the shop and then they go over the liquor store and
buy Club Zorba – that is the killing petrol around
here. If I don't sell it to them, they will go to the shebeen
and buy it for 20% more... Before the BIG
there were 8 shebeens of which one had a license.
Now there are 16 shebeens in the camp. After the
BIG pay day, some people buy boxes of liquor
there. They later sell that liquor back door."
Mr KoÅNhler, however, mistakes the increase in his own
sales of alcohol on pay day for a general increase in alcohol
sales. The fact of the matter is that the other liquor
outlets had been persuaded by the community
leaders to close on BIG pay-days. Mr KoÅNhler was the
only shop not to comply with this request. The small increase
in liquor sales he experienced was simply because
he was picking up a small fraction of the demand
that was typically met by his competitors.
The research also found no evidence of an increase in
the numbers of shebeens nor an increase in the
turnover of existing shebeens. According to a shebeen
owner:
"The number of shebeens did not increase, in fact
there were 8 shebeens before and now there are 7.
We know there are many reports that the people
are spending the money on alcohol instead of buying
food but that is not true at all. We had a few
cases when things went out of control but that only
happened during the first pay-out. I would say,
some people got excited about the money. After
that, the [BIG] committee sat and had a meeting
with the community and after that nothing serious
happened again". (Adam Tjatinda, July 2008)
This was confirmed by the local police station, which
indicated that problems experienced after the first payout
day did not recur.6 However, the police expressed a
6 There was a report about fighting on the day of the first payout,
which turned out to be a conflict between people who did
not reside in Otjivero-Omitara. The police indicated that there
has been no repeat.
There was
no evidence
of an increase
in alcoholism
as
a result of
the BIG.
Likewise,
there is no
evidence of
an increase
in the number
of shebeens.
43
Section 2: Impact Assessment
concern about the possibility of alcohol abuse in
Otjivero-Omitara. This was supported by one of the residents:
"There are still people who are drinking and they
don't want to stop drinking like I did but a lot has
changed [since BIG]. Everybody can at least afford
to have food. When it is payout here we all travel to
Gobabis to go buy food in bulk and the train is always
full with people from Otjivero". (Hermanus
Coetzee, July 2008)
Alcohol abuse exists in Otjivero-Omitara as in any other
community in Namibia. The BIG is not able to solve
the problem, but there is also no evidence that it aggravates
it. However, the establishment of the BIG committee
and the discussion about the potential misuse of
BIG money for alcohol has triggered a conscientisation
process within the community. Shebeen owners are on
the BIG Committee and there are open discussions
about alcohol abuse. This should be regarded as a positive
development and a step into the right direction to
tackle the problem.
2.7 Crime
An important indicator of social conditions is the level
of crime. Some crimes are economic in nature. These
range from desperate actions in search of food, such as
illegal hunting (as described in Johannes Goagoseb's
story7), to theft and fraud. Other crimes, such as assault,
criminal injuria, reckless driving, malicious damage
to property and perjury are more general in nature
and not obviously or necessarily related to economic
conditions.
There has always been a history of crime in the area.
When interviewed in November 2007, the police station
commander commented on the crimes that typically occurred
in the area:
7 See 2.10 p. 60
44
2.7 Crime
"The criminal activities are mostly poaching, assault
and housebreakings. Poaching is the most common
one. Poverty and unemployment are the reasons
for these criminal activities. Otjivero is a tiny place
and there is no source of income there. Most people
hunt or poach just for survival… Poverty and unemployment
lead to all the other conditions like crimes,
alcohol abuse, mushrooming of shebeens. As you
can see, there are no proper houses in the camp.
People live in shacks made up of drums or pieces
of tents.
There are no jobs and people start some small business
to make a living. Running a shebeen is normally
the only way to make some money. However,
there is also the Namwater dam and some community
members catch some fish there that they
sell. Some people look for jobs in the farms but the
local farmers don't want people from the Otjivero
camp because they always accuse them of poaching
on their farms."
This problem was confirmed by the clinic's nurse:
"There are no jobs, no food or any activities for the
youth. They have to go hunting or stealing at
nearby farms to sustain themselves. When looking
for jobs at nearby farms, they don't get jobs because
[the farmers think they are] thieves. It seems
that all the farms surrounding Otjivero belong to the
same relatives. They are hostile to the Otjivero community
and have decided not to give anybody from
Otjivero employment."
The Big Coalition hoped that the introduction of the
BIG would reduce economic crime as people were
provided with a minimum standard of living. This, indeed,
has taken place.
According to official information provided by the Omitara
police station, 54 crimes were reported between 15
January 2008 (when the BIG was introduced) to end of
October 2008 while during the same period a year earli-
Reported
crimes to
the local police
station
were 36,5%
lower in the
10 months
after the
BIG was introduced
than during
the same
period the
previous
year. The
most dramatic
drop
in crime was
in illegal
hunting and
trespassing.
45
Section 2: Impact Assessment
er (15 January to 31 October 2007) 85 crimes were reported.
The Police statistics therefore reflect a 36.5%
drop in overall crime since the introduction of the BIG.
It should be borne in mind that this is so despite a considerable
in-migration of 27% into the area and an increase
in the number of people living there. This could
rather have led to an increase in overall crime.
As shown in the figure below, all categories of economic
crime fell substantially. The most dramatic fall was in
illegal hunting and trespassing, which fell by 95% from
20 reported cases to 1. Stock theft fell by 43% and other
theft fell by nearly 20% over the same period.
Change in other (non economic crimes)8 was statistically
insignificant over the period, but still decreased
from 28 to 27 cases. The new acting Police Commander
who came to Omitara in April 2008 confirmed this
trend.
This dramatic decrease and change in economic and
total crime was borne out in a number of statements
made by key informants. In the base line survey (i.e.
before the BIG), four out of five residents in Otjivero-
8 Non economic crimes comprise: assault, criminal injuria, reckless
driving, using a vehicle without permission, illegal possession
of a fire-arm, perjury.
Total repor ted crime
Stock Thef t
Other Theft
Illegal Hunting & Trespassing
Other Crimes
0
10
20
30
40
50
60
70
80
90 85
16
21 20
28
54
9
17
1
27
Comparision of Crime Cases - Omitara Police Station
15 Jan - 31 Oct 07
(before BIG)
15 Jan - 31 Oct 08
(w ith BIG)
46
2.7 Crime
Omitara reported that they had personally suffered
from a crime in the previous year – most of which were
economic crimes such as theft. Six months after the introduction
of the BIG, this had dropped to 60%, with
most crimes mentioned related to conflicts between
people rather than economic crimes. One year after the
BIG was introduced, the percentage of respondents experiencing
crimes had dropped even further to 47%.
Most (75%) survey respondents reported noticing a
change in the crime situation since the introduction of
the BIG. Reflecting the majority view on the subject,
two residents told us that economic related crimes had
fallen significantly.
"We don't hear any more people complaining of
hunger or asking for food. The theft cases have
also declined a lot. Many people bought corrugated
zinks and repaired their houses. We buy wood
most of the time and don't have many cases of
people stealing wood any more. Fighting and drinking
have also reduced and we don't hear of people
fighting any more" (Johannes !Goagoseb and Adolfine
!Goagoses, July 2008)
The BIG did not, of course, eliminate all crime. Assault
remains a problem and economic crimes such as theft
continue to occur, though on a lower level. The point,
however, is that BIG has significantly reduced crimes
relating to desperation (poaching, trespassing, petty
theft) and thus appears also to have improved the general
quality of life in the community.
2.8 Levels of poverty
Everyday life is a struggle to provide food for the
children. It hurts me to see my children out of
school. The pain a parent has to go through knowing
that you cannot send them back because there
is no money is unbearable and very depressing.
(Willemina Gawises Nov 2007)
Crime was
significantly
lower in the
ten months
after the introduction
of the BIG
compared
with the ten
months preceding
it.
47
Section 2: Impact Assessment
Voices like Willemina Gawises bear witness to the
depth of poverty in Otjivero-Omitara before the BIG was
introduced. This section tries to depict the depth and
the width of poverty before the BIG and the change
thereof, after its introduction.
The Namibian Government through its National Planning
Commission has introduced a national poverty
line in its latest publication called A review of Poverty
and Inequality in Namibia. (NPC, 2008:2-3) Government
needs to be commended for adopting an absolute
poverty line based on a Cost of Basic Needs (CBN) approach
guaranteeing comparability throughout Namibia.
The poverty line has been set at three different
monetary levels9:
1. A food poverty line at N$ 152 per capita per
month
2. A lower bound poverty line called the "severely
poor" at N$ 220 per capita per month
3. An upper bound poverty line called "poor" at N$
316 per capita per month.
The following two graphs show the food poverty line as
well as the lower bound line, defining the severely poor
for the people in Otjivero-Omitara. The first graph (blue)
reflects all households, while the second one (red) excludes
those households which were affected by substantial
migration10. )
9 The poverty lines are given by the NPC in 2003/4 monetary
terms and have been updated using the CPI for inflation. The
2003/4 values as given by NPC are 1. N$ 127; 2. N$185, 3.
N$262.
10 See above 33 Migration p. 34
48
2.8 Levels of poverty
Graph 2.8-1 shows that in November 2007, before the
introduction of the BIG, 86% of all people in Otjivero-
Omitara were below the lower bound national poverty
line (blue line) and thereby considered "severely poor".
