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Namibia's Social Safety Net: Issues and Options for Reform

This report describes Namibia's social safety net and issues and options for reform. In Namibia, the extended family is a big shock absorber: informal sharing arrangements between and within households are Namibia's unique sources of strength. Grandparents contribute enormously to the continuation of this safety net by letting the entire family share their social pension in times of need, and by looking after their grandchildren while parents are away or are AIDS-infected. Yet, these informal safety nets are not robust during periods of drought, and are strained in normal times due to the high levels of unemployment and the growing burden of children of AIDS-infected parents. Of all the formal safety net programs, the social pension program and the disability grant touch the lives of the poor more than other programs. Namibia is one of the few countries in Africa to administer a social pension program for every individual after attaining the age of 60. The three main grants for needy children also suffer from regional asymmetry and are heavily urban-biased. The pro-urban and middle class bias appear highest for in-kind programs, viz., school feeding programs and shelter/housing programs. Up gradation of squatter settlements and single-room apartments, and provision water and sanitation facilities are a priority; public resources need to be reallocated to those programs of direct relevance to the rural poor. The country has many other transfer programs including subsidization of welfare homes and remission of rent for apartments with overdue rents. The impact of these programs on poverty appears at best dubious. Elimination of these programs will release the administrative resources needed to implement social pensions and disability grants more effectively. The resource savings may contribute to overall fiscal sustainability of programs. The principal conclusion of this study is while the informal safety net is unable to cope with the increasing demands, the formal programs are too many and poorly administer.