Basic income grant immediately feasible

26 February 2021 | Social Issues

Windhoek • [email protected]

Supporters of a basic income grant (BIG) for Namibia say not only is its immediate implementation feasible, but warn that without BIG, Namibia’s current economic blues will likely worsen already worrying levels of poverty, crime and other crippling social issues.
“We must consider what the costs are for Namibia if a BIG is not introduced. This includes rising levels of poverty, inequality, unemployment and crime as well as general social tensions. Thus, it seems that despite and perhaps because of the dire economic circumstances, a national BIG would be a necessary intervention as part of a ‘turn-around strategy’, labour expert Herbert Jauch says.
Rinaani Musutua of the BIG Coalition of Namibia and Jauch say that while some have argued the costs of implementing BIG render it as “wishful thinking”, there are many ways to finance a BIG realistically and under current conditions.
“There are many ways that Namibia could finance BIG. The first and most important thing to understand about the cost of BIG is that it is much less costly than it sounds. When considering the initial cost of BIG, one needs to understand that its net cost is substantially lower,” Musutua explained.
Calculated on a N$500-monthly grant to eligible Namibians aged 18 to 59, the real cost of a BIG scheme would total around N$4 billion annually, which equates to around 5.5% of the budget, Jauch and Musutua said.
This is based on around 1.14 million eligible recipients.

Strategies
“Financially it seems possible with some shifts in the national budget as well as new measures, for example a resource tax and the establishment of a sovereign wealth fund to ensure that national resources benefit the public as a whole and not just a few individuals,” Jauch says.
Musutua adds that “despite Namibia’s current economic difficulties, a BIG scheme could become an immediate reality and could be affordable depending on the government’s political will”.
BIG would not only directly put food in the mouths of thousands of food insecure Namibians, but “will provide the much-needed economic stimulus and an effective anti-poverty measure”.
They say one way to recover BIG costs is through VAT as the recipients of the grant will use parts of the money to purchase goods and services on which VAT is levied. “Thus around 10% of the BIG payments will be recovered though VAT,” Jauch explained.
Moreover, Musutua explains that “to effectively reduce inequality in Namibia, the most obvious options for government would be to raise income tax rates for high income earners as part of BIG funding”.
She notes that around 300 000 Namibians earn above the personal income tax threshold of N$50 000 a year, and while BIG will be paid to all of them, the money can be recovered through income tax adjustments. “Also, higher income earners could be taxed slightly higher to achieve a redistributive effect in favour of low-income earners.”
Another recommendation by experts is to dedicate a portion of the SACU revenues to finance BIG, and to consider a natural resource dividend fund model by using mining and fishing taxation revenues as a financing tool.
Jauch pointed out that a BIG is likely to make interventions like the food bank and disaster relief measures superfluous.

Widespread benefits
Jauch and Musutua stress the benefits of implementing a BIG as soon as possible, as a critical measure to address cyclic poverty, food insecurity, and other social dilemmas the country has been grappling with for decades.
Jauch says the focus on implementing a BIG needs to viewed not only on its cost, but its longer term benefits. “Reduced poverty, improved educational outcomes, better health standards, reduced crime levels, great social cohesion.”
Both stressed that BIG would constitute a direct economic stimulus package by creating local demand for basic consumer goods and thus it would “be a counter-cyclical economic intervention to halt and possible reverse the economic downturn that has taken hold of Namibia and many other countries in the covid-era,” Jauch says.
Musutua concludes that BIG “is an investment in human development”.

Dire
More than 50 million people in the Southern African region face food insecurity due to challenges brought by the Coronavirus (Covid-19), according to the Southern African Regional Vulnerability Committee in its Regional Vulnerability Assessment and Analysis (RVAA) Programme report.
According to the 2020 Global Report on Food Crises, released by the United Nations, 400 000 people in Namibia are estimated to be severely food insecure, while 800 000 were in a stressed food situation.
Musutua pointed to a July 2020 UNDP report that recommended the immediate introduction of temporary BIG schemes in the world’s poorest countries, including those were poverty and hunger are rife and the pandemic had worsened their vulnerable incomes and living standards.