This poverty level is much higher than the national average,
which the NPC calculates based on the NHIES
2003/04 at 13.8%. A massive 76% of people in
Otjivero-Omitara fell below the food poverty line(red
line), explaining the high incidents of child malnutrition11
. Through the Basic Income Grant and its economic
effects12 severe poverty has been reduced to 68%
and food poverty to 37% after one year. While food
poverty continuously declined over the study period,
gains on the lower bound poverty rate were slightly reversed
by 3% from July to November 2008. The following
graph shows the underlying reason to be the migration.
11 see below 50 Child malnutrition p. 53
12 see section 70 Income p.71
Graph 2.8-1
National poverty line
(all)
Nov 07 Nov 08
86% 65% 68%
76% 42% 37%
Jul 08
"Severely
poor"
Food
poverty line
Nov 07 Jul 08 Nov 08
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
49
In Nov 07
86% of all
people in
Otjivero-
Omitara
were below
the lower
bound national
poverty line
(blue line)
and thereby
considered
"severely
poor".
Section 2: Impact Assessment
Graph 2.8-2 pointedly shows that if households with
substantial migration are controlled for, the poverty
rate both in the lower bound as well as food poverty
have been declining over time. With the BIG, food
poverty in the household without substantial migration
was reduced to 16% and the percentage of severely
poor dropped to 43% If a Basic Income Grant was to be
introduced universally in Namibia, this is the graph adequately
showing the effect, as migration to a 'BIG area"
would not occur. A reduction of food poverty from over
70% to 16% speaks for itself and the voices of the case
studies express what a national BIG would mean to
poor people in Namibia.
2.9 Hunger and malnutrition
In November 2007, the nutritional situation of people
living in Otjivero-Omitara was bleak: 73% of house-
In November
2007, 73%
of households
indicated
that
they did not
always have
sufficient
food.
Graph 2.8-2
National poverty line
(controlled for migration)
Nov 07 Nov 08
97% 76% 43%
72% 24% 16%
Jul 08
"Severely
poor"
Food
poverty line
Nov 07 Jul 08 Nov 08
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
50
Controlled
for migration,
foodpoverty
was
reduced to
16% in one
year by the
BIG.
2.9 Hunger and malnutrition
holds indicated that they did not always have sufficient
food. Thirty percent reported a lack of sufficient food on
a daily basis, and 39% said this happened at least once
a week. Only 20% reported that they never experienced
food shortages.
When asked how they coped, almost half (48%) of the
respondents indicated that in times of food shortages
they went to friends and relatives in Otjivero-Omitara
asking for food, while 18% went to friends and relatives
outside Otjivero-Omitara. The nurse at the clinic observed:
"People borrow from each other to survive. Everyone
borrows from everybody else. That's how it is.
When people see that someone bought sugar, the
others come to ask for some of it. That's why it
does not last, because it has to be shared with the
other houses in the neighbourhood."
Another resident of Otjivero-Omitara described the dayto-
day struggle for food:
I live with my aunt and her family and we are 15 in
one household and no one earns a decent income,
we "zula" ['struggle'] to get food. We have nothing to
eat at all.
Good nutrition is essential for human well-being – especially
for children. When describing the situation in
November 2007, the local clinic nurse, Ms Mbangu,
highlighted their suffering:
"I have one case where a baby who is HIV positive
received sugar water instead of food. This baby is
just one month old. The mother can't breastfeed but
she also does not have food. This morning she
walked to the farm where her sister stays, just to
get some maize meal. Such a baby will have a low
weight and then we must send the baby to Gobabis…
Low weight is especially a problem with children
who are HIV positive although some others
are also under-weight. Some have relatives who
work elsewhere and send them some money or
maize meal. Many others go to sleep without eating
51
Section 2: Impact Assessment
and the children are so hungry. That's when you
don't know what to do and where to find food for
them."
This dire situation was illustrated in the shocking statistics
regarding weight-for-age (see below). The BIG has
helped improve the situation dramatically. This is,
without doubt, one of our most important findings.
Child Malnutrition (Weight for Age)
The World Health Organisation (WHO) provides information
on the distribution of 'weight for age' ratios we
should expect to see in an adequately nourished population.
Using this information as a benchmark, we can
compare the distribution of children in Otjivero-Omitara
with the WHO reference data to see how many
would be regarded as under- or over-weight for their
age.
Some children are naturally heavier or lighter than others,
so the WHO regards a range of weight for age ratios
as 'normal'. Only those children who fall significantly
below the median (mid-point) of the WHO's range of values
are classified as 'malnourished' and only those who
fall significantly above the median are classified as
'overweight'. The WHO uses 'standard deviation units'
or 'z-scores (which standardize the deviation from the
average normal distribution) to classify children as under-
or overweight for their age. In terms of this
scheme, a child with a z-score of 0 weighs exactly what
the WHO would expect, given his or her age. Children
with z-scores of between 1 and -1 are above and below
the median weight for age, but this difference is not regarded
as a problem, as it falls within the healthy distribution
of weight for age values. However, children,
who fall below -1 are seen as heading towards serious
malnutrition, and those below -2 are regarded as malnourished.
Likewise, children, who score above 2, are
regarded as unhealthily overweight for their age.
In November
2007, 42%
of the children
were
undernourished.
52
2.9 Hunger and malnutrition
In Otjivero-Omitara, 42% of the children measured13 in
November 2007 were malnourished (they had a z-score
of below -2). This was significantly worse than the average
in Namibia (where 24-30% of children under five
are reportedly malnourished).14 It is also well above the
30% mark, which the WHO regards as a very high prevalence
of malnutrition and which is the worst classification
in the WHO categories. Most (82%) of these children
were between the ages of 2 and 3.
In short, the weight for age, and height for age measures
indicated that the situation for Otjivero's-Omitara's
children was dire indeed. This is a human tragedy
because the damage caused to children by poor nutrition
under the age of five is irreversible. It is also an
economic and developmental disaster as poor childhood
nutrition undermines human capital development and
economic growth in the future.
In analysing the changes in the nutritional status it is
important to take the effect of migration into account.
This is because those children living in households
with substantial migration (e.g. between 3 and 11 in-migrants)
are likely to experience a drop in living standards
over the period, since the BIG is not paid universally.
Thus we first analysed the changes for children in
households without significant migration, followed by
households with 3 or more migrants.
Child malnutrition
Just six months after the introduction of the BIG, the
malnutrition situation of children under five years of
age had improved dramatically. The percentage of children
malnourished had dropped from 42% to 17%!
After one year, looking at the same age cohort in house-
13 The collection of biometric children's data was done on a voluntary
basis. It is noteworthy that all of the sampled children
came to the clinic and the trained nurse weighed them.
14 The 2007/8 Human Development Report states that 24% of
Namibian children are malnourished. see: http://hdrstats.undp.
org/countries/data_sheets/cty_ds_NAM.html). More recent
figures, not yet publicly released, suggest that the number for
2006 may be as high as 30% (quoted in The Namibian, 28.2.08)
53
Section 2: Impact Assessment
holds that were present at all three stages of our study,
no child had a z-score of below two. This implies no
malnutrition at all. However, this result must be
treated with some caution because the number of children,
which can be traced throughout the whole year
has shrunk due to migration. This necessarily increases
the standard error, when we compare distributions
across time. However, the clinic collected data for
all children below the age of 7 years from 2007 onwards,
so we have been able to extend our initial calculations
(based on children under 5 only) to include
these older children as well (see below). The graph below
shows how the distribution of weight for age has
become more 'normal' over time as the proportion of
malnourished children fell. The two-sample
Kolgmogorov-Smirnov test (to test for significant differences
between the distributions of z-scores) confirms
that the shift across the first six months and over the
entire year was statistically significant (at the 95%
level)15.
15 The p-value for the test for differences between waves 1 and 2,
and 1 and 3 were 0.019 and 0.015 respectively.
54
2.9 Hunger and malnutrition
The dotted green line represents the WHO expected
normal distribution of weight for age. The red line depicts
the nutritional status of the children before the
introduction of the BIG, with 42% malnutrition. The
dashed-dotted blue line confirms the direct and dramatic
impact the introduction of the BIG had on malnutrition
dropping to 17% within just six months. The
solid blue line represents the nutritional status of children
by November 2008 with malnutrition dropping
even further to 10%. It is clear that the major shift in
distribution happened in the first six months after the
BIG was introduced. The one year results confirm and
reinforce this hugely positive trend. To reiterate, with
the BIG, the malnutrition rate decreased from 42% in
November 2007 to only 10% a year later. This is an extraordinary
developmental achievement; to see that
child nutrition is directly and dramatically improved by
giving this small universal cash grant to poor families.
Graph 2.9-1: Weight for age z-sores according to WHO standard -
before and after BIG (for children in households without significant
in-migration)
0 .1 .2 .3 .4 .5
-4 -2 0 2 4
x
Nov 2007 Jun 2008
Nov 2008 WHO normal
With the
BIG, the
malnutrition
rate decreased
from 42% in
November
2007 to
17% within
six months,
down to only
10% after a
year later!
