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The Root Causes of Poverty National Planning Commission

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The Root Causes of Poverty National Planning Commission The root causes of Poverty National Planning Commission [Type the abstract of the document here. The abstract is typically a short summary of the contents of the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.] 1. Introduction .................................................................................................................................... 3 1.1 Economic growth in Namibia .................................................................................................. 4 1.2 Employment growth ............................................................................................................... 4 1.3 Current poverty and inequality in Namibia ............................................................................ 4 1.4 Approach to investigating the root causes of poverty............................................................ 5 2. Inclusion of the poor into economic activities ................................................................................ 5 2.1 Characteristics of the labour force and economically inactive population ............................ 5 2.1.1 The employed ................................................................................................................. 6 2.1.2 The unemployed ............................................................................................................. 7 2.1.3 Subsistence farming ........................................................................................................ 8 2.1.4 Non Economically Active Population .............................................................................. 9 2.1.5 Wage levels (the working poor) ...................................................................................... 9 2.1.6 The relationship between wages and educational attainment .................................... 10 2.2 Wage levels and the working poor ....................................................................................... 13 2.3 Status of subsistence farmers ............................................................................................... 14 2.3.1 Poverty among subsistence households ........................................................................... 16 2.3.2 Productivity of subsistence farmers ................................................................................. 18 Agricultural practices of crop farmers .......................................................................................... 18 2.3.3 Subsistence farming and the modern economy ............................................................... 19 2.3.4 Conclusion ................................................................................................................................ 21 2.4 Poverty and internal migration ............................................................................................. 22 2.4.1 Internal migration in Namibia ....................................................................................... 22 2.4.2 Migration outcomes ...................................................................................................... 28 2.4.2.1 Labour market ............................................................................................................... 28 2.4.2.2 Access to services .......................................................................................................... 29 2.4.3 Conclusion ......................................................................................................................... 31 2.5 Economically-vulnerable households ................................................................................... 31 3. Exclusion and inclusion from the mainstream economy .............................................................. 33 3.1 Education .............................................................................................................................. 34 3.1.1 Educational quality ........................................................................................................ 35 3.1.2 Enrolment, repetition and drop-out ............................................................................. 36 3.1.3 Conclusion ..................................................................................................................... 38 3.2 Social grants .......................................................................................................................... 39 3.2.1 Old Age Pensions............................................................................................................... 39 1 3.2.2 Grants to Orphans and Vulnerable Children ..................................................................... 41 3.3 Child health and nutrition ..................................................................................................... 43 3.3.1 Child health ................................................................................................................... 43 3.3.2 Child nutrition and malnutrition ................................................................................... 43 3.3.3 School Feeding Programs .............................................................................................. 45 3.4 Fertility and poverty in Namibia ........................................................................................... 46 3.4.1 Fertility in Namibia ........................................................................................................ 46 3.5 Access to services .................................................................................................................. 50 3.5.1. Access to housing ................................................................................................................ 50 3.5.2. Access to clean water, electricity, and sanitation ............................................................... 53 3.5.3. Distance to services ............................................................................................................ 55 3.5.4 Access to services: implications for poverty in Namibia ...................................................... 56 4. Conclusion and recommendations ........................................................................................... 58 Appendix ............................................................................................................................................... 60 Reference list ........................................................................................................................................ 64 Glossary ................................................................................................................................................. 66 2 1. Introduction Namibia is an upper middle income country, one of only eight in Africa. The economy has grown substantially since Namibia’s independence in 1990. This economic growth has made possible high living standards for many, but a large segment of the population has not yet been drawn fully into full participation in a modern economy, with all the benefits that this entails. This is the central reason for poverty in Namibia today. From this perspective it is possible to consider those who are in poverty1 as that part of the population that has not yet been well integrated into the modern economy. Exclusion from the modern economy takes a number of forms, much of it relating to the economic position of adult household members in the labour market: Some are still mainly engaged in agriculture for subsistence, to a large extent not participating in the market economy. (In this report, they will be referred to as Subsistence Agriculture.) Others attempt but fail to get jobs in the labour market, thus remaining unemployed. (the Unemployed) Still others do have jobs, but extremely low paying jobs, reflecting low levels of productivity, and therefore earn too little to escape poverty. (In this report, they will be called Low-wage Workers.) Finally, there are some households who do not have any members that are part of the labour force: They largely consist of persons above retirement age, children, and people who are physically or mentally handicapped and thereby excluded from labour force participation. (The report will refer to them as non-economically active households.) All of these groups have in common that their members are excluded from the modern labour market in different ways. At the household level, it is of course possible that some adult members may be so excluded, whilst others are earning attractive incomes, enabling the household as a whole to maintain high consumption levels, i.e. to live well above the poverty line. But even some of those who do earn good salaries or wages may find themselves in poverty, as the majority of household members may not be earning anything. This report therefore aims to contribute to policymakers’ understanding of the mechanisms which drive and perpetuate poverty and exclusion from the modern economy in Namibia. Section 1 deals with the current macroeconomic climate by considering economic growth and employment growth in recent times. Recent poverty and inequality trends are also discussed in order to assess the extent and location of poverty in the Namibian context. Section 2 examines how inclusive Namibia’s economy is by considering labour market conditions, with a specific focus on the more
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