Social protection programmes alone do not reduce poverty: Economist

13 Jun 2017 17:30pm
WINDHOEK, 13 JUN (NAMPA) – Despite social protection programmes that Namibia has put in place to reduce poverty and inequality, the poverty level remains relatively high for an upper-middle income country, said a World Bank senior economist.
Victor Sulla indicated that Namibia is one of the most unequal countries in the world.
Sulla revealed this Tuesday at the release of the report titled ‘Does Namibian fiscal policy benefit the poor and reduce inequality in the country?’
Jointly prepared by the World Bank and Namibia Statistics Agency (NSA), the report assessed the impact of Government’s taxation and social spending, and whether the best possible use of these tools is applied to address poverty and inequality.
The report found that the proportion of the population that were living in severe poverty in 2009/2010 had reduced largely due to the impact of direct cash transfers, especially the Old Age Pension.
Other transfers given to the most vulnerable include grants for liberation struggle veterans, people with disabilities, child maintenance, and foster care.
Namibia’s fiscal policy lifted 118 000 people out of poverty and cut the rate of severe poverty by nearly a quarter, he said.
However, Sulla noted that only 33 per cent of the poor receive the relevant grants.
“Social protection alone does not reduce poverty and inequality in the society,” he said, adding even though Namibia’s direct transfers are progressive, generous and matter to the poor, a large proportion of transfers are not going to the poorest.
He suggested improving the efficiency of transfers by better targeting and consolidating social programmes, and reducing leakages of existing ones.
Sulla said improvements in the fiscal policy must be paired with higher and more inclusive economic growth that creates more jobs in order to create a sustainable path out of poverty for Namibia’s poorest citizens.