55
Section 2: Impact Assessment
Households with substantial migration
It is worthwhile to also look at children living in households
which experienced substantial migration during
the second six months of the study. In these households
the child malnutrition rate was reduced to 22%
in July 2008 but some of these gains were unfortunately
reversed by November 2008 as the rate climbed
back up to 27%. This is a worrying trend and confirms
the direct interdependence between the total household
budget available and the child nutrition rate. In a
situation such as the Otjivero-Omitara pilot project,
where the BIG is not paid universally, because it does
not cater for in-migration, the benefits to intended beneficiaries
are dramatically diluted. Other poor people–
usually from the extended family – move due to desperation
to where the cash is. A similar pattern is well documented,
with the usage of the old age pensions. While
the money is intended for the well being of the elderly,
often whole families depend and live on the old age
pension as their only income, leaving no choice to the
elderly but to share the little they have with children
and grandchildren.
Note however, that even if the analysis includes all the
children, there is still a large and significant improvement
between the baseline in 2007 and the end of year
one of the BIG.
2.10 General Health
A community such as Otjivero-Omitara suffers from a
vicious circle of malnutrition, poverty, ill-health and
lack of human development. All these factors are interconnected.
An intervention such as BIG is likely to
break this vicious cycle.
The situation in 2007 was desperate. Poverty prevented
many residents of Otjivero-Omitara from seeking treatment
for illnesses. The nurse explained that many were
unable to pay the clinic fees of N$ 4. She explained that
she would still treat people 'on credit', but many apparently
felt too ashamed to go to the clinic without pay-
After the introduction
of the BIG in
2008, the
clinic reported
a fivefold
income
increase
from N$ 250
per month
to nearly N$
1300,- per
month.
56
2.10 General Health
ing. As a result they tended to go to the clinic only
when they became very sick. She thus expected the
BIG to have a major impact on clinic attendance – and
on the capacity of people to pay the clinic fees.
She was subsequently proved right when she reported
in June 2008:
The big change that I noticed was payment for the
clinic's services. People are paying now and the
statistics look good. Our administration (the Ministry
of Health and Social Services) is now happy
with the money that comes in.
The clinic records of 2008 show that whereas in a typical
month in early 2007, the clinic had an income of
about N$ 250 per month, after the introduction of the
BIG in 2008, the clinic reported a fivefold income increase
to nearly N$ 1,300 per month. This is because
more residents came for treatment because they could
pay the $ 4, and felt comfortable exercising their rights.
The increase in clinic attendance was not caused by an
Photo 12: Sister Mbangu of the government clinic
57
"The big
change that
I noticed
was payment
for the
clinic's services.
People are
paying now
and the statistics
look
good."
(Mbangu,
nurse at the
clinic)
Section 2: Impact Assessment
unusual spate of illnesses or a sudden epidemic16, but
rather by people seeking medical attention for common
complaints, which they had suffered without the benefits
of health care in the past. Importantly, the nurse
said that since the introduction of the BIG, she had observed
a reduction in the cases of severe diarrhoea,
while the people coming to the clinic in 2008 were
mostly treated for more common sicknesses like flu and
coughs. In short, it can be observed that since the BIG,
Otjivero-Omitara has benefited from better nutrition
and better health care – and hence that the quality of
life has improved. This supports the results of the previous
section on the improvement of the nutritional
status of adults and children which, in combination
with a better access to ARVs, led to improvements in
general health of the population in Otjivero-Omitara.
HIV and AIDS
The nurse has been actively involved in the government's
HIV prevention and treatment program. She has
educated the community about HIV prevention and the
need for safe sex. She said:
"HIV/Aids is the biggest health challenge in
Otjivero. People here don't work and the people
who work on the farms come to Otjivero to drink.
That's when the people who don't have food in
their houses come to sell their bodies. However,
things have improved since the clinic was opened
in January 2002. There is a very big difference
between the situation in 2002 and 2007. We are
providing education about AIDS and how people
can get HIV… At the beginning we had to explain
what AIDS is because people still lived in the old
days… Today people use a lot of condoms and
come to the clinic to collect them We also give them
health education. There are not so many STDs any
longer… We have a support group for HIV patients
and people are now openly talking about their HIV
status."
16 There was also no increase in incidents of ill-health in our
sample between November 2007 and July 2008.
Access to
ARVs was
often
hampered by
poverty and
lack of
transport.
58
Since the
BIG,
Otjivero-
Omitara has
benefited
from better
nutrition
and better
health care
2.10 General Health
In spite of progress, HIV/AIDS was still affecting most
households in Otjivero-Omitara. For example, 78% of
households that had experienced a death in the past
two years indicated that it was AIDS-related.
Access to ARVs was often hampered by poverty and
lack of transport. Interviewed in November 2007, the
nurse explained:
"HIV positive people have dates at which they must
collect their ARVs. They must go every month but
they don't have work, they don't have income; they
don't have people who can help them. The only
thing I can do is to ask the ambulance to take them
to Gobabis. Not all people who are HIV positive are
on ARVs because they can't get transport to Gobabis.
It costs them about N$ 100 to take taxis from
Otjivero to Gobabis and back. Then they are
hungry but have nothing to eat…
The nurse expected that the main impact of the BIG on
the lives of HIV-positive people would be to give them
the means to travel to Gobabis to collect their ARVs. As
it turned out, however, this proved unnecessary because
the doctor in Gobabis was persuaded by the
nurse in March 2008 to come to Otjivero to deliver the
ARVs to the growing group of ARV patients there:
"The situation of people in Otjivero on ARVs has improved.
The doctor is now coming to Otjivero and
people don't have to spend N$ 70 for a trip to Gobabis.
How must they come back? ARVs are free of
charge but transport is expensive and so we talked
to the doctor [in Gobabis]. He is coming here every
month to bring ARVs and to take measurements".
The number of people receiving ARVs increased from
three in late 2007 to 36 in July 2008 – a twelvefold increase.
This, of course, took place in the context of the
Namibian Ministry of Health's proactive national ARV
rollout. However, some people in Otjivero-Omitara have
expressed the view that the ARV rollout only came to
Otjivero-Omitara because of the public attention focused
on the area as a result of the BIG pilot project.
The BIG
greatly assists
people
living with
AIDS.
59
Section 2: Impact Assessment
Whatever the relationship between the BIG and the
ARV roll-out, it is nevertheless fair to say that the BIG
greatly assists people living with AIDS. People on ARVs
need to be well nourished to benefit fully from their
treatment. The BIG provides them with the opportunity
to improve their diet The BIG can benefit HIV positive
people in other ways too, as was the case for Johannes
Goagoseb
The case of Johannes Goagoseb
Johannes lives in Otjivero
and has been living with
HIV for about 3 years now.
In 2007 he lost first his
daughter and then his girlfriend
who both died as a
result of AIDS. He is unemployed
and struggled to get
his ARVs from Gobabis. As
a result, he went hunting
the day before he had to
travel to Gobabis to get his
ARVs from the Gobabis hospital.
The next day, on
which he was supposed to
travel to Gobabis, he was
arrested for illegal hunting.
This is his story as told in November 2007:
I came to Otjivero long before my parents came to
Otjivero. I am 43 years old and worked at the Omitara
hotel. Before I came to Otjivero, I worked at a
farm called Hummels in the vicinity of Omitara. I
lost my work after I fought with my colleague at
work after which my employer chased me away. So
I came to Otjivero and after some time I got employed
at the Omitara hotel. Ever since my employers
sold the hotel two years ago, I am jobless. In
2004 my parents came to Otjivero and since then I
live with them.
Photo 13: Johannes Goagoseb
in prison, November 2007
60
2.10 General Health
During the illness of my girlfriend I also went for a
HIV test on the advice of the clinic nurse. Although
it was hard for me to believe it, I found out that I
am also positive. I was very much disappointed but
could not do anything else but had to accept the
reality. From the beginning of this year, I became
very sick, and since then I received Anti-Retroviral
(ARV) treatment. The Omitara clinic does not
provide ARVs but only pre-treatment. When the
drugs finish, I have to struggle to get money to
travel to the Gobabis hospital to get my medication.
It is always a struggle to get money for transport to
Gobabis. One cannot take these drugs on an empty
stomach, but the main problem here is hunger.
It is because of hunger and especially to get transport
money to travel to Gobabis for my ARVs that I
am imprisoned today. On the previous day, I went
into Mr. Held's farm and hunted one warthog in order
to sell the meat and get some income. But on
the next day, on which I had to travel to Gobabis to
get my ARVs, I was arrested after the police followed
my footprints to our house. I tried to explain
my situation to the police, but they arrested me.
Since the week I was arrested and put in the
Photo 14: Parents of Johannes Goagoseb (Nov 2007)
61
Section 2: Impact Assessment
Witvlei prison until now that I am in Gobabis main
prison, I have not received the ARVs. Due to this
break … I am now receiving TB treatment in prison.
In July 2008, we visited Johannes again, this time at
his house in Otjivero. Both Johannes and Adolfine, his
sister, who is also HIV positive, were looking far healthier
than they were before the introduction of the BIG.
Johannes was released from jail on 11th March 2008
after paying his fine with the money he received from
the BIG and he explains how his life has changed due
to the introduction of the BIG:
Our expectations are definitely met with the introduction
of the BIG and we feel good and really
happy that Otjivero was chosen for the BIG. The
hundred N$ we receive seems small but it is a
blessed money. Many things have changed in our
lives. We have bought blankets, clothes, school
clothes, paid school fees and a strong plastic to put
on the roof of our house. We do not any more suffer
from the severe hunger we were in before we
started getting the BIG. We don't any more buy
only maize meal but also different kinds of food.
