Abstract
Namibia has a long history of providing a universal and non-contributory old age pension, child grants using means testing and quasi-conditionalities, and other cash transfers. Multivariate analysis presented in this paper confirms that these transfers play an important role in alleviating poverty, especially for the very poor. The poverty-reducing effects of the child grants are likely to increase further as access is being rapidly expanded. However, the impact in terms of reducing Namibia's extremely high inequality is limited. The targeting of the cash transfers towards the poorest groups takes place through two main channels. For the child grant, targeting occurs as a result of the orphan status eligibility criteria, as orphans are over-represented in lower-income households. For the universal social pension, it appears that some of the relatively less poor do not receive it even if they are eligible. Means testing of child grants appears ineffective, even without considering administrative costs.
1. Introduction
Increasingly, developing countries are focusing on the role of social protection programmes in general, and cash transfers in particular, in reducing poverty and meeting the Millennium Development Goals. In sub-Saharan Africa, where progress towards the global poverty goals has been particularly slow, the African Union has called on member states to make social transfers ‘a more utilised policy option’, integrate costed programmes into national budgets and development plans, and share information and experiences across countries (African Union, Citation2006:2). Namibia's experiences as a lower middle-income country are particularly relevant as it is one of just a few countries in sub-Saharan Africa with a long history of state provision of cash transfers to needy population groups. This is linked to the country's past annexation into South Africa, whose programmes for social protection have been described extensively (Lund, Citation1993; Devereux, Citation2001; Van der Berg, Citation1997, 2002).Footnote
Some analysis has already been conducted into specific areas of Namibia's system of cash transfers (Morgan, Citation1991; Subbarao, Citation1998; Devereux, Citation2001; Schleberger, Citation2002). However, important gaps remain in this literature. First, earlier studies have focused mainly on state pensions for the elderly, with less research into other important aspects of the social protection system, notably child grants and the grants for veterans of the liberation struggle, both of which are of growing importance. Second, a comprehensive analysis of the impact of cash transfers on household welfare and poverty has previously been lacking due to unavailability of nationally representative primary data. Third, also as a result of data limitations, little analysis has been done to assess the effectiveness of existing mechanisms for targeting transfers towards the poorest. Drawing on newly available household survey data, this study begins to fill these gaps, by presenting an empirical analysis of one of the oldest and most comprehensive cash transfer systems in sub-Saharan Africa.
The next section describes the cash transfer programmes in Namibia. This is followed by an overview of the data and methodology, and then results from the empirical analysis. The final section concludes.
2. Social cash transfers in Namibia
Social protection is:
broadly understood as a set of public and private policies and programmes undertaken by societies in response to various contingencies in order to offset the absence or substantial reduction of income from work; provide assistance to families with children; and provide people with health care and housing. (United Nations [UN], 2000:3)
Like other developing countries, Namibia also has in place labour-based work programmes, food distribution in times of humanitarian crises, such as the frequent droughts or floods, and an expanding school-feeding programme. However, the country stands out for its long tradition in making available a universal and non-contributory state pension as well as (quasi-)conditional and means-tested child grants. Some other countries in sub-Saharan Africa that provide state pensions to the elderly are Botswana, Lesotho, Mauritius and South Africa. Only Namibia and South Africa also have comprehensive national systems for cash transfers to households with vulnerable children. Indeed Namibia's system of cash transfers was inherited from South Africa, where it was initially set up to protect the white population but gradually expanded to cover the whole population, making it probably the most comprehensive in the developing world (Lund, Citation1993). That the seeds for these benefits of a welfare state were planted under a system otherwise known for its racial inequalities and discriminatory social polices is not without irony (Van der Berg, Citation1997). The main features of the different types of social cash transfers in Namibia are summarised in . The remainder of this section provides further details of the social pensions and child grants, which are the main focus of this article.
