Government has developed the ability to disburse grants straight to beneficiaries but paid private companies N$116 million last year to distribute various grants to over 700 000 vulnerable Namibians.
The Ministry of Finance, which now administers the paying of grants, is adamant it can’t afford the UN’s stipulated US2.15 per day (around N$1 400 per month) as a universal basic income grant (UBIG) but agrees that a more efficient process could free up more funds for grants instead of the administration thereof.
The startling information was revealed in a detailed response from the Ministry of Finance to The Issue’s questions on the administration of grant payments.
Long-time basic income grant agitators have expressed exasperation at the cost of administering grants and have called for the government to dust off their International Labour Organisation (ILO)-backed proposals that aim to address the fragmented and costly nature of the country’s social grants regime.
Rinaani Musutua said instead of giving the money to the deserving poor, the government is wasting it on administrative bureaucracy.
She said the Basic Income Grant Coalition “keeps telling the government means-tested grants are administratively costly and a nightmare to handle. She said self-targeting grants such as a UBIG would reduce administrative costs and are effective at reaching the intended recipients, which means tested grants “have never been able to achieve”.
She insisted, “UBIG has been proven by 130 pilot studies across the world to be the most cost-efficient way to tackle poverty.”
Musutua asks rhetorically if the inefficient services are not intentionally persisted with to ensure that cronies within the ruling class’ patronage network benefit from such deals.
UBIG activists are frustrated that after almost two decades of research and lobbying, the government’s response is haphazard and scattered, costing more than it should, while 43% of Namibians live in multidimensional poverty. The Namibia Statistics Agency’s 2021 Multidimensional Poverty Index (MPI) Report said almost half
of Namibians face deprivations across multiple aspects of life, including health, education, and living standards. This is further broken down, with 59% of the rural population and 25% of the urban population experiencing multidimensional poverty.
The Multidimensional Poverty Index aims to inform and guide poverty reduction strategies in Namibia and was developed as part of a collaboration led by the NSA, with UNICEF, UNDP, UNFPA, and OPHI.
The root causes of poverty, as identified by the National Planning Commission of Namibia (NPC), include inequality and marginalisation, lack of access to basic services (like clean water and sanitation), and the impact of climate change and conflict. The NPC also highlights food insecurity, educational challenges, and employment barriers as key factors contributing to poverty.
In May 2024, a state of drought disaster was declared by the government, and in February, then Prime Minister Saara Kuugongelwa-Amadhila announced that 1.4 million people were benefiting from the national drought relief programme, which assists over 384 935 households across all 14 regions.
Namibia’s latest census shows that the unemployment rate remains stubbornly high, and the minimum wage of N$18 per hour had many established businesses moaning about its 1 January 2025 implementation.
Teachers Union of Namibia (TUN) secretary general Mahongora Kavihuha is adamant that even those in work need help to cater to their basic needs, as incomes cannot compete with the rate of price hikes of basic goods and services monthly.
“Low-wage workers carry the economy, and the structural problems in the economy force those workers to subsidise the rich,” said Kavihuha.
He insists workers need help.
The Issue’s simple calculations show that a person working from 09h00 to 17h00, five days a week (in town) earning N$3 024 per month, which minimum wage actually means, if transport (by taxi) costs N$520, Kavihuha’s plea rings true.
The non-banking financial services regulator, Namfisa, said Namibian workers owe cash loan companies N$8.1 billion.
IN-HOUSE
According to Michael Humavindu, executive director of the Ministry of Finance, the government has embarked on a review of its business processes, leading to the development of an in-house integrated database system called ISAS. This system, integrated with the National Population Register and the Social Security Commission, aims to streamline grant administration, data management, and payment processes, thereby reducing processing times and enhancing efficiency.
Work is underway to enlist other offices, ministries and agencies (OMAs) that are responsible for various other social safety nets. The integration allows ISAS to draw information from other databases needed for the approval and verification of grants. For instance, the NPRS is needed to validate the authenticity of beneficiaries and their documentation. The SSC database is sourced to determine the employment status and income levels of prospective beneficiaries.
While the Ministry of Finance declined to provide a detailed breakdown of these fees, citing sensitivity to future bidding processes, it revealed a budgeted amount of N$116 750 000 for the 2024/25 financial year for grant payment delivery.
The ministry acknowledges that the current cash payment mode “attracts huge administration costs.”
Plans are underway to progressively eliminate cash payments by introducing digital payment platforms through commercial banks, NAMPOST, and an instant payment solution offered by the Bank of Namibia. This shift aims to create a “seamless process from administration to payment” and reduce associated costs.
Moreover, proponents of a universal basic income grant argue that it could drastically simplify the administrative landscape and further reduce costs. Currently, the government manages multiple distinct grants, each with its own criteria, application process, and administrative overhead.
The Namibian government administers these social grants (2024/25 budget):
Old age grant: N$3.6 billion benefiting 220 689 individuals.
Disability grant (16+ years): N$957 million, benefiting 53 381 permanent and 6 124 temporary recipients.
Child disability grant (below 16 years): N$632 million, benefiting 10 708 children.
Conditional basic income grant (CBIG): N$65 million, reaching 32 834 households with an average of 164 170 beneficiaries.
Children’s grant: N$1.6 billion benefiting 217 958 recipients and 331 709 beneficiaries.
Funeral benefit: N$47 million covering 280 194 beneficiaries.
While Humavindu said the ministry “does not have empirical evidence and is unable to comment” on how a UBIG would affect administration costs, it is generally understood that a single, universal grant would eliminate the need for complex means-testing, individual grant applications, and the associated administrative bureaucracy for each separate scheme.
Musutua, a prominent advocate for economic and social justice in Namibia and known for her work with the Basic Income Grant Coalition, has been a vocal critic of the government’s approach. She questions President Netumbo Nandi-Ndaitwah’s administration’s commitment to expanding social safety nets. She argues that while the president promised to increase coverage of welfare grants, as stipulated in the Swapo manifesto, she expressed disappointment with the president’s postponement of a significant old age grant increase.
Musutua further contends that the president’s silence on expanding welfare grants is particularly concerning given Namibia’s high unemployment and precarious status as a world hunger hotspot.
She believes the government is neglecting the immediate needs of struggling Namibians by not prioritising the expansion of welfare grants.
Kavihuha suggests: “We need to transform the Social Security Commission into the social protection commission that deals with all grants properly.”
