18 November 2011

Namibia: Mwinga Speaks Out On His Findings


Hard — To please economist and researcher Martin Mwinga recently surprised all and sundry when he announced that, contrary to the popular belief that Namibia's unemployment rate stands at 52 percent, the figure is actually far less. We put him on the spot to back up his claims.

New Era: You recently dropped a bombshell by stating that unemployment stands at 28.4 percent. On what did you base your claim?

MM: "Basically the analysis is based on a 2008 labour force survey that was done by the Ministry of Labour and Social Welfare. These surveys have been carried out every four years since 1997. When the outcome of the latest survey was released last year, I started reviewing it because it stated that unemployment had increased from 36 percent to 51 percent and this is not just a number. It is something that affects human beings because essentially, you are saying people have lost their jobs since the last survey was carried out.

"I analysed the figure and it meant that we have retrenched 123 000 people between 2004 when the last study was done and 2008 when this particular study was done. This is a significant number. I looked at which sectors might have collapsed during that particular period. My analysis said that 95 percent of those who were classified as unemployed were in rural areas. My analysis further confirmed that the 95 percent is made of subsistence farmers. The international standards say you must include subsistence farmers in your list of employed people. So the (labour) ministry did not follow the international trend.

"The official report also said the fishing sector has declined from 12 000 employees to 1 300, which was not the case. It also said government has retrenched 13 000 workers. I checked it up with government and what I found was that government has actually increased its workforce. It also said the education sector was employing more people in the past than it did in 2008, yet the Ministry of Education has been building schools. So who is teaching at these schools? This is a distortion. I then started adding back all people that were said to have lost their jobs after establishing the true situation. And believe me, I was largely conservative because if I was not, the figure could even be less than 28 percent that I finally arrived at. So 51 percent for me is a non-starter."

New Era: Using the 51 percent, which is official, does it then mean we have the highest unemployment rate in the region?

MM: "At the moment, we are the highest in the region, if you exclude Zimbabwe, which is obviously a special case. Namibia has the highest unemployment rate in the region, followed by Kenya, which has 40-something percentage of unemployment. Yet our economy is generally doing better than the economies of countries like Zambia, Lesotho, Malawi and so forth. So it didn't make sense to me. It was a non-starter.

The ILO (International Labour Organisation) says subsistence farming should form part of the employed masses but this was not done in our case."

New Era: What prompted you to carry out the study that you did?

MM: "My desire to do unemployment research has come a long way. I have already approached the Ministry of Labour as well as the Social Security Commission about this but I did not get a positive answer. But what really pushed me this time around was that as soon as I saw the official statistics last year, I knew that something was wrong. So in search for solutions for our country, I decided to come up with a proper, detailed study."

New Era: What were the defining differences between the study you did and the one carried out by government?

MM: "As analysts, we are the users of statistics. What I did was to basically take what they have released to see if they have left out crucial things and whether there are errors in their report. So the difference is when they say that government has retrenched 13 000 workers, which was not the case and also those jobs purportedly lost in the fishing sector. I have corrected those figures.

"When my report came out last week, the Ministry of Labour was angry with me. So I forwarded them my report and challenged them to dispute it.

Up to now, they haven't disputed it. I think they have come to their senses. The fact that they have approached the World Bank for a review of the statistics also means that there is something (wrong)."

New Era: When we talk about unemployment, what type of people are we referring to?

MM: "In the first place you have to look at the survey itself. Who are the unemployed? What the official report suggests is that 123 000 people have joined those that already did not have jobs. So it took our unemployment to 347 000 people. You find that the majority of these people are in rural areas. There was a misclassification. Omusati, Ohangwena and Kavango regions are classified as having the highest unemployment rates. The rates of unemployment in these regions have tripled compared to the last survey done. Then you ask yourself, what industries have really collapsed in these regions to triple unemployment figures? And this figure is high among the people aged 15 and 29. One thing that the policymakers are not asking themselves is - who is unemployed?

"We invented TIPEEG, but whom are you targeting? We must target the segment that is unemployed. We talk about investing in tourism yet 95 percent of those unemployed are subsistence farmers. How will they (farmers) benefit from TIPEEG? These are the type of questions we should ask before we implement the policy. The problem in Namibia is that we just react without studying the outcomes properly. There are many types of unemployment. You have cyclical unemployment, structural unemployment and so on. So before you design a policy, you should know what type of unemployment are you dealing with. We haven't done that.

"You must for example know that out of that 51 percent, how much of it is structural unemployment. Because with structural unemployment, even if your economy grows by ten percent, your unemployment would remain the same. That's why you need a policy specifically designed to deal with this kind of unemployment. The official report shows that we had the highest economic growth between 2004 and 2008 yet employment had a negative growth. Our unemployment is not temporary - it is permanent and therefore structural. But we pumped in money as if it were a cyclical unemployment or temporary unemployment that we are fighting against. "

New Era: Can someone who sits at home by choice, say a housewife, be categorized as unemployed?

MM: "If a housewife could have worked but now she stays at home doing some work, she could be classified as a worker. But she would be classified as unemployed because she is not involved in any economically active work. But if she is doing valuable work at home, she might be receiving what we call in-kind payment because if you didn't have that wife, you would have brought in someone to do that job."

New Era: Government, after receiving the labour ministry results, came up with TIPEEG to which N$14 billion has been channeled. Would you say this initiative was born out of misinformation?

MM: "When the 51 percent unemployment was announced, government organized an unemployment conference. That conference came up with resolutions on how to tackle this issue. It was about the same time when the former prime minister (Dr Hage Geingob) made some statement criticizing those findings. Government resolved to implement measures and they delegated the National Planning Commission to come up with something to counteract unemployment. So this reaction was based on the 51 percent. Some of us could not attend that conference but I would have expected them to assemble a task team to come up with a quick analysis of what really went wrong. They should have visited the data and tell us why there was a collapse in the agricultural sector as alleged in the report.

"The official report said employment in the agricultural sector has collapsed by 50 percent. I once asked the ministry of labour as to why there was a decline in jobs in the agricultural sector. Their answer was that it had something to do with land reform. I was like 'Jesus! We are in trouble just like Zimbabwe'. But then I realized that it was not people at commercial farms that lost their jobs - it was subsistence farmers yet these were not affected by land reform. So they should have taken time and broken down the data to determine what were the causes of job losses in each sector. At least 70 percent of TIPEEG should have been channeled to rural areas because that is where unemployment is higher. But TIPEEG is targeting infrastructure and public works, which are mainly in urban as opposed to rural areas."

New Era: We now have two contrasting unemployment statistics? Which one must Namibians trust?

MM: "The official government statistic should be followed. At least two donors have called me recently and said they did their own analysis of the Namibian unemployment situation and their findings are almost the same as mine. But until government takes action on the statistics presented to it by the labour ministry, the country's unemployment rate remains 51 percent. Obviously they have now approached the World Bank to look into its statistics for them, although I would have expected them to approach the ILO like Zimbabwe once did to reconcile their contrasting figures."

New Era: And what's the way forward in clarifying and probably reconciling these differing statistics?

MM: "Right now, we are aware that government has approached the World Bank to assist it with someone to look into this. The World Bank is an independent body and they should be given a chance. What we are likely to see is the issuance of another labour survey, especially if flaws are found and if there are difficulties reconciling what is at hand."

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