11 June 2012

Namibia: Need for New Poverty Reduction Policies

Government's commitment to spend billions of dollars on poverty reduction and job creation - nearly N$2 billion during the current financial year - has so far failed to yield tangible results, says local economist Martin Mwinga.

Even though the interventions are well intended "there is enough evidence on the ground showing that they did not yield positive results as the rate of unemployment, poverty and income inequality remains stubbornly high," says Mwinga.

Besides the N$2 billion committed this year, government has also committed itself to spend N$14,7 billion as part of the Targeted Intervention Programme for Employment and Economic growth (TIPEEG) until 2014/15.

Mwinga urged the government to "re-think the whole rural development strategy" re-examining the "historical trade patterns and the way [government] conducts business internationally."

Mwinga says before billions of dollars are spent on tackling unemployment or poverty, problems underlying and causing unemployment must be identified so that appropriate policies and interventions can be matched with the identified problem.

Mwinga has just released a new study titled 'Unemployment in Namibia: Measurement Problems, Causes & Policies' in which he calculates the unemployment rate and looks at the unemployment situation in the country.

He also makes a number of recommendations on tackling poverty and income inequality levels.

He suggests, among others, that to resuscitate the rural economy in Namibia it is necessary to implement an effective integrated rural development strategy geared towards job creation, wealth creation and poverty reduction on a large scale.

The report places a great deal of emphasis on agriculture on which the rural people rely for a living. According to Mwinga the government in partnership with the private sector should establish a commodities exchange that will provide marketing infrastructure for agricultural products in Namibia.

"Improving agricultural marketing systems is increasingly being seen as important in ensuring successful implementation of various agricultural development initiatives, which have been launched to raise agricultural output and productivity in Africa.

"Agricultural commodity exchanges, though by no means a panacea for all the weaknesses in the agricultural sector, is seen as having the potential to improve the functioning of agricultural markets by improving price formation, market transparency and boosting regional trade, thereby raising farm output and rural incomes, as well as enhancing food security.

"Government currently owns silos which must be leased or donated to the new commodity exchange to use as delivery locations," recommended the report.

Mwinga says there "is a dire need to resuscitate Namibia's rural economy and advance the cause of rural areas as potential engines of economic growth in Namibia."

The strategy should have an understanding of the sources of growth linkages in Namibia's rural economy, putting in place deliberate intervention measures to support the underlying sources of growth in rural areas.

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