Poverty, income and economic development in Namibia: proceedings of the Bank of Nambia's annual symposium, 2003
The fifth Annual Symposium of the Bank of Namibia on the topic Poverty, Income
Inequality and Economic Development took place on August 22, 2003 at the
Windhoek Country Club Resort. One of the objectives of the conference was to
discuss the link between poverty and income inequality and their impact on
economic development in Namibia.
It is important to point out that the Bank of Namibia supports and promotes
economic policies that help to achieve sustainable economic growth, and which can
reduce poverty and improve equity in the economy. On that basis, another main
objective was therefore to identify effective policy strategies that assure that the
benefits of the growth are shared equally among the population. For this reason,
international experts in these fields have been invited by the Bank of Namibia to
participate in the Annual Symposium and to share their knowledge and experiences
with the view to contribute to the reduction of poverty in Namibia.
Overview and Reflections
Mr. Tom K. Alweendo, the Governor of the Bank of Namibia in his opening speech
emphasized the importance of reducing poverty and achieving a more equal income
distribution, so that everybody can benefit from economic growth. He emphasised that
while, the interest of the Bank of Namibia is to promote economic policies that
maintain monetary and financial stability and lead to economic growth, these policy
should also be consistent with poverty alleviation and the improvement of equity.
Dr. Anne Epaulard from the International Monetary Fund presented a paper on
Growth, Income Inequality, and Poverty Reduction in Namibia . The paper gives an
overview of the key economic variables that describe the current status of poverty
and income inequality in Namibia. Namibia has one of the highest GDP per capita
among the Sub-Saharan African countries, but also has one of the most unequal
income distribution in the world. The paper identifies three different scenarios for the
evolution of income inequality and growth in Namibia. The plausible scenario, which
takes into account a slow reduction of the inequality (the gini-coefficient of 0.63),
shows that the annual growth rate needed to half the poverty rate within 10 years
is 3.7 percent. These projections appear to be quite achievable. Finally, sectoral
policies are believe to be more effective than overall macroeconomic policies in
reducing income inequality.
In the paper "Economic Diversification, Income Inequality and Economic
Development in Namibia , Prof. Samwel Wangwe from the Economic and Social
Research Foundation, Tanzania, addresses the question how strategies that
involve economic diversification can be formulated to reach a high and sustainable
level of economic growth and simultaneously lead to poverty alleviation and a more
equal income distribution. The paper concludes that economic diversification should
be implemented on different levels, namely within the same sectors, into new
sectors as well as in diversifying exports. Furthermore, Prof. Wangwe identifies
productivity as a key contributor towards diversification and advises a shift from low
to high productivity production systems. Special attention should be paid to the
agriculture, the SME and the informal sector as well as to tourism, manufacturing
Mr. R.L. Ritter (Economist), as a discussant, pointed out that economic
diversification is a product of pursuing a policy of wealth creation through
competitive advantages. He believes the objective rather should be to pursue
competitive advantages and learning clusters within a framework of sustainable
development. He further argues that Namibia has a small internal market and its
future ability to grow will depend more on growing exports.
Prof. A. O. Akinboade from the University of South Africa presented a paper on
Fiscal Policy, Income Inequality and Poverty Alleviation in Namibia . First, The
paper acknowledges that Namibia has already made important strides in poverty
reduction policies, which can be seen e.g. in the consistent fiscal spending on social
services in several areas. The paper also gives a poverty profile of Namibia,
revealing e.g. the fact that the vast majority of the poor lives in rural areas, and that
the households headed by women are living in poverty more often than those
headed by men. It is also affirmed that poverty is more pronounced, especially
among the unemployed. The paper suggested that the tax policy could be
considered and used as an instrument to achieve a more equal income distribution.
A number of policy suggestions are made by the paper, which include the reforms
of the school fee system, the health sector and the implementation of a revised
social safety nets program. The discussant, John Steytler of the Bank of Namibia,
complemented the paper for its detailed analysis on the role of fiscal policy.
However, he cautioned that the analysis would be more meaningful if placed in the
in the context of the Namibian economy.