Similar News

 

US support for HIV facilities

1 week ago - 05 May 2021 | Social Issues

To continue increasing access to HIV services for all people in Namibia, the US Embassy in Namibia has supported the opening of two HIV testing...

Building assistance for Okuryangava orphanage

1 week ago - 30 April 2021 | Social Issues

Building material valued at N$50 000 was handed over to the Okuryangava Children’s Home by RND Holdings on Thursday (29 April).The home houses around twenty...

Cash support for SPCA

2 weeks ago - 27 April 2021 | Social Issues

The Olympia Eye and Laser Clinic sold face masks to clients, with all proceeds dedicated to the SPCA. In this way, N$16 650 was raised...

Teenage pregnancies, abuse discussed

2 weeks ago - 23 April 2021 | Social Issues

An open dialogue was held in Windhoek on Thursday to discuss the causes and frameworks in place to strengthen efforts to reduce learner pregnancies and...

Struggle kids ‘stigmatised’

2 weeks ago - 22 April 2021 | Social Issues

Children of the liberation struggle, also known as ‘struggle kids’, feel it is hard for them to secure employment outside government, because there is a...

Seeing the future

3 weeks ago - 20 April 2021 | Social Issues

Tanja Wilckens of Pro-Specs and Marlize Hall of African Eyes Optometrist donated their time to performing eye-screenings on 53 learners of N/a’an ku sê Primary...

Head of UNAIDS meets DREAMS girls

3 weeks ago - 15 April 2021 | Social Issues

The executive director of the Joint United Nations Program on HIV and AIDS (UNAIDS), Winnie Byanyima, recently visited beneficiaries of the US-funded DREAMS project in...

Small increase for GIPF pensioners

4 weeks ago - 14 April 2021 | Social Issues

The Government Institutions Pension Fund (GIPF) announced a 3% pension benefit increase, effective 1 April 2021 for all GIPF pensioners.In a media release, the GIPF...

In love with Dairy Love

1 month - 01 April 2021 | Social Issues

Namibia Media Holdings’ staff recently collected funds with support of Namibia Dairy’s latest product, Dairy Love, to donate to the Cancer Association of Namibia (CAN)....

Taking hands with MealForTwo

1 month - 24 March 2021 | Social Issues

Food security in Namibia remains a big concern and the need for assistance is increasing as more families find themselves in a desperate situation brought...

Latest News

Chill with Windhoek Express

16 hours ago | Art and Entertainment

Recurring events• 07:00 Bio-Markt / Green Market at the Stephanus Church (Dr Kenneth Kaunda Street) in Windhoek until 12:00.• 08:30 The weekly Inspire Market features...

Government in catch 22 on...

16 hours ago | Local News

While acknowledging that the majority of Namibians rely on the national broadcaster for information, Prime Minister Saara Kuugongelwa-Amadhila conceded that government cannot meet its employees’...

Murorua takes over BAN reigns

18 hours ago | Banking

The Bankers Association of Namibia (BAN) announced that Nedbank chief executive Martha Murorua has taken over the reigns as chair from Ester Kali, CEO of...

Bowling on a roll

19 hours ago | Sports

Namibia Bowling Association (NBA) president Michael Wells has expressed his pleasure at the improved performance of players at the recently held Namibia National Bowling Championships.The...

Virtual international training for local...

19 hours ago | Sports

Eight Namibian soccer coaches will take part in an international instructor’s course organised by the German Football Federation and Botswana Football Association to help improve...

Old Mutual under ‘10 strongest...

19 hours ago | Business

The 2021 Brand Finance report has ranked Old Mutual in the top 10 strongest brands, as well as in the top 100 most valuable insurance...

Fire safety measures every homeowner...

1 day - 11 May 2021 | Disasters

The recent blaze that unfolded along the Cape’s iconic Table Mountain was a reminder of the very real threat fire poses to homeowners. It is...

Conservancy feeds their own children

1 day - 11 May 2021 | Society

For a second consecutive year, members of the N≠a Jaqna Conservancy are using part of their income to provide food to all registered schools and...

More support of Nam’s sustainable...

1 day - 11 May 2021 | Infrastructure

Namibia’s finance minister Iipumbu Shiimi and German ambassador Herbert Beck signed an agreement on financial cooperation for loans between the two countries earlier this week.The...

Load More