Table 1: Main features of social cash transfers in Namibia
2.1 Social pensions
Namibia has three types of non-contributory social pension. The Old Age Pension (OAP) is paid to all citizens or permanent residents who reach 60 years of age, irrespective of past and current employment status and income. In the 2008/09 budget the monthly value of the pension was raised from N$380 to N$450.Footnote1 The Disability Pension (DP) has the same value as the OAP and is paid to those 16 years and above who have been diagnosed by a state doctor as being temporarily or permanently disabled. Blind people and people who are medically diagnosed with AIDS are also included. Upon registering to receive the OAP or DP, recipients take out mandatory life insurance whereby funeral costs to the amount of N$2200 are covered when the pensioner dies. The funeral scheme was introduced on grounds of human dignity, but the application for burial funds also triggers cancellation of the pension card, thus limiting opportunities for fraud. The third type of social pension is a War Veterans Subvention (WVS), for those taking part in the more than two-decade long insurrection and armed struggle that led to the country's Independence from South Africa in 1990.
The social pensions can be traced back to South Africa's Old Age Pensions Act of 1928 and the extension of eligibility to white residents of colonial South West Africa in 1949. In 1973 eligibility was extended to all residents, albeit at highly differentiated rates. The highest pensions were paid to whites at a monthly rate of N$382 and the lowest to people in Owambo, Kavango or Caprivi at a monthly rate of N$55, a ratio of 7:1 (). After independence in 1990, the new constitution enhanced the standing of the country's pension system and, under the National Pensions Act of 1992, the age for eligibility was standardised at 60 for both men and women (previously it had been 65 for men). Pensions were equalised at N$135 in May 1994, which meant a lowering of the pension for whites. Since then, the value of the pension has been raised several times, depending on the availability of fiscal resources. In recent years, pension increases have outpaced inflation – the 2008 real value of the pension was 35 per cent higher than at the time of equalisation and 51 per cent higher than in 1999. The value of the WVS increased even more rapidly, from N$500 in 1999 to N$2000 in 2007, a real increase of 115 per cent. Moreover, the age criterion of 55 years or more has been removed and an annual income threshold of N$36 000 has been set as another criterion. Anyone earning less than this amount and who took part in the liberation struggle is eligible, irrespective of age, assets or employment status.
Table 2: Values of social cash transfers before and after equalisation
2.2 Child grants
There are four main types of child grant. The Child Maintenance Grant (CMG) is paid to a biological parent of a child under 18 years and whose spouse (i) is receiving an old age or disability grant, (ii) has died, or (iii) is serving a prison sentence of 3 months or longer. Unlike the pension and other child grants, the CMG is means tested and restricted to applicants with monthly incomes of less than N$1000. The applicant must also provide a birth certificate and school attendance records if the child is older than 7 years. Attendance records serve as documentation that the child is alive, although this could have behavioural effects similar to those of a conditional grant by creating a monetary incentive for keeping the child in school. (Conditional grants are of growing importance, especially in Latin America.) Moreover, the grant may be extended until the child turns 21, on condition that the child continues secondary schooling. Since 2000 the value of the grant has been N$200 for the first child and N$100 for each additional child (maximum of six children).
The Foster Care Grant (FCG) is paid to any person who undertakes the temporary care of a child who has been placed in his or her custody. The value of the FCG is the same as the CMG but without a ceiling for the number of qualifying children. The Special Maintenance Grant (SMG) of N$200 per month is paid to caregivers of children below 16 years who have been diagnosed by a state doctor as being temporarily or permanently disabled, including blind children and those with AIDS. Finally, a Place of Safety Allowance of N$10 per child per day is paid to an institution or person who is taking care of a child who (i) is under 21, and (ii) is placed in a place of safety by a Commissioner of Child Welfare.