Sometimes we also buy vegetables. We have still
His story
bears testimony
to
how the
health
status as
well as the
living conditions
of
people living
with HIV improved
with
the introduction
of
the BIG.
Photo 15: Johannes Goagoseb - reunited with his family (July
2008)
62
2.10 General Health
lots of things to buy but the money is not always
enough so we plan carefully. One good thing is that
we don't spend any more money for transport to
Gobabis to get our pills (Antiretrovirals), but the
doctor himself comes to Otjivero every month. So
we get our treatment on time that's why we look so
good and well. The people of Otjivero have changed
a lot. We don't any more hear of people complaining
of hunger or asking food around. The theft
cases have also reduced tremendously. Many
people bought corrugated zincs and repaired their
houses. We buy most of the time wood, thus we
don't have any more many cases of people stealing
wood. Fightings and strong alcohol use have really
been reduced. We don't any more hear of people
fighting. (Johannes and Adolfine Goagoses, July
2008)
His story bears testimony to how the health status as
well as the living conditions of people living with HIV
improved since the introduction of the BIG. It shows
how the BIG can complement and strengthen the Government's
efforts to provide ARVs to all who need them.
2.11 Education
Otjivero-Omitara has had a primary school, which is
located in the centre of the settlement since 1996. It
has the potential to improve the prospects of Otjivero's
children, but at the time of the baseline survey in
November 2007, financial problems were keeping many
children out of school. In addition, the school reported
that the lack of adequate nutrition of many children
had a negative impact on the performance. Due to the
lack of payments of school fees, the school had very
limited financial resources and leverage to improve the
quality of education.
63
Section 2: Impact Assessment
Some 77% of the respondents reported that they could
read and write in at least one language, while 23% said
they were illiterate.
Almost half (49%) of the households with children of
school-going age indicated that their children did not
attend school regularly. Nearly half of them said this
was due to financial reasons, while 21% cited ill health
or the lack of an adequate school feeding scheme as the
main reasons.
Schooling opportunities are limited for the children of
Otjivero-Omitara. As of November 2007, the primary
school catered for about 250 children in grades 1-7.
The teachers reported that only about 20-30% of the
children did well, while the others were struggling. Pass
rates stood at about 40% and drop out rates were high.
Only few children managed to complete grade 7 and to
further their schooling in Gobabis, Windhoek or Gunichas.
This state of affairs was directly linked to the
widespread poverty, as the teachers explained:
"Most learners are more interested in pots than in
schooling… Many children stay away from school if
they don't receive food. Our school is part of the
Photo 16: The Primary School in Otjivero
Almost half
(49%) of the
households
with children
of
school-going
age indicated
that
their children
did not
attend
school regularly.
64
2.11 Education
school feeding scheme but sometimes there is no
pap. Sometimes they get some meat, about once a
week, but there are no vegetables or fruit."
Another problem was the parents' inability to pay the
school fees of N$ 50 per year, due to their poverty.
Teachers also pointed out the difficulty of enforcing
children to wear school uniforms:
"Some children don't have school uniforms at all,
others have uniforms of other schools. We tried to
solve this problem in 2005 but we could not."
Teachers were aware of the many problems that their
learnerss had to confront, including the difficulty of
finding a place to study and read after school. Therefore
they introduced study time at school in the afternoons
which helped some of the students. However, the root
cause of the problem was identified by the school's
teachers:
"Unemployment and poverty are the causes of most
problems. For the young people, grade 7 at our
school has become like their matric. Some go for
further schooling but some return after just one
term. They lack the discipline, or the money, or
don't find a place in the hostel. Some also struggle
to adjust to life in bigger places. Because of unemployment,
the parents can't afford to send their children
for further schooling."
The BIG has a very positive influence on the educational
circumstances of children in Otjivero-Omitara.
The school teacher described the changes as follows:
There are changes at the school even though not
hundred percent changes. Some of the changes
cannot happen overnight. (...) Most of them are having
school uniforms, blue shirts, their grey shorts
and shirts. They even have shoes. (...) The parents
are even giving the teachers some N$ 50 saying
buy my child some shoes when you go to town. (...)
Even when you look at them [the children] they are
"Some children
don't
have school
uniforms at
all, others
have uniforms
of
other
schools. We
tried to
solve this
problem in
2005, but
we could
not". (Before
BIG)
"Most of
[the children]
are
having
school uniforms,
blue
shirts, their
grey shorts
and shirts.
They even
have
shoes.".
(Teacher -
with BIG)
65
Section 2: Impact Assessment
clean which was not like that before. You can see
this one has been washed, soap has been bought
so that the uniforms can be cleaned, the hair is
plaited.
The primary school's principal noted that payment of
school fees had improved significantly since the introduction
of the BIG and substantiated by the receipts
provided by the school, in 2008, 250 children have paid
their school fees in full and 2 paid half the amount.
With the Basic Income Grant, the Otjivero Primary
School has achieved a 90% payment rate of school fees,
which constitutes an enormous and unprecedented
achievement for that school.
Photo 17: The school's reports show a 90% payment rate of school
fees after the introduction of the BIG
With the
Basic Income
Grant,
the Otjivero
Primary
School has
achieved a
90% payment
rate of
school fees.
66
2.11 Education
Graph 2.11-1 shows the non-attendance due to financial
reasons. In spite of the impact of substantial in-migration
of children to Otjivero, the number of children
not attending school due to financial reasons dropped
by 42% from 12 to 7 in November 2008. Six of the seven
not attending school came from households that had
drawn migrants who were not receiving the BIG.
Since the introduction
of the BIG,
the number
of children
not attending
school
due to financial
reasons
dropped by
42%.
Photo 18: Proud to be at school
Graph 2.11-1
12
6
7
0 5 10 15
Number of children Source: DfSD &
LaRRi Survey Jul 2008
BIG Pilot Project Study
in households including in-migration in the last 6 months
Children not attending school due to financial problems
Nov 07 Jul 08
Nov 08
67
Section 2: Impact Assessment
The principal further 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% and by November 2008 to 0%.
At the beginning of 2009, the principal of the school
also reported a further improvement for those learners
who finished at the Otjivero School, as for the first time
a group of 9 learners, who passed grade 7, left Otjivero
and are able to attend Secondary School.
It was not only in the primary school where changes
have taken place. School staff and parents alike noted
the improved use of pre-primary school facilities.
"We had a crèche with only 13 children last year
and this year the number increased to 52 children
because many parents now have the money to pay
for the children. If you go to the primary school you
will notice that most of the children have school uniforms
and they are clean and happy". (Adam Tjatinda)
The kindergarten teacher, Mathilde Ganas, added:
Photo 19: Enrolment at the crèche increased from 13 to 52 after
BIG
68
2.11 Education
"There is a tremendous change [since the introduction
of the BIG]. The children come to school clean,
on time and well fed. When it is break time we
send the children back home to eat and they now
come back on time. In the past, when we sent them
home, most of them never returned...because the
parents did not have food to give them and therefore
they could not return back. Before the Basic Income
Grant things were really bad and it was difficult
to teach the children. Now they concentrate
more and pay more attention in class. They are
generally happy because they have enough to eat
at home."
Likewise, the teachers at the primary school pointed
out that:
"Learners used to come to school with empty stomachs
but now this is no longer the case. Before
[BIG] the learners did not concentrate in class due
to hunger but now they are more energetic and concentrate
more, thus there are better results now."
Photo 20: School performance and attendance improved after the
BIG
69
"Learners
used to
come to
school with
empty stomachs
but
now this is
no longer
the case. Before
(BIG)
the learners
did not concentrate
in
class due to
hunger but
now they
are more energetic
and
concentrate
more, thus
there are
better results."
Section 2: Impact Assessment
Thus, the BIG has significantly contributed to an improved
environment as far as schooling and child development
are concerned. This happened without any outside
pressure or attachment of conditionality to the
cash transfer. People themselves decided what was
good for their children. All they needed was the income
to do so.
2.12 Economic activity, income,
and expenditure
Employment
The pilot project aimed to investigate whether the introduction
of the BIG would result in people choosing not
to work, (i.e. withdraw from the labour-force), or whether
it would help them find work (by financing their job
search), or enable them to start their own businesses
(by providing start up money and by increasing the
buying power of others in the community). This section
therefore explores trends in economic activity over a 12
months period.
Graph 2.12-1 looks at the unemployment rate among
the potential labour force (adults aged 15 and above)
who were present in the data throughout all three surveys
and is hence able to show the impact of BIG on
economic behaviour.
70
2.12 Economic activity, income, and expenditure
The graph shows a decrease of the number of unemployed
people from 60% to 45%. To put it differently:
since the introduction of the the BIG, employment rose
from 44% to 55% of those aged 15 and above. It is important
to note that the actual labour force increased
slightly while the labour force participation rate increased
as well. The data thus provides evidence that
the BIG did not result in people deciding not to work,.
On the contrary, the BIG facilitated greater labour-market
participation and employment.
Income
The positive employment trends were accompanied by
an increase in income. The following graph depicts the
average monthly per capita income:
Graph 2.12-1
Nov 07 Jul 08 Nov 08
0%
10%
20%
30%
40%
50%
60%
70%
60%
52%
45%
Unemployment rate
(people present throughout panel)
Unemployment
dropped
from 60% to
45%.
