Namibia’s old age grant bill nears N$8 Billion
Speaking during the Namibia Budget Dialogue in Windhoek on Wednesday, Shafudah defended the government’s decision to raise the old-age pension by N$100, noting that the increase already represents a substantial burden on the national budget.
“There was N$100 that was earmarked to add to the pension for the elderly,” she said. “But what people do not know is that in totality, we have 226,000 elderly in this country.”
According to the minister, each beneficiary currently receives N$1,600 per month, along with funeral benefits, pushing the total annual pension bill to roughly N$7 billion. With the additional N$100 increase, the government expects the cost to rise closer to N$8 billion.
“When I added N$100, that was already N$500 million. So add to that, it’s almost N$8 billion,” Shafudah said. She emphasized that public criticism often overlooks the scale of the programme and the number of beneficiaries relying on the grant.
“People think it’s just a drop in the ocean, but when you add the sums, it makes a difference,” she added.
Over the past decade, the grant has steadily increased as the government attempts to shield vulnerable citizens from poverty and rising living costs. The monthly pension stood at N$600 in 2016 before being gradually raised to N$1,400 and later N$1,600 in 2024.
Despite these incremental increases, pressure to raise the pension further has intensified in recent years. In the 2023/24 budget, the grant rose from N$1,300 to N$1,400 per month amid rising living costs, pushing overall social welfare expenditure to more than N$10 billion.
The 2024/25 budget further increased the grant by N$200, bringing monthly payments to N$1,600. This period also saw the Ministry of Gender, Poverty Eradication and Social Welfare’s budget rise to approximately N$8 billion, reflecting the government’s prioritization of social grants despite limited fiscal space.
In 2025/26, roughly N$7.2 billion was earmarked for social grants, with N$3.7 billion specifically allocated to old-age pensions. The trend underscores both the growing dependency on the grant and the pressure it places on public finances.
The 2026/27 budget continues this trajectory, funding the N$100 increase while remaining mindful of broader fiscal constraints. Shafudah highlighted that the social sector now consumes a majority share of government spending — approximately 62% of the projected N$88 billion budget — meaning that even incremental increases require careful balancing against other national priorities.
Past leaders, including late former President Hage Geingob, had proposed higher pension targets of N$2,000 to N$3,000 per month, a move treasury estimates warned could push the pension bill above N$10 billion annually — equivalent to the entire budgets of major ministries such as health and education.
For households, even a N$100 increase has tangible impact. Census-linked data shows that roughly 136,000 households rely on the old-age grant as their primary source of income, particularly in rural areas with limited wage-earning opportunities.
Shafudah concluded that while the grant will not solve all economic hardships faced by elderly Namibians, the incremental N$100 rise is a meaningful contribution, reflecting the government’s attempt to balance social support with fiscal sustainability.
