Windhoek Observer Business Journalist, Chamwe Kaira (CK), sat down with President Hage Geingob’s key economic adviser, John Steytler (JS), to discuss poverty in Namibia, rural/urban migration, the Harambee Prosperity Plan (HPP) and the integrity of statistics collection.
Below is an excerpt of that interview.
CK: In the president’s speech opening the Cabinet workshop on NEEEF, he stated that poverty in Namibia has reduced from 70 percent in 1994 to 18 percent in 2016. And yet, Namibians are visibly poorer each day, if we go by the mushrooming of shacks, outbreak of diseases as a result of poor sanitation and many other socials ills. How can the president say that poverty has reduced when most people are convinced that it is getting worse?
JS: If we look at poverty just after independence it stood at 70 percent, maybe this measurement was even low. There were people who were very poor. In some regions the rate was 90 percent. When we cite poverty, we cite overall poverty for Namibia.
The last survey in 2016 showed that poverty was at 18 percent. The most accurate figure you can get on poverty is when you go to the households. If you just walk and observe, that is not a scientific way to measure poverty. You have to go to the household and capture data. All credible poverty statistics are based on household surveys. In the case of the 2016 statistics, more than 10,000 households were sampled.
The poverty survey was done in 2015/2016. We had the food poverty, the lower poverty line and the upper poverty line. The upper poverty is 18 percent, the lower poverty is 11 percent and the food poverty dropped to 5.8 percent. For us to get the correct figure of poverty, it’s extremely difficult to say that poverty has gone up or down. We can just say what we suspect has happened.
I see two things at play. First, in 2015 we still had good economic growth; it was above five percent, so this figure of poverty at 18 percent was informed by high economic growth. 2016 is when the economic growth declined to one percent. In 2017, economic activities figures will be very low, although we don’t have the actual official figures yet, but it will be about one percent.
That weak economic activity will have an impact on poverty, especially on people living on the margins of the poverty threshold. We know that there have been job losses in some sectors. From that perspective, one may argue that poverty in 2017 would have gone up compared to 2015/2016. But one may also argue that in 2015 when this survey was carried out, the old age pension was very low, it was N$600 and the coverage rate of the old age pension was also lower.
Now in 2016/2017 the old age pension has almost increased by 100 percent. The figure we have is that 99 percent of the elderly that qualify, receive the old age pension and statistics show that the elderly spend the money on their households, so the entire household benefits from any increase in the old age pension.
We can also argue that although we had job losses, maybe the increase in the old age pension will offset it. But we will have to measure it to be certain. It’s not something we can say as a fact right now until we have done an additional survey.
CK: But when will that survey be carried out?
The household surveys are carried out every five years, so it will be done in 2020. Then we will do another one by 2025. In Namibia, we want poverty to be eradicated by 2025. If you look at the World Bank analysis, they said one of the reasons poverty declined in Namibia was because of the social safety nets that we have. But we cannot build prosperity based on social safety nets. That is why we must continue to look at the economic constraints and also set a higher economic growth.
We have to be aware that the current economic situation has affected people differently. The past two years have not been easy. But what I am also telling people is that the economic cycle will pick up again and people will regain employment.
Another thing is that we need to find opportunities in the rural areas to arrest the rural-urban migration. People come to cities with expectations of better income and if that does not happen, then you have escalating urban poverty.
CK: What is being done to address the rural –urban migration problem?
JS: If you look at the Harambee Prosperity Plan (HPP), a number of initiatives have been proposed on how to address poverty, especially food poverty. One idea was the Food Bank in urban and peri-urban areas and it was piloted in Windhoek. This year, it’s going to other regions. It is an initiative that will continue, but we are also reviewing the effectiveness of the Food Bank and looking for better ways to arrest urban hunger.
Currently, we give food parcels, but this involves a lot of logistics and it takes time and inflates the cost. Now we are looking at other ideas such as what if we distribute food vouchers or have an electronic payment system where instead of food parcels, people get vouchers or an electronic payment that allows them to buy certain products. These are only suggestions for now, but we are discussing these kinds of ideas.
On rural hunger, we say that the solution is in improved agricultural output. By the end of this year, we will roll out the Agriculture Modernisation Programme (AMP). The government has received a N$10 billion loan from the African Development Bank. N$1 billion has been earmarked for the AMP.
CK: What is the current position of the president on the classification of Namibia as an Upper Middle Income Country?
JS: The cut-off lines are too artificial. The per capita is an average income, it hides the skew in the distribution of income in countries like Namibia, and it is not fair.
If you take out the high income earners and come up with the per capital income of 80 percent of Namibians that are not in the top income brackets then we will be a lower income country and we will qualify for increased development assistance.
The GDP statistics has many other weaknesses. If we just focus on statistical indications that poverty has declined, it will not tell the whole story. We need to look at what happened to poverty, what happened to employment, inflation, economic growth; we need a range of indicators to see if we are making progress.
CK: There have been reports that the Namibian Statistics Agency (NSA) was instructed by State house to interpret statistics in a more favourable light and avoid issuing ‘alarmist’ projections. What do you have to say to these allegations?
JS: That is not true. As a founding Statistician General, I want to say that the independence of statistics compilation and dissemination is vested in the hands of the Statistician General and that is in line with the African Charter of Statistics and also the UN fundamental principles of statistics. Namibia would be violating these principles that we hold dearly as members of the UN and AU if we were to interfere.
To minimise interference, a board has been set up to be a governance board on statistics collection and data management. I was appointed in August 2017 as NSA chairman.
The other key figures are quarterly GDP figures. Maybe it would have been a manipulation, if it was a positive growth and everybody would have asked how was it possible for the economy to grow, when we had the headwinds we are experiencing now.
State House has acknowledged many times that the economy is struggling. Take, for example, the debt figures. When we say that the fundamentals look better, we say that the rate at which the debt has increased is not increasing as fast as it used to, it is stabilising, we look at Bank of Namibia figures to support our conclusions. I can give an assurance that from my side there is no interference at all.
CK: Let’s talk about the Harambee Prosperity Plan (HPP). How is the implementation going so far?
JS: The plan has many pillars. In terms of international relations, if I look at all the outcomes, we have done what we needed on international relations. I think that pillar, we are performing well. We are also performing well on the governance pillar. We have seen MPs declaring their assets, so that one has happened. The fact that we have entered into performance contracts at key levels of government is good.
When it comes to the economic advancement pillar, there were challenges. I don’t think we have failed in economic advancement, but I think we have had extremely difficult conditions to overcome. Last year, we used the term ‘headwinds’, I hope next year and going forward, that we can be carried by some ‘tailwinds’ to make up for slippage in the economic sector.
We did okay on the pillar on social provision. If you look at the target on vocational training, there is phenomenal progress not just enrolment rates, but we have addressed quality issues.
On the poverty side, the Food Bank has started. On rural poverty, we are a bit behind schedule, but with the new agriculture modernisation programme, we can catch up now that we have secured funding.
On infant and maternal mortality, there have been some progressive interventions. Hopefully, statistics will show that there has been positive impact. All the major clinics and hospitals have now been equipped with new ambulances.
On land servicing and house construction, we have done quite okay. In year one, we overshot on the target. In year two, I hope we will come close to the target.
On infrastructure, it has been mixed. On the water, energy and road construction side, I am pleased with progress. We have been less successful with the rail sector, which is crucial for us to become a logistic hub and also for safety.