71
Section 2: Impact Assessment
Graph 2.12-2 shows that the BIG had a major and direct
impact on income growth and that personal incomes
rose substantially more than the actual grant
paid out. This is despite the impact of in-migration into
the area. The BIG has hence had positive direct as well
as indirect effects on income generation. By providing
the BIG as a small source of secure income, people
were able to increase their productive income earned.
Again, this refutes the notion that people would withdraw
from productive work. This is an important finding
especially in times when countries struggle to positively
stimulate their local economic development. The stimulus
created by the BIG resulted in a sustained personal
income increase beyond the money given from the outside.
The mean income – excluding income from the
BIG – increased on average by 29% in just one year.
Graph 2.12-2
Nov 07 Jul 08 Nov 08
N$
N$ 50
N$ 100
N$ 150
N$ 200
N$ 250
118
134
152
75
67
Average monthly per capita income in N$
(all)
Income BIG
Income
(wage, selfemployment,
farming)
The stimulus
created
by the BIG
resulted in a
sustained
personal income
increase
beyond
the
money spent
from the
outside. The
mean income
– excluding
income
from
the BIG – increased
on
average by
29% in just
one year.
72
2.12 Economic activity, income, and expenditure
The following sections analyse in greater detail the economic
impact by looking at the household income of
the panel broken down into the sources of income.
Sources of Household Income
Mean
household
income by
source excluding
BIG
(panel) Nov 07 Nov 08
Increase /
Decrease in
%
Wages N$ 581 N$ 692 19%
Self-employment
N$ 170 N$ 681 301%
Farming N$ 42 N$ 57 36%
Remittances N$ 103 N$ 82 -21%
Government
grants N$ 199 N$ 285 44%
Table 3: Household income
The main source of household income growth was in
self-employment. As can be seen from the table above,
income from all sources (except remittances) rose over
the year of the study. The fall in remittances (typically
remittances are contributions by extended family members
supporting poor rural households through cash or
in kind transfers) no doubt reflects the reduced need in
Otjivero-Omitara to be supported by relatives elsewhere.
The sharp rise in contributions from self-employment
speaks for the improved earnings from selfemployment
after incomes were boosted in the area by
the BIG, as well as the growth of new self-employment
activities. Self-employment has grown to the same level
as wages.
Most small enterprises which emerged following the introduction
of the BIG were in retailing, brick-making
and the manufacture of clothing. According to the respondents,
the BIG was central in providing start-up
capital and external demand. This is supported by the
following remarks from residents of Otjivero:
The sharp
rise in contributions
from selfemployment
speaks for
the improved
earnings
from
self-employment
after
incomes
were boosted
in the
area by the
BIG.
73
Section 2: Impact Assessment
"Since we get the BIG I bought materials and I am
making three dresses that I sell for N$ 150" (Emilia
Garises).
"I started my business of making ice lollies right
after the BIG started.... The demand for ice lollies I
s big because I make the biggest ice lollies in the
settlement. I sell one ice lolly for 50 cents and I
make 50 a day... With the BIG, people have money
to spend, that is why I make the ice lollies" (Belinda
Beukes).
"I started my tuck-shop in August this year (2008)
after the introduction of the BIG. The BIG came to
our place like a miracle, and I will constantly thank
God for his grace. The BIG made it possible for me
to start a business I never dreamed of. Now I am
able to sell food, soft drinks and a bit of alcohol. My
profit per month is about 800.00 to 1000.00. I believe,
by giving this money to all Namibians will
also force the young people like me to start using
their skills and talents" (April Isaacs)
74
2.12 Economic activity, income, and expenditure
"I started the brick-making business in 2006 but
had to stop it due to a lack of finances. After the
BIG was introduced... I started again with it. From
one cement bag I make 250 bricks. The bricks are
standard and I sell them for one dollar. I get the
sand for the bricks from the river. It is still a family
business which I plan to expand in the future if I
get more finances. Bricks are in demand so I will
need more manpower in order to serve the interests
of the people here at Otjivero. I am very optimistic
that this project will expand with the BIG and employ
more people" (Joseph Ganeb)
Photo 21: Joseph Ganeb started a brick making
business
75
Section 2: Impact Assessment
"We started the project last year but we had to stop
due to a lack of funds and materials. We resumed
full force in January 2008 after we received the
BIG money. We are six women who are involved in
the project... We make dresses, especially Nama
cultural dresses because most of our clients are
looking for them. We have clients from as far as
Gobabis, Witvlei, Windhoek and from the surrounding
farms. When there are occasions like weddings
and funerals, we make good sales... One dress is
about N$ 150 and we make about N$1,500 – 2,000
per month. We have opened a bank account in
Windhoek where we do our savings" (Rudolfine
Aigowas).
Photo 22: Dress making became one of the new businesses in
Otjivero
76
2.12 Economic activity, income, and expenditure
"After the introduction of the BIG I started my business.
I bake traditional bread every day. I bake100
rolls per day and sell each for one dollar... I make a
profit of about N$ 400 per month. My business is
good and I believe that it will grow. The only problem
that I have is the lack of fire wood. It is often
hard to get wood. But I made an application for additional
help to the government in order to expand
my business" (Frieda Nembwaya)
Photo 23: Baking bread: N$1 per roll - daughter
of Frida Nembwaya
77
Section 2: Impact Assessment
"The introduction of the BIG made it possible for me
to start my tuck shop. It is a very small business
but people support it a lot... I mostly sell sugar, tea,
maize meal, sweets and popcorn. We make about
N$ 800 – 1000 per month. I also sell self-made materials
for donkey carts. I buy my stock in Gobabis,
travelling on the train" (Alfred !Nuseb)
"I started my project in August this year (2008)
after the introduction of BIG. As you can see, I
made those dresses and one cost N$150-00-, If I
make 5 dresses then I make a profit of N$750, in
three weeks time. People are very much eager to
support my business. …I will continue to pray that
the Otjivero community will use the money for the
real needs so that through us, the entire Namibia
will get the BIG" (Emilia Garises).
Photo 24: BIG created small business opportunities
78
2.12 Economic activity, income, and expenditure
The evidence suggests that the BIG has helped people
to become economically active and to raise their participation
in economic activities. Far from discouraging
work, the BIG has empowered people to raise their incomes
further.
Expenditure and assets
The increase in income appears to have facilitated an
increase in savings. Six months after the BIG was introduced,
21% of respondents reported saving some of
their BIG money (amounting to an average of 7.2% of
BIG money). We obtained independent confirmation
that the BIG was linked to a large increase in savings
activity in Otjivero-Omitara. According to Laurensia !
Nowases from the NamPost Post Office in Omitara:
I work here for some years and before the introduction
of the BIG only very few people opened the
smartcard saving account. But after the BIG was introduced,
100 people opened their smartcard saving
accounts and they are still coming. There are
also parents who opened smartcard accounts for
their children. I can also say that the pensioners
who used to spend their pension money on food
and children are now able to make savings for
themselves at the post office. The post office also
makes good business and it stays busy nearly the
whole day. About 38 people also took out funeral
policies of Old Mutual and pay N$ 9.99 per month.
I realise that the BIG is a great help and real solution
to poverty. (Laurensia Nowases – NamPost
Omitara, July 2008)
This increase in savings activities is in line with the
stated intentions of the respondents. When asked in
November 2007, 40% said that they intended to save
some of the money. Thirty-two percent said they
wanted to use part of the money to fix their houses, 9%
said to plan to invest in livestock and 11% said they
would pay back debt. These types of expenditure are
geared towards improving the quality of life and longterm
security. Such expenditures make perfect sense
"I can also
say that the
pensioners
who used to
spent their
pension
money on
food and
children are
now able to
make savings
for
themselves
at the post
office."
(Laurensia
Nowases –
NamPost
Omitara,
July 2008)
Far from
discouraging
work, the
BIG has actually
facilitated
economic
activities.
79
Section 2: Impact Assessment
given that the people of Otjivero-Omitara knew that the
BIG pilot was only going to last for two years.
Debt is not necessarily a bad thing. Used wisely, debt
can help households escape poverty by enabling them
to borrow money to help start businesses, or to purchase
capital assets (like tools, or cars and houses).
Low levels of indebtedness to local shops can also help
ensure that the household has access to food, even
when monthly incomes have run out. This 'consumption
smoothing' can help households escape the hunger
and malnutrition that may otherwise be caused by
shortages of cash. However, if households accumulate
more debt than they can cope with, then the debt burden
itself may become a cause of poverty – especially
when high interest rates result in the debt burden
growing faster than the income of the household that
owes it.
The BIG could help households reduce their existing
debts to shops, but we did not expect 'consumption
smoothing activities' to end altogether. This is because
households may choose to allocate the BIG to large
once off payments (such as school uniforms, school
fees, home renovations, small business start-up costs
etc) and hence may still find it useful to be able to buy
on credit from the local shop.
In June 2008, 41% of the respondents reported to be
using the BIG to help pay back debt, but only 9.4% of
total BIG payments were allocated to that purpose. This
suggests that a large number of people are paying back
debt, but that the amounts are small. This is consistent
with the picture provided by total household expenditure
during the first six months which saw an increase
in the average monthly debt repayment from N$ 186 to
N$ 200. Some households paid off their debts altogether
– whereas others increased their debts. The data
shows that 80% of the reported changes in debt were
for amounts smaller than N$ 500. Most of these debts
were owed to the local shop.