Like the pensions, the child grants are rooted in the pre-Independence legislation adopted from South Africa, notably the Children's Act 33 of 1960, made applicable in Namibia from 1 January 1977 by Act 74 of 1973. Rates paid to different ethnic groups were even more discriminatory than the social pensions. A white caregiver with three children received N$582 compared to N$58.20 to a Nama caregiver, a ratio of 10:1 (also ). According to internal government documents, in 1997 the rates were equalised at a level that entailed a rise for most ethnic groups, at N$160 for the first child and N$60 for each additional child (maximum three). For a white caregiver of three the change meant a 40 per cent decrease in the grant, whereas for a Nama caregiver there was an increase of almost 500 per cent. Before equalisation the FCG was paid at rates that ranged from N$297 per child per month for white families to N$24 per child per month for blacks, a ratio of 12:1. Equalisation implied a reduction in the white rate of almost 40 per cent and an increase for blacks of almost 400 per cent. Initially the value of the child grants was linked to the value of the pension, and when the pensions were raised in 2000 so were the CMG and FCG. Since then the value of the child grants has remained unchanged despite several increases in the pension. As a result, the real value of a CMG or a FCG received by a caregiver of three has been eroded by 39 per cent since equalisation in 1996 and by 23 per cent since 1999. The place of safety grant was also equalised in 1997 at N$10 per child per day, slightly above the rate paid to whites, who had received N$9.76 compared to N$0.80 for blacks. There has been no adjustment in the value of this grant either, with its real value lower in 2008 by 56 per cent since 1996 and 46 per cent since 1999.
The real changes to the value of the different grants types are summarised in .
Table 3: Real change in values of social cash transfers to 2008
2.3 Coverage, targeting and administration
In 2008 the number of recipients of social grants was around 250 000 people or 12 per cent of the total population. No consistent time series of recipients of the social transfers is available, although recording has improved since 2003. presents a picture of the evolution of social transfers since 1990.
Figure 1: Recipients of social cash transfers in Namibia since 1990
Devereux Citation(2001) reports 53 129 recipients of the OAP and DP in 1990. That figure increased by 184 per cent to 150 893 in December 2008. Most of the increase occurred for recipients of the OAP. The number of recipients of the WVS increased from just over 100 in 1999 to 1767 in 2007. For several years after 1990 the number of recipients of the child grants was low. There are several reasons for this. Prior to Independence the CMG was not made available at all in the northern regions (United Nations Children's Fund [UNICEF], 1991). Moreover, there have been several bottlenecks to expanding coverage, including lack of documentation required to register a child and general lack of awareness (Ashby et al., Citation2006).
The coverage of the child grants has increased markedly in recent years, coinciding with the transfer of responsibility for administering the grants to the Ministry of Gender Equality and Social Welfare. In January 2003, 9676 children were registered for a CMG or an FCG (). In December 2008 that number had increased tenfold to 99 490. Access to grants has been expanded, particularly after a campaign to register vulnerable children in six northern regions for food aid and subsequently to convert these to the child grants. Particularly noteworthy is Caprivi, where just 20 children received grants in January 2003 (0.1 per cent of all children under 18 in the region); by December 2008, the number had increased to 5015 (13 per cent of children under 18 in the region).
Table 4: Recipients of child grants by region
There are also large regional variations in recipients of the OAP (). These variations point to impediments in access (errors of exclusion). For instance, in Erongo and Omaheke, 29 per cent and 27 per cent respectively of the age-eligible appear not to receive the pension. However, in some cases recipients exceed those of eligible age, which could be a sign that some not eligible are receiving the pension (errors of inclusion), but is more likely due to inaccuracies in the population projections of people 60 years and older.
Table 5: Recipients of social pension by region
A key feature of the OAP is its universality, in contrast to the CMG and more recently the WVS, where means tests are applied to target grants to lower-income applicants. Before Independence the means test for the CMG was applied to target disadvantaged white mothers earning less than N$300 per month (UNICEF, 1991). Since equalisation of the grants, the income threshold has been raised to N$500 and again to N$1000. This threshold pertains to income of the applicant only, thus assets of the household and income of other household members are not considered. Usually eligibility under the means test is determined by a salary slip or a note from the employer to certify the income level. For the WVS a vetting process is designed to validate the applicants' struggle credentials.
