At a time when Namibia's informal social safety net is failing the poor, Namibia has too many poorly administered formal programs. The result: regional bias, exclusion errors, and fraud. It seems highly desirable for the formal system to comprise four programs: a social pension plus grants for poor children, blind people, and the disabled.
In Namibia, the extended family is a big shock absorber: informal sharing arrangements between and within households are a unique source of strength. Grandparents contribute enormously to the continuation of this safety net by letting the entire family share their social pension in times of need and by looking after their grandchildren when parents are away or infected by AIDS.
But these informal safety nets are not robust at times of drought and are strained when unemployment, and the burden of children of AIDS-infected parents, are high.
Among formal safety net programs, the social pension and the disability grant touch the lives of the poor more than other programs, but the administration of both programs needs to improve.
Namibia is one of the few African countries to administer a social pension for everyone 60 and over—a safety net that has potential to significantly reduce poverty. But the program suffers from undercoverage (exclusion errors) in the heavily populated and poorer North.
With the disability pension, regional asymmetry is pervasive and needs immediate correction.
Child allowances should relieve poverty, but the three main grants for needy children are heavily urban-biased and regionally asymmetric. The bias toward urban and middle-class children is greatest for in-kind (school feeding and shelter/housing) programs. A priority should be placed on reallocating public resources to upgrade squatter settlements and single-room apartments. Nongovernmental organizations need to be encouraged to explore demand-driven approaches to promoting informal businesses in rural Namibia.
Programs to subsidize welfare homes and remit rent for apartments where rent is overdue should be eliminated to free up resources for social pensions and disability grants. It appears best to supplement cash transfer programs by a better targeted shelter/housing program and an expanded labor-based works program (implemented by private contractors).
The Northern and Northeastern provinces are underserved by all transfer programs; coverage in the North must improve. Further decentralization should help rationalize the deployment of staff resources in social welfare.
This paper is a product of the Poverty Division, Poverty Reduction and Economic Management Network. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Precy Lizarondo, room MC4-568, telephone 202-458-7199, fax 202-522-3283, Internet address plizarondo@worldbank.org. The author may be contacted at ksubbarao@worldbank.org. (48 pages)
The full report is available in PDF format.