According to data from the survey conducted a year
after the BIG was introduced, average household debt
(for those households reporting debt) had fallen from
N$ 1,215 to N$ 772, with over twice as many house-
80
2.12 Economic activity, income, and expenditure
holds reducing debt compared to those who increased
it.
Analysis of the data shows that levels of debt fluctuated
during the first six months after the BIG was introduced.
Most reduced their debts while only eight increased
their debts, and by typically small amounts. Interestingly,
16 households who were not indebted in
November 2007 had accumulated debts by July 2008.
Again, these were mostly small amounts owed to the
local shop. Only two households experienced a large increase
in debt – and these were for fixed assets (furniture
and a motor vehicle).
As regards the accumulation of household assets, there
are some indications that people have purchased useful
consumer durables. For example, the number of households
reporting working stoves rose from 31% to 43%
during the first year following the introduction of the
BIG. The number of households reporting owning a
working tool box rose from 40% to 59%. However, for
the most part, the stock of household assets has not
changed dramatically. The picture is different, however,
with regard to livestock.
When the respondents were interviewed in November
2007, 9% explicitly mentioned their intention to purchase
livestock with their BIG. At that time, only 29%
of households had any large livestock. A year later, this
had risen to 39%. Similarly, the percentage of households
reporting ownership of small livestock rose from
19% to 37% and ownership of poultry rose from 42% to
59% over the same period. This is a significant increase
in asset accumulation as people use livestock as a form
of savings (and as a form of food security). Those reporting
a vegetable garden fell from 40% to 30% during the
first six months of BIG and then rose again up to 39%.
This can probably be attributed to seasonal fluctuations
in agricultural activity.
In November 2007, a third of the respondents indicated
that they would be using part of the BIG money to renovate
their homes. There are strong and visible indications
from the data and the observed changes in the
community that this has happened. For example, the
average number of rooms in households rose from 2.6
Large livestock
increased
from 29% to
39%; small
livestock
from 19% to
37% and
poultry from
42% to 59%.
81
Section 2: Impact Assessment
(baseline) to 3.2 (six months) to 3.3 (one year). Over a
fifth of households indicated that they had improved
the roof of their homes (mostly with corrugated iron,
but also with plastic and canvas) and many indicated
that they intended to renovate and expand their homes
later.
82
Section 3: A national Basic Income Grant
Section 3: A national Basic
Income Grant
3.1 Affordability
The debate around a Basic Income Grant in Namibia
raises important questions about the affordability of
universal cash transfers and their long-term economic
impact. This section provides evidence from a microsimulation
accounting exercise that calculates the
gross and net costs of the proposed intervention. This
section also presents emerging global evidence on the
likely economic impacts.
The cost of a Basic Income Grant
The first step in estimating the cost of the grant is to
model the number of individuals eligible to receive the
grant. Since the Basic Income Grant is universal, this
number is the entire population. However, the universal
State Old Age Pension already covers those above
60 years. When a person turns 60 the person will move
from the Basic Income Grant to the higher Old Age Pension,
which would remain as it is. The cost of the universal
Old Age Pension is already a public obligation
and does not pose any additional cost. The population
estimate associated with Namibia's National Household
Income and Expenditure Survey (2003/2004) was 1.7
million people, and the UNFPA estimates Namibia's
population growth rate as 2.6% per year, implying a
population in 2009 of 2.1 million people.
Assuming a grant size of N$ 100 per month, and given
an estimated 150,000 of older people receiving the Old
Age Pension, an estimated 1.9 million people would receive
the Basic Income Grant (excluding those receiving
the Old Age Pension—whose grant amount would be
83
Section 3: A national Basic Income Grant
considered part of the existing payment). The gross cost
of the grant would amount to N$2.3 billion per year -
calculated by multiplying the grant size by twelve
months by the recipient population. The gross cost of
the grant, however, is not the relevant cost measure.
For many tax-paying recipients, the grant is essentially
a tax rebate. Part of the additional taxes raised to pay
for the grant are simply returned to the taxpayer in the
form of their own grants—similar to the stimulus tax
packages popular in many industrialised countries that
are tackling the global financial crisis. The relevant cost
measure is the amount of additional taxes raised from
taxpayers that yield real payments to lower income
Namibians. This amount is referred to as the net cost. It
is important to mention that only since it is a universal
grant the tax system can be employed to recuperate
gradually the money from those not in need and progressively
redistribute from the higher income earners
to the poor, without risking to adversely affect certain
sections of the lower income earners.
The net cost is estimated using a micro-simulation
model based on Namibia's National Household Income
and Expenditure Survey (2003/2004), with nominal figures
grown to 2009 equivalents using the Consumer
Price Index, and population estimates aged to 2009
equivalents using the UNFPA population growth estimate.
The net cost depends on the taxes recuperated
from upper income recipients, which in turn depends
on the structure of the associated tax adjustments. Depending
on the mix of direct and indirect tax adjustments,
the net cost ranges from N$1.2 to N$1.6 billion
—from 2.2% to 3.0% of GDP. The actual net cost will
depend on how it is financed—with a VAT-financed
grant leading to a lower net cost, while greater reliance
on income taxes raises both the net cost and the total
amount transferred to the poor.
For example, through moderate adjustments in the
marginal tax rates with a top marginal tax rate on higher
incomes to 38%, and increasing the Value Added Tax
rate by two percentage points, will yield an estimated
additional tax collection of N$ 1.7 billion—of which N$
1.0 billion would be returned through the Basic Income
Grant to the very same taxpayers who are paying for it.
Depending
on the mix
of direct and
indirect tax
adjustments,
the
net cost
ranges from
N$1.2 to
N$1.6 billion—
from
2.2% to
3.0% of
GDP.
84
3.1 Affordability
This reduces the net cost of the intervention to N$ 1.3
billion, of which N$ 0.7 billion would be covered by
these tax adjustments. This leaves another N$0.6 billion
to be covered by additional tax adjustments17. On a
household level the effect can be demonstrated through
the following examples:
1. An average household, which has no income at
all would receive an additional income of N$ 498
per month.
2. Equally, a typical household with a low paid income
earner of N$ 20,000 per year, would receive
an additional income of N$ 498 per month.
3. An average household with a middle income
earner of N$ 46,000 per year, would no longer
receive the full benefit, but would still receive an
additional income of N$ 217 per month.
4. An average household in the higher income
group with an income earner of N$ 300,000 per
year would pay a higher net tax of N$ 1,270.18
These examples are based on pure tax adjustments to
recuperate and to finance the BIG. However, there are
other options to finance the BIG as well and the final
financing will depend on the policy decision taken and
could be one of the options or a combination thereof.
For example, if a royalty tax on fishing and mining or
tourism is used to finance the BIG it would ensure that
the total population has a stake in the national resource
of the country. Last but not least budget re-prioritisation
could be employed to finance the BIG.
17 It is noteworthy that this is an overestimate of the costs, since
household data underestimates the top income e.g. in the data
set available nobody indicated to earn more than N$750,000
per year.
18 This is based on a household with 2.7 members, which is the
average household size in this income bracket. It is noteworthy,
however, that the bigger the household is, the more the netcost
to the household drops. This is so since the 'additional'
members also qualify for the BIG and hence bring additional income
into the household. The net costs to the household hereby
drop by the 'additional' number of people times the net BIG per
month.
85
Section 3: A national Basic Income Grant
The second step in assessing affordability is determining
how much additional tax revenue Namibia can afford.
Economists usually address this question with
"tax effort" analysis, a type of econometric modelling
based on cross-country comparisons. Tax effort models
evaluate the taxable capacity of a country based on the
structural characteristics of the economy and the country's
ability to raise taxes. The graph below documents
the growing tax capacity of the Namibian economy from
2001 to 2007.
According to the econometric analysis, Namibia's taxable
capacity exceeds 30% of national income. Yet
Namibia's actual tax collection and projected tax collection
over the medium term horizon has been falling.
Namibia's excess capacity to raise tax revenue significantly
exceeds the net cost of a Basic Income Grant under
all the financing scenarios.
3.2 Sustainability
The preceding analysis documents the short term affordability
of a Basic Income Grant for Namibia. Estimates
of the net cost in the first year range from 2.2% to
3.0% of Gross Domestic Product, while Namibia's excess
taxable capacity exceeds 5% of national income.
More important than short term affordability, however,
is the question of sustainability. What are the long term
Namibia has the tax capacity to finance a
Basic Income Grant (2.2 - 3.8% of GDP)
0 5
10
15
20
25
30
35
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
unutilised
tax capacity
tax/GDP
86
3.2 Sustainability
prospects for the affordability of the Basic Income
Grant in Namibia? The answer to this question depends
on the impact of the grant on household well-being, labour
productivity and the macro economy.
International experience with social grants documents
the positive impact on household well-being. Low income
households that receive social grants spend
nearly the entire amount on food, education and transportation—
expenditures that support long term household
well-being. Children in households that receive
social grants are more likely to attend school, and this
effect is particularly strong for primary school-age girls,
supporting gender equity effects. Social grants are associated
with significantly greater household expenditure
on food, and children in households receiving
grants have lower rates of hunger, even compared to
households with similar income levels. Social grants reinforce
developmental household spending.
