Towards a common vision: Pulling together or apart? A review of sub-national patterns of multiple deprivation in Namibia

This paper presents a review of deprivation at the sub-national (regional) level in Namibia in the material, employment, health, education, services and housing domains as well as constituency-level multiple deprivation, but aggregated at regional levels. The study provides a strong basis for interrogating the reasons for the existence of the wide inter- and intraregional inequality and inequity with respect to levels of income and access to basic services and identifying priority sectors, at the sub-national level, for public investments. Further, the study provides a useful basis for initiating public policy discourse with regard to resource allocation and, most importantly, ring fencing and targeting those resources to areas or sectors where the particular regions are most deprived and linking development to the exercise of political and other forms of leadership, and accountability for results and impact at the lowest possible level. Another possible contribution of this study could be the need for policy- and decisionmakers in Namibia to consider institutionalising the Namibia Index of Multiple Deprivationweighted Equalization Fund (NIMDEF), whereby regions - and subsequently constituencies - receive and apply development funds and other resources on the basis of the relative weights of their index of multiple deprivation and population sizes. The study is a useful addition to the existing collection of proposals for consideration by policy- and decision-makers to put the country on a new development pathway as it moves towards a green economy

Addressing the Plight of Poor Households by Zero-Rating Value Added Tax on Basic Commodities In Namibia

Difficult economic times began for Namibia in 2008 as real economic growth suddenly dropped to 4.3 per cent from the 5.5 per cent recorded in 2007. There were also wide fluctuations in the general level of prices of goods and services, including food commodities. Cost-of-living inflation rose to a high of 10.4 per cent from a low of 2.3 per cent in 2003 and unemployment rates were high, well in excess of 50 per cent; thus many households faced an increasing cost of living without reliable sources of income. The unfavourable circumstances of these households were exacerbated by inauspicious climatic and soil conditions, which greatly limit the role of subsistence farming as a viable source of livelihood in many parts of the country. In order to mitigate the impact of rising food prices and address food security concerns, the government decided to increase from eight to fourteen the number of basic commodities (foodstuffs and services) that had zero-rated value added tax (VAT) in 2000, as a means of improving access to basic foodstuffs and services needed for daily survival, particularly for the poor. This paper offers an ex-ante analysis of how the zero-of rating VAT on these basic commodities affected the well-being of poor households. We use data from the 1993/94 and 2003/04 National Household Income and Expenditure Survey and a mini survey conducted in 2009 to determine the consumption patterns of these commodities. The VAT burden lifted is determined and disaggregated by income decile. The analysis reveals that, contrary to expectations, rich households are more likely to benefit from VAT zero-rating than poor households. The findings of the study make it plausible to conclude that the zero-rating of VAT on basic commodities in 2000 and 2008 did not adequately target the commodities that the poor consume in large quantities and that they acquire in formal markets; hence the measure is unlikely to bring additional benefits to the poor. The government might have to reconsider the choice of VAT zero-rated commodities and include those that are consumed mostly by the poor and acquired in formal markets, while simultaneously strengthening and expanding other schemes such as social transfers which would benefit the poor disproportionately. (...)Addressing the Plight of Poor Households by Zero-Rating Value Added Tax on Basic Commodities In Namibia

Addressing the Plight of Poor Households by Zero-Rating VAT on Basic Commodities in Namibia

Though it is classified as an upper middle-income country and has an estimated annual gross national income (GNI) per capita of US$4,210, Namibia still faces the twin problems of relatively high levels of poverty and high income inequality. Difficult economic times began in 2008 as real economic growth dropped to 4.3 per cent from a high of 12 per cent in 2004, while cost-of-living inflation rose to a high of 10.4 per cent from a low of 2.3 per cent in 2003. The rate of unemployment (broad definition) grew to 51.2 per cent. Thus many poor households faced a rising cost of living without reliable sources of income. Their already dire situation was exacerbated by inauspicious climatic and soil conditions, which severely limit the role of subsistence farming as a viable source of livelihood in the country. (?)Addressing the Plight of Poor Households by Zero-Rating VAT on Basic Commodities in Namibia

Taxation and Economic Growth in a Resource-Rich Country: The Case of Nigeria

In this chapter, we examine the relationship between taxation and economic growth in a resource rich country, using Nigeria as a case study. We explore the linkages between availability of higher resource revenue and lower taxation effort of other revenue categories and the effects of these on growth. Ordinary least square (OLS) estimation technique is employed in estimating the specified model. Also, descriptive analysis is carried out regarding tax trends and tax efforts in Nigeria to determine the effectiveness of existing tax structures, as well to as examine relevant national and cross-country data. Empirical results reveal that taxation has a significant impact on