Recipients of transfers receive payments through a bank transfer or collection at a post office or institution (e.g. old age home) or a mobile unit. According to the authorities, about two-thirds of recipients receive their cash grant through a mobile ATM where cash is dispensed upon the match of the name, ID number and the recipient's fingerprint. The total costs of the social transfer system are approaching 2 per cent of Gross Domestic Product and 6 per cent of the total budget (). This represents almost a doubling in real expenditure since the beginning of the decade. Two-thirds of the resources are taken up by the OAP and DP. It is projected that for the fiscal year 2009/10 the share of the budget devoted to the WVS will match that of the CMG/FCG.
Table 6: Government expenditure on social cash transfers
Data on the administrative costs of the social transfer programmes, including those related to means testing, are not readily available and it is not a straightforward matter to isolate those costs directly related to the cash transfer programmes from those related to other programmes of the departments and the general functioning of the ministries. This has led earlier studies to some very different conclusions about the cost of administering the system: Clausen Citation(2006) estimated that the administrative cost constituted about 4 per cent of the total cost of the pension scheme, based on the cost of delivering cash disbursements by the mobile units, whereas Subbarao Citation(1998) suggested that the real administrative cost of the social transfers was more like 36 per cent of the value of the transfer.
3. Data and methodology
The empirical analysis relies on the Namibia Household Income and Expenditure Survey (NHIES) carried out from September 2003 to August 2004. The NHIES was based on a national two-stage probability sample of 9801 households. It collected basic information about the household and its members, including household incomes and infrequent expenditure, as well as recording over a 4-week period all expenditures and receipts. There were 13 such 4-week cycles, each with a new set of households. Carrying out the survey over a full 12-month cycle meant that seasonality effects were limited.
Two key methodological issues had to be addressed prior to the analysis. The first related to the appropriate measure of household welfare, given the income and expenditure data, and the second to the definition of recipients of social transfer, given some ambiguity in the survey instrument. Since household income was captured excluding savings and deductions by employers but including the value of own production net of inputs, it should be consistent with the definition of household consumption expenditure used by the Central Bureau of Statistics (CBS). However, as discussed at length elsewhere (Levine et al., Citation2009), there is systematic under-reporting of incomes, especially at the lower end of the income distribution. Household consumption expenditure is therefore the preferred welfare variable for this analysis, given that the focus of the analysis is on poverty, but the effect of using different welfare measures is illustrated. Throughout, household welfare is expressed in adult equivalents, following CBS (2008), where a person aged 0 to 5 = 0.5, aged 6 to 15 = 0.75, and aged 16 + =1.0. No adjustments are made for scale economies.
The second methodological issue was related to the definition of social grant recipients in the NHIES, where each household member was asked to declare social pension income for the past 12 months. Inspection of the data made it clear that ‘Old age pension’ included recipients of types of pensions other than just the OAP. In these cases it was natural to assume that the pensioner would have mixed public and private sources of pensions and reported one total amount to survey enumerators. We define as OAP recipients only households that have one or more members 60 years or older, and OAP income was capped at an annual maximum of N$3000 per age-eligible household member. Any reported pension income above this amount was regarded as emanating from a private source. Concerning the DP and WVS, the survey instrument was quite explicit in capturing this information but, given their small numbers, the analysis is less focused on these.
The survey captured child grants under a heading of ‘Family and other allowances (including state maintenance and child grants)’, which is open to interpretation of the respondents and enumerators and again may have captured transfer income other than merely the social grants. We adjusted to define child grant recipients as households with at least one age-eligible child who had lost one or both biological parents and who reported an income in this category. Since the number of recipients of the FCG in 2003/04 was relative small (fewer than 4000 nationwide) the results are reported for the two grant types together, but would mainly refer to the CMG.