The household spending effects improve labour productivity,
providing a means for households to accumulate
human capital that can help to break the poverty
trap afflicting low income households. International
studies document how social grants increase labour
force participation by very low income households. In
addition, job-seekers from households receiving social
grants are more likely to succeed in finding employment
than comparable income job-seekers from households
that do not receive grants. Social grants provide
security, and this security increases the likelihood that
unemployed potential workers will invest in job search.
In the absence of the security social grants provide, job
search is too risky, particularly when the likelihood of
success is low. Workers in households that do not have
access to safety nets cannot afford the risk that the few
resources they have available will be squandered in futile
job search—and this insecurity traps them into
poverty. The Basic Income Grant is not so much a
safety net but rather a springboard that lifts the poor to
more sustaining livelihoods.
In addition, the macroeconomic impact of social grants
tends to reinforce economic growth and job creation,
further supporting their affordability. Social grants shift
The Basic
Income
Grant is not
so much a
safety net
but rather a
springboard
that lifts the
poor to more
sustaining
livelihoods.
87
Section 3: A national Basic Income Grant
spending power from higher income groups to lower income
groups, as taxes on the more affluent finance
grants to the poorest in the country. Upper income
households spend a greater proportion of their income
on imports and goods produced with capital-intensive
technology. Neither of these spending patterns supports
job creation in Namibia. The poor, however, tend
to spend a greater proportion of their income on goods
produced in Namibia—and goods produced in a relatively
labour-intensive manner. As social grants shift
spending power to the poor, the demand for goods that
create jobs in Namibia increases. A Basic Income Grant
is also likely to increase social stability, which is a precondition
for sustainable economic development.
These economic effects increase the affordability of the
Basic Income Grant over time. The improvements in
household well-being reinforce the poverty-reducing income
effects of the grant, improve labour productivity
and support household human capital accumulation.
In addition, the improvements in nutrition, education
and health reduce the direct expenditure obligations of
government, further supporting the affordability of the
Basic Income Grant. For instance, a child who attends
school and has the resources for proper nutrition is
more likely to succeed, reducing the government's expenditure
on repeat rates. This child is more likely to
grow into an adult who can find a job, contributing
taxes that further support the Basic Income Grant's affordability.
As adults, people are less likely to suffer
from chronic and debilitating diseases if they had proper
nutrition as a child. Diseases that often increase the
expenditure liabilities of the government can be reduced
significantly. In addition, the labour market and
macroeconomic impacts of the Basic Income Grant support
long term sustainability.
The Basic Income Grant is not an added burden at a
time of economic crisis, but an appropriate intervention.
The following section highlights some of the emerging
global evidence on the impact of cash transfers on economic
growth in developing countries
The Basic
Income
Grant is not
an added
burden at a
time of economic
crisis, but
an appropriate
intervention.
The poor,
however,
tend to
spend a
greater proportion
of
their income
on goods
produced in
Namibia—
and goods
produced in
a relatively
labour-intensive
manner. As
social grants
shift spending
power to
the poor,
the demand
for goods
that create
jobs in Namibia
increases.
88
3.3 Cash transfers and economic development19
3.3 Cash transfers and economic
development19
An emerging evidence base demonstrates that cash
transfers promote economic growth. Policy makers do
not necessarily face a trade-off pitting social against
growth objectives – but rather have the opportunity to
engineer a virtuous circle of increased equity promoting
growth supporting further improvements in equity.
There are at least nine paths through which cash transfers
promote economic growth. Most of these mechanisms
work by increasing overall economic efficiency—
through better policies and strategies, improved resource
allocation (increasing employment, human capital
development and other investment and reducing
discrimination), and by more effectively taking advantage
of the economy's capacity.
1. Cash transfers can generate gains for those groups
who might otherwise be disadvantaged by specific elements
of a pro-poor growth strategy, providing a balancing
function that can enlist stakeholder support for
the reforms necessary to sustain long-term growth. Labour
unions in Nepal, for example, have identified effective
cash transfers as a prerequisite for necessary labour
market reforms, the combination of which would
enhance both equity and growth. Cash transfer initiatives
have compensated the poor for reduced price subsidies
in Mexico and Indonesia.
2. Cash transfers promote human capital development,
improving worker health and education and raising labour
productivity. Studies in South Africa and Latin
America repeatedly document significant responses of
health and education outcomes, particularly in response
to both conditional and unconditional cash
19 This section is based on a forthcoming paper by Samson et al
for POVNET, please refer to the POVNET publication for the references
An emerging
evidence
base demonstrates
that
cash transfers
promote
economic
growth.
Cash transfers
promote
human capital
development,
improving
worker
health and
education
and raising
labour productivity.
89
Section 3: A national Basic Income Grant
transfer programmes and social health initiatives.20
Child benefits (particularly cash transfers) and school
assistance packages improve school attendance, and
education constitutes the single most effective HIVprevention
asset.21 Social cash transfers piloted in
countries with high HIV prevalence (Zambia and
Malawi) successfully reduce poverty in HIV/AIDS-affected
households.22 The Child Support Grant in South
Africa promotes livelihoods, improves nutrition and facilitates
access to education.23
3. Cash transfers enable the poor to protect themselves
and their assets against shocks, enabling them to defend
their long-term income-generating potential.
Droughts in Ethiopia have significantly reduced household
earning power as long as 15 years later.24 Cash
transfers enable households to resist desperate measures
and reduce future vulnerability. Cash transfers
can assist households to maintain their consumption
without selling productive assets.
4. Cash transfers mitigate risk and encourage investment.
The downside of the riskiest and yet most productive
investments threatens the poor with destitution.
Cash transfers enable people to face these risks.
For example, farmers protected by the Employment
Guarantee Scheme in Maharashtra, India, invest in
higher yielding varieties than farmers in neighbouring
states. The risk associated with impoverishing health
expenditures in rural China has adversely affected
work migration and school enrolment decisions of
households.25 Improved social risk management supports
long-term pro-poor growth.
20 Adato (2007), Samson et al. (2006), Samson et al. (2004)
21 Irish Aid GPN (2007)
22 UNICEF ESARO (2007) cited in Irish Aid GPN (2007)
23 Agűero, J.M. et al. (2006) cited in Irish Aid GPN (2007); also
Samson et al. (2004), Samson (2007)
24 Dercon (2005)
25 Jalan and Ravallion 2001 cited in GTZ GPN (2007)
Cash transfers
enable
the poor to
protect
themselves
and their assets
against
shocks, enabling
them
to defend
their longterm
income-
generating
potential.
90
3.3 Cash transfers and economic development19
5. Cash transfer programmes combat discrimination
and unlock economic potential. In Bangladesh, Brazil
and South Africa, transfers provided to women have a
greater positive impact on school attendance by girls
compared to boys.26 Empowerment directly tackles discrimination,
improving society's employment of human
resources.
In particular, while gender inequality exacerbates the
spread of HIV and AIDS, empowering and increasing resources
in the hands of women improves child survival,
nutritional status and school attendance.27 "When women
are healthy, educated and free to avail of life's opportunities,
children also thrive. In households where
women are key decision makers, the proportion of resources
devoted to children is far greater than in those
in which women have a less decisive role.28 Consequently,
who controls cash transfers at household
level is crucial in terms of AIDS and poverty mitigation,
child survival and empowerment of both women and
children."29
6. Cash transfers support the participation of the poor
in labour markets, contributing to broader empowerment
objectives. Job search is often expensive and
risky. In South Africa, workers in households receiving
social transfers put more effort into and are more successful
at finding work than those in comparable
households not receiving these grants. The impact of
cash transfers on women's labour market activity is
about twice as great as that for men.30 Social health
protection increases labour productivity by improving
people's health status and replacing inefficient riskcoping
mechanisms, which in turn promotes employ-
26 Samson et al. (2004, 2006)
27 UNICEF, State of the World's Children (2007) cited in Irish Aid
GPN (2007)
28 HelpAge International (2006)
29 Irish Aid GPN (2007)
30 Samson et al. (2004), Samson and Williams (2007)
Cash transfers
support
the participation
of the
poor in labour
markets,
contributing
to
broader empowerment
objectives.
Job search
is often expensive
and
risky. In
South
Africa, workers
in households
receiving
social
transfers
put more effort
into and
are more
successful
at finding
work than
those in
comparable
households
not receiving
these
grants.
91
Section 3: A national Basic Income Grant
ment and economic growth.31 There is a need to better
understand how more effective cash transfers for informal
sector workers might promote access to sustainable
decent employment.32
An emerging evidence base is providing evidence of how
cash transfer interventions support employment and
entrepreneurial activities. Participants in Zambia's cash
pilot scheme use a significant proportion of the benefits
to hire labour, for example in order to cultivate the land
around their homes and consequently multiply the
value of the social transfers while creating employment
for local youth.33 Mexico's Progresa (now Oportunidades)
social transfer programme is associated with local
economy impacts that improve consumption, asset accumulation
and employment broadly within communities—
for both programme participants and non-participants.
34 Participants in Progresa invest a portion of
their social transfers in productive assets and are more
likely to engage in entrepreneurial activities, improving
their potential for sustainable self-sufficiency.35
7. Cash transfers stimulate demand for local goods and
services, promoting short-term growth outcomes. In
Zambia 80% of the social transfers are spent on locally
purchased goods, supporting enterprises in rural areas.
