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Home > English > Alternatives International Journal > 2009 > Ides of May 2009 > Kind of a BIG Deal

Kind of a BIG Deal

Namibia’s Basic Income Grant

Thursday 4 June 2009, by Herbert Jauch

Namibia, a vast country inhabited by two million people, is one of the
smaller economies in Southern Africa. It adopted a market-based
economic system after achieving independence from apartheid-
era South Africa in 1990. Despite creating favourable investment
conditions and its high levels of political stability, Namibia, with its
ample mineral and marine resources, could not break the vicious
cycle of mass unemployment, inequality, and poverty.

In 2002, the Namibian government appointed the Namibia Tax
Consortium to review Namibia’s tax system and to explore ways of
addressing poverty and inequality. The subsequent report found “that
by far the best method of addressing poverty and inequality would
be a universal income grant.” The commission further suggested that
the BIG should be set at a level of at least N$ 100 (USD$ 12) per
person per month.

A BIG would cover all Namibians from birth until they reach the age
of 60, at which time the national old age pension scheme (currently
N$ 470 per month) would kick in. The consortium pointed out that
the net costs of the Basic Income Grant would amount to about
3% of Namibia’s GDP and could be recovered through changes in
the tax system, whose collection rate is currently below 25%, thus
making a BIG affordable.

The Namibian government was divided over the question of a BIG.
Some regarded it as an unaffordable welfare measure, while the
International Monetary Fund did its utmost to discourage Namibia’s
policy makers from implementing it. Undeterred, in 2004 a coalition
of churches, trade unions, NGOs, and AIDS Service organisations
formed the Basic Income Grant Coalition to advocate for the
introduction of a BIG in Namibia.

After three years of debating and lobbying, no breakthrough was
achieved; government ministers and parliamentarians were still
divided over the merits of a BIG. Finally, the Coalition decided to
implement a basic income grant in a single village.

The chosen location was the settlement of Otjivero in the Omitara
district of Eastern Namibia. About 1,000 people reside there. Most
of them are retrenched former farm workers and their families, all
of whom have nowhere else to go. Poverty and desperation were
widespread and the Coalition believed
that if the BIG could make a difference
in the lives of the residents of Ojtivero,
it would certainly be able to make a
difference in the rest of the country.

The pilot project started in January
2008. All residents below the age of
60 years received a Basic Income
Grant of N$100 per person per
month— no strings attached. A local
and international research team has
accompanied the introduction of the
BIG; their task is to closely monitor its
impact over a two-year period.

The community itself responded to the
introduction of the BIG by establishing
their own eighteen-member committee
to mobilize the community and advise
residents on how they could improve
their lives with the money. This suggests
that the introduction of a BIG can
effectively assist with community
mobilisation and empowerment.

The first to benefit have been the
children. In just six months child
malnutrition plummeted from 42%
to 17%, while the number of parents
paying for school fees doubled to
90%. More children are now attending
school and the stronger financial
situation has enabled the school to
improve teaching materials for the
pupils. The school principal reported
that dropout 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, they were almost nil.

Another striking fact is that income has
risen by more than the amount of the
grants. People are now able to engage
in more productive activities, which has
fostered local economic growth and
development; several small industries
have sprouted up in Otjivero, such as
dressmaking, baking, and brick making.
Indeed, since the introduction of
the BIG, the majority of people have
been able to increase their work and
their income dramatically. Average monthly household incomes increased
substantially over and above the value
of the BIG payments: household
incomes from wages increased by
19%, income from farming increased
by 36%, and income from self-
employment increased by 301% during
the first year. These findings contradict
critics’ claims that the BIG would lead
to laziness and dependency.

Worries that the grants would lead
to more alcoholism proved likewise
unfounded. On the contrary, the
introduction of the BIG has induced
the community to set up a committee
that is trying to curb alcoholism. An
agreement has also been reached with
local shebeen owners not to sell alcohol
on the day of the payout of the grants.

Meanwhile, economic and poverty-
related crime (illegal hunting, theft and
trespassing) has fallen by over 50%.
The Basic Income Grant has also
helped young women to take charge of
their own lives. Several cases document
that young women have been freed
from having to engage in transactional

A further boon is that the BIG
has supported and strengthened
government efforts to provide
antiretroviral treatment to people
suffering from HIV/AIDS by improving
access to government services and
enabling people to afford nutrition. The
settlement’s health clinic was visited
much more frequently; residents were
able to pay the N$ 4 and it has seen its
income increase fivefold.

The initial results of this pilot project
are encouraging and have, thus far,
exceeded the expectations of the
BIG Coalition. The local community
has embraced the pilot project and is
determined to make it a success. The
BIG Coalition now hopes to convince
the Namibian government to introduce a
countrywide BIG in the near future.

All these positives aside, there is no
doubt that the BIG is a limited measure
and cannot be a panacea for Namibia’s
considerable socio-economic challenges.
The initiative has to be accompanied by
other measures of resource redistribution,
job creation and structural change.
However, the BIG represents a promising
starting point that can make an immediate
dent in the debilitating and violent poverty
that undermines the lives of so many

For further information on the BIG, visit

HERBERT JAUCH is the Head of
Research and Education at Namibia’s
Labour Resource and Research
Institute (LaRRI),

Photo: Dirk Haarmann