Namibia: Households Struggle to Retain Income Levels - Report

27 October 2020

The Covid-19 pandemic has had a significant impact on Namibian households and overall affected both households and individuals in multiple ways. More often than not, the pandemic had a negative effect on the income of many households - either because household members lost their jobs or their work hours were severely reduced.

According to a recently released Namibia Employers Federation research report by Christiaan Keulder and Lizl Stoman, many households are likely to run out of resources sometime soon, which will cause them to look for financial support from those close to them in the form of either a donation or a loan.

The study stated that there is evidence that household income from remittances is declining and that it will continue to decline as households struggle to retain their normal levels of income.

"Households have changed their usual shopping behaviour to adapt to the changes in their income and general uncertainty about the future. Many households do less frequent shopping and they buy fewer groceries when they do go to the shop," explained Keulder and Stoman.

Furthermore, the two researchers stated this could get worse in the next few months, as food insecurity is set to increase in rural areas toward the start of the planting season in November and food prices are set to increase due to Covid-19 disruptions to various supply chains. "For many households, their dwindling household resources may well coincide with the expected increases in prices."

The researchers said data shows many households are anticipating they are likely to run out of resources sometime shortly. As a result of these factors, household members are also under growing psychological pressure.

The pandemic and responses to it have had a significant financial effect on households, as about 73% of households noted they are having difficulty keeping up with their financial commitments since the lockdown started on 27 March 2020. "Nearly four-in-ten respondents (39%) indicated that they would have great difficulty buying food over the next month, whilst a further 29% indicated that it would be difficult. Close to one-in-ten (6%) said it would be impossible. Nearly half the households (47%) reported that they will not have money to afford essentials in the near future," reads the report.

Close to three-in-four households reported they had savings at the start of the lockdown. Only 28% reported savings to the last four months or more. Three-in-four households have had to use at least part of their savings since then. Some 36% have used between 50% and 100% of their savings already.

Speaking to New Era, an anonymous household head said his savings will run out shortly because of the dependency burden that has increased since the beginning of the lockdown.

"I don't know how I will survive the back-to-school stress that is awaiting us in just a few months; things are just not the same anymore," he stressed. - mndjavera@nepc.com.na

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