Compared to administrative records the adjusted survey data slightly underestimate the total OAP amounts received (by 17 per cent) and the number of recipients (by 6 per cent), while slightly over-estimating the total CMG/FCG amounts received (by 14 per cent) and the number of recipients (by 6 per cent). The fact that administrative and survey data are closer in number of recipients than aggregate amounts could be a result of difficulties in distinguishing annual from monthly amounts in the survey. Nevertheless, some degree of divergence is expected simply because of the statistical sampling errors and challenges in administrative recording, and the estimates appear sufficiently close to proceed with the empirical analysis.
4. Impact on household welfare
The study uses the decomposable class of poverty measures proposed by Foster et al. Citation(1984), defined as:
4.1 Impact on poverty
The analysis of the impact on poverty of the cash transfers is descriptive and static. It measures the effect of the cash transfers as the difference in the three poverty measures that arises from using the full specification of the welfare variable (‘With transfers’) as compared to a welfare variable constructed to exclude the income from social transfers (‘Without transfers’). For simplicity, social transfers are assumed not to lead to behavioural changes, nor generate any externality or general equilibrium effects. The first set of results () shows that severe poverty affects 20.2 per cent of the population, whereas poverty (including severe poverty) affects 37.8 per cent of the population, when using household consumption expenditure as the welfare measure and including income from social transfers. Thus, roughly the bottom quintile of the population are severely poor, and the second quintile poor but not severely poor. When using household income as the welfare measure, however, severe poverty rises to 51.3 per cent and all poverty to 59.1 per cent. In other words, the poverty level is highly sensitive to the choice of welfare measure. The difference in results can be ascribed to the aforementioned under-reporting of income by the poor.
Table 7: Direct effects of social cash transfers on levels of poverty
The poverty reducing impact of the social transfers can be discerned by comparing these results with those obtained by subtracting transfers from the welfare variable. These are the ‘Without transfers’ results reported in . P 0 so calculated is considerably higher, 25.9 and 42.0 per cent for severe poverty and overall poverty, respectively. The direct effect of the transfers is thus to lower poverty incidence at the two poverty lines of severe poverty and overall poverty by 22 and 10 per cent, respectively. This effect is statistically significant, especially at the lower-bound poverty line. The greater positive impact of the social transfers on the poorest is also reflected in the appreciably lower levels of P 1 and P 2 when comparing household consumption expenditure with and without cash transfers. These findings are not robust to an alternative specification of the welfare variable using household income, where there is no significant difference in P 0 irrespective of whether transfers are included or not (although changes to P 1 and P 2 are significant).
To assess the impact of the social cash transfers on household welfare, controlling for demographic and other characteristics, a multivariate probit regression was run to determine the impact of grant receipt on the probability of the individual being poor. The dependent variable is a binary variable taking the value of 0 if the household is non-poor and 1 if the household is poor. Results show that the OAP had a clear and significant negative association with P 0 (i.e. the pension lowers the probability that the recipient lives in a poor household), both at the lower and upper-bound poverty lines (). On the other hand the CMG/FCG and the DP had a significant negative association with poverty incidence only at the upper bound. In contrast the WVS, in the more limited form this pension took at the time of the survey, seems to have had only a marginal (and insignificant) effect on lowering poverty.
Table 8: Probit regressions: Estimates of grant receipt on incidence of household poverty (P0) at two poverty lines (using adult equivalent household consumption expenditure)
The regression analysis is deepened by focusing on the effect of grants on poverty measures that are more sensitive to the depth and severity of poverty. contains the summarised results of Tobit regressions, which take into account that the dependent variable (P 1 or P 2) is censored in value (0 to 1). The table shows that the effect of the OAP is quite strong for both these poverty measures and at both poverty lines. All four coefficients for receipt of the CMG are also significant, indicating that this grant does have an impact in reducing both poverty measures. Thus these grants strongly reduce the more severe forms of poverty. Disability grants also play a significant role in reducing such poverty, but only at the upper-bound poverty line.