In South Africa the redistribution of spending power
from upper to lower income groups shifts the composition
of national expenditure from imports to local
goods, increasing savings (by improving the trade balance)
and supporting economic growth.36 A social account
matrix analysis of the Dowa Emergency Cash
Transfer (DECT) programme in Malawi found multiplier
impacts from the payments broadening benefits to the
entire community.37 In Namibia, the dependable spend-
31 GTZ GPN (2007)
32 Lund (2007)
33 SchuÅNring et al. (2006)
34 Barrientos and Sabates-Wheeler (2006)
35 Gertler et al. (2005)
36 Samson et al. (2004)
37 See Davies and Davis (2007), which estimates multipliers ranging
from 2.02 to 2.45
92
3.3 Cash transfers and economic development19
ing power created by social pensions supports the development
of local markets and revitalises local economic
activity.38 However, the macro-economic impact for any
given country will depend on the patterns of demand
across income groups and the manner in which social
transfers are financed.
8. Cash transfers help create an effective and secure
state, promoting growth by building social cohesion
and a sense of citizenship as well as reducing conflict.39
Social health protection, for example, is grounded in
values of equity and solidarity, strengthening bonds of
co-operation and reciprocity and thereby promoting social
stability.40 A safe and predictable environment is
essential to encourage individuals, including foreign investors,
to work and invest.
The social pension, for example, in Mauritius contributed
to the social cohesion necessary to support the
transition from a vulnerable mono-crop economy with
high poverty rates into a high growth country with the
lowest poverty rates in Africa.41 Likewise, Botswana's
social pension provides the government's most effective
mechanism for tackling poverty and supporting the social
stability that encourages the high investment rates
required to drive Africa's fastest growing economy over
the past three decades.
9. Cash transfer promotes empowerment and growth by
improving the negotiating power of workers, smallholder
farmers and micro-entrepreneurs in the marketplace.
Workers who have a better fallback position (provided
by cash transfers) can search for a job that takes more
effective advantage of their capabilities, rather than accepting
the first job that becomes available. This raises
38 Cichon and Knop 2003
39 Samson et al. (2002), Bourguignon and Ravallion (2004), DFID
(2005)
40 GTZ GPN (2007)
41 Roy and Subramanian (2001)
Cash transfer
promotes
empowerment
and
growth by
improving
the negotiating
power
of workers,
smallholder
farmers and
micro-entrepreneurs
in
the marketplace.
93
Section 3: A national Basic Income Grant
labour market efficiency—by better matching workers
to positions that harness greater productivity and pay
higher wages, thereby reducing underemployment.
Small-scale producers with access to cash transfer benefits
are less compelled to sell produce at a loss in order
to survive—such as at harvest times when temporary
gluts in food markets might severely depress prices.
Participants in one of Malawi's social transfer programmes
were empowered by the resources to invest in
their own farms during the planting season rather than
rely on dead-end casual employment for their immediate
survival.42 Cash transfers enable the poor to engage
with the market system on a more equal footing, improving
its efficiency and legitimacy.
3.4 Local economic development
Unemployment stands at close to 40% in Namibia. The
most affected by unemployment are rural people, women
and youth. Local entrepreneurship opportunities
are also rare and often fail because of lack of cash to
enable local communities to support local businesses.
At present, economic growth tends to be in favour of big
business. In Namibia, the major beneficiaries are some
of South Africa's major food and clothing chains such
as Shoprite, Edgards and Pep Stores who are often located
in urban centres. The fruits of economic growth
are not enjoyed by the large majority of Namibia's poor
who have no work or who live on wages and salaries.
The gap between the highly paid and the lowly paid
continues to grow by leaps and bounds. Many Namibians
remain poor and are not able to live on their meager
incomes. The kind of economic growth we have witnessed
over the years has reduced purchasing power -
the ability to buy and pay for goods and services for
Namibia's poor. The current growth path therefore contributes
to the sustenance of poverty rather than the
elimination thereof.
Formal and big business enterprises are not attracted
to rural areas. In addition, the absence of cash in the
42 Harnett and Cromwell (2000)
The absence
of cash in
the local
economy
prevents
businesses
and local
projects
from becoming
successful
and sustainable.
94
3.4 Local economic development
local economy prevents businesses and local projects
from becoming successful and sustainable. Small and
rural enterprises do not survive because only the larger
enterprises benefit from economic growth.
Growth can, and must, be re-focused from the global
to the local, from the world-scale to the human
scale. Of course not everything can be localised:
ship, planes and car building, as well as mining,
are obvious examples. But nobody needs to choose
between sugar and tea-shirts, tables and carpets
from all over the world. When production and consumption
are geographically closer, many benefits
follow' (New Economics Foundation, 2006).
BIG supports an economic growth that puts cash income
into the hands of the poor. The people of Otjivero-
Omitara have demonstrated that there are wider benefits
to be derived from putting cash into poor communities.
The results show that poor people did not
choose to be dependent on the BIG forever, but have
used the grant to diversify their incomes. In the absence
of formal jobs, they were able to sustain livelihoods
and activate local skills.
The people of Otjivero-Omitara have also shown the benefits
that can be derived when the local and even national
economy is driven by its people. BIG supports
local economic development and promotes sustainable
livelihoods for communities such as Otjivero-Omitara
that have been facing long-term structural unemployment
and overarching dimensions of poverty. BIG
makes it possible for local people to be actors - not only
consumers of goods and services.
Unlike most foreign businesses, local business owners
have a better sense of the needs of the people in their
own communities. The dresses that are made are the
kind that the people in Otjivero-Omitara will buy, the
brick making business was inspired by the wish of residents
to improve their dwellings, and the tuck-shops
offer the basic necessities that the people of Otjivero-
Omitara need.
The people
of Otjivero-
Omitara
have demonstrated
that
people used
the grant to
diversify
their incomes.
In
the absence
of formal
jobs, they
were able to
sustain livelihoods
and
activate local
skills.
95
Section 3: A national Basic Income Grant
Unlike in the past when people were forced to buy from
one local dealer in Omitara, they now have a choice.
The BIG promoted diversity and choice for people in accessing
goods and services.
3.5 Concluding remarks
The BIG pilot project in Otjivero-Omitara has shown
the wide-ranging benefits of a universal income grant in
addressing poverty. The findings contained in this report
document the social and economic changes that
occurred during the past 12 months – some of them being
nothing less than spectacular.
The Basic Income Grant is more than an income support
programme. It provides security that reinforces human
dignity and empowerment. It has the capacity to
be the most significant poverty-reducing programme in
Namibia, while supporting household development,
economic growth and job creation. A BIG has various
developmental impacts. A grant of N$ 100 per person
per month would generate a net benefit of over N$ 900
million a year reaching the rural communities in Namibia.
It can be argued that this would work as an engine
for local economic development. The poor would have
the ability to spend larger amounts on locally produced
goods and services. This would create more viable and
sustainable opportunities for employment in the rural
areas. Furthermore, if people are constantly confronted
with economic insecurity, they will not be able to engage
in entrepreneurial activities. The BIG would therefore
provide income security, which has the ability to
free resources for entrepreneurial risk taking. A BIG is
not an added burden at a time of economic crisis, but
an appropriate intervention that will stimulate demand
- particularly for basic consumer goods.
The BIG is a form of social protection which reduces extreme
poverty and supports pro-poor economic growth.
As a national policy it would greatly assist Namibia in
achieving the Millenium Development Goals to which
the country has committed itself. These goals include
the eradication of extreme poverty and hunger, the pro-
The BIG promoted
diversity
and
choice for
people in accessing
goods and
services.
The Basic
Income
Grant is
more than
an income
support programme.
It
provides security
that
reinforces
human dignity
and empowerment.
It has the
capacity to
be the most
significant
poverty-reducing
programme
in
Namibia,
while supporting
household
development,
economic
growth and
job creation.
A BIG is not
an added
burden at a
time of economic
crisis, but
an appropriate
intervention
that
will stimulate
demand
- particularly
for basic
consumer
96 goods.
3.5 Concluding remarks
motion of gender equality, the reduction of child mortality,
combating diseases like HIV/AIDS and malaria,
and ensuring environmental sustainability. The empirical
results in Otjivero-Omitara have shown that a BIG
will have a positive impact in all these areas.
While the BIG alone cannot solve all of Namibia's social
and economic problems, it will certainly make a substantial
contribution. One of our findings in Otjivero-
Omitara was that the grant has reduced the dependency
of young women on men for their survival. The
BIG has given women a measure of control over their
own sexuality, freeing them to some extent from the
pressure to engage in transactional sex.
There is no doubt that the cost of a BIG is substantial -
ranging from 2.2% to 3.0% of national income. As
shown by the calculations in this report, Namibia has
the capacity to mobilise the necessary resources
without undermining financial stability. On the contrary,
over time, as Namibia benefits from the long term
growth impact, the Basic Income Grant will become increasingly
more affordable. Moderate adjustments to
VAT and income tax, alternatively royalties levied on
natural resources, or a shift in budget priorities or a
combination of these interventions, will make a national
BIG an immediate option for Namibia. Its implementation
is thus merely a question of political will.
As shown by
the calculations
in this
report, Namibia
has the
capacity to
mobilise the
necessary
resources
without undermining
financial
stability. Its
implementation
is thus
merely a
question of
political
will.
97
Section 3: A national Basic Income Grant
98
3.5 Concluding remarks
99
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