Table 9: Tobit regressions: Effect of grant receipt on household poverty gap ratio (P1) and squared poverty gap ratio (P2) at two poverty lines (using consumption expenditure measure of welfare)
4.2 Inequality and targeting
While their positive impact on poverty reduction is quite clear, the transfers have less of an effect on reducing Namibia's extremely high level of inequality. Gini coefficients were computed with and without the various transfers ().Footnote2 Given overlapping confidence intervals, it can be concluded that the grants make no statistically significant difference, at conventional levels of confidence, in the standard measures of inequality when using household expenditure, and barely significant when using household income. This is not surprising: inequality decompositions often show that grants have limited effects on measures of distribution but a larger effect on poverty, given the overall magnitude of grants compared to other income sources in the economy.Footnote3
Table 10: Gini coefficients with and without social cash transfers
While the impact on the Gini coefficient may be small, a look at the welfare distribution can further explore the distributional effects of social transfers. displays the Lorenz curve for total household welfare and concentration curves for various income sources. The line furthest below the 45 degree line of perfect equality is wages and salaries, which suggests that the overall effect of this type of income is inequality increasing for more than 80 per cent of the population, up to where the curve crosses the Lorenz curve. The concentration curve for social pensions lies above the 45 degree line, suggesting that this type of income goes disproportionately to poorer individuals and thus decreases inequality. The 40 per cent poorest individuals command almost 70 per cent of total pension income, making this a highly ‘pro-poor’ intervention, but only 50 per cent of total child grant income. The shape of the concentration curve for child grants indicates targeting towards the poorest up to about the 25 percentile, but then the curve starts bending inwards, reflecting less effective targeting.
Figure 2: Lorenz and concentration curves
The main eligibility criterion for the child grant (access is largely limited to single or double orphans) ensures that there is some targeting of poor households, as poorer households tend to have higher numbers of children and orphans are over-represented among lower income households. Thus 53 per cent of the population in the poorest two quintiles are children, compared with only 32 per cent in the richest quintile, and in the poorest two quintiles almost 18 per cent of children are single or double orphans, compared to only 9 per cent in the richest quintile. Consequently, the bottom two quintiles contain more than 60 per cent of all orphans. On the other hand, targeting within the group of eligible may nevertheless be less accurate, as will be shown below.
The finding that social pensions are better targeted towards the poor than the child grants is somewhat surprising given the universality of the pensions and the means test of the child grants. One explanation could be that at the time of the survey the means test was not applied rigorously. Also, linking the means test threshold to the individual caregiver and not the household allows for the possibility that better-off households receive the grants. There is corroboration for this in the data. The share of eligible households that receive child grants is not significantly different whether the household income is above or below the N$1000 per month threshold, a finding that is robust to different specifications of the household welfare variable ().
Table 11: Share of eligible households receiving child grant by means test threshold (% of eligible households)
4.3 Comparison with South Africa
A comparison with South Africa is instructive, given the origins of the Namibian social grant system and as Namibian policy-makers are contemplating introducing a means test for the OAP. The old age pension in South Africa is means tested and applies to males from age 65 and women from age 60. As has already occurred in Namibia, this gender distinction is now being eliminated in South Africa. The means test is set relatively high for the OAP in comparison to the earnings of most workers, with the effect that some 80 per cent of the age eligible also qualify in accordance with the means test to get such pensions. The South African child support grants are not linked to criteria other than age and the means test, although a non-binding, and as yet untested, conditionality of school attendance has been introduced for the child support grant in 2010. This means test is stricter than the one for the OAP (although it was recently relaxed somewhat), thus fewer than half of age-eligible children benefit from this grant. Criteria formerly applying to the South African child maintenance grants relating to household structure and the position of the caregiver (who usually had to be a single parent) have now been abolished. At the end of 2008, South African grant values were N$940 per month for both the OAP and the Disability Grant, N$210 for the Child Support Grant, and N$650 for the Foster Care Grant.Footnote4
According to recent survey data, 87 per cent of South Africa's age-eligible receive the pension compared to 82 per cent of Namibia's (). But South Africa has a means test for social pensions despite its almost universal nature, and it has some effect on targeting. In the top quintile in South Africa, 70 per cent of age-eligible access the pension, as against 74 per cent in Namibia. At the other end of the distribution, 94 per cent of the age-eligible among the poorest quintile receive the social pension in South Africa, compared to 87 per cent in Namibia.
Figure 3: Targeting of social pensions in Namibia and South Africa
While the universal model pursued by Namibia and the means tested model pursued by South Africa do generate different outcomes, these differences are not great. What is particularly striking is the low effectiveness of the means test in South Africa in targeting, mainly because the threshold is high. Any assessment of the two systems would therefore need to carefully balance the costs of administering the means test, including the associated effects on incentives from the much higher level of the pension in South Africa, with Namibia's slightly less efficient targeting.
For child grants, the picture is different (). In South Africa, 57 per cent of age-eligible children get the grant, compared with only 13 per cent in Namibia in 2003/04 (although the programme has expanded in recent years). Eligibility for child grants in Namibia is confined to those meeting specific criteria unrelated to the means test (largely caregivers of orphans), whereas in South Africa only the means test and age criteria apply. Despite the official means test, there is no evidence of effective targeting of the grants to poorer households within the group eligible by other criteria in Namibia. In all quintiles, access to the grant is low, but it peaks as a proportion of the age-eligible in the middle quintile at 15 per cent, and is lower in the top quintile. This targeting largely occurs through the eligibility criteria, as more children and orphans live in poor households. In South Africa evidence of targeting is much stronger, with 85 per cent and 69 per cent of households with age-eligible children receiving the grants in the bottom two quintiles, compared to a still high 27 per cent in the fourth quintile and only 7 per cent in the top quintile.
Figure 4: Targeting of child grants in Namibia and South Africa
5. Conclusions
Social grants have been shown to be a highly effective public policy intervention for poverty alleviation in post-Independence Namibia, especially in terms of improving the welfare of the very poor. The ongoing scale-up in access to child grants by the Government of Namibia is thus likely to contribute to a continued reduction in poverty, especially if the decade-long erosion in the real value of the child grants is reversed and more systematic adjustments such as indexation are introduced. In spite of the ‘pro-poor’ features of the grants, their impact on Namibia's extremely high level of inequality has been limited, which is consistent with evidence from elsewhere. Targeting of poor households has resulted less from means testing and more from the way the child grant targets orphans, who are over-represented in poor households, and as some age-eligible among the non-poor appear to have opted out of the universal social pensions system. Evidence from South Africa also does not lend support for introducing a means test for the OAP in Namibia, but there is a need for better information about the costs of administering the means tests in particular and about delivering cash transfers more generally.
Acknowledgements
The authors are grateful to the Central Bureau of Statistics in Namibia for access to the household survey data, and to the Ministries of Gender Equality and Child Welfare, of Labour and Social Services, and of Veterans' Affairs, and the Office of the Prime Minister for administrative data and information on the system of social cash transfers. They also thank Fabio Veras Soares for helpful comments. Opinions expressed in this article are those of the authors and not the organisations they work for.
Notes
An earlier version of this article was presented at the Poverty Reduction, Equity and Growth Network Conference on ‘Policies for Reducing Inequality in the Developing World’ at the Institute of Social Studies in The Hague, 3–4 September 2009.
1In early 2010 US$1 = N$7.50.
2CBS (2008) provides further international comparison of Namibia's inequality.
3See Armstrong & Burger Citation(2009) for an application to South Africa.
4The N$ and South African rand are pegged at par value.
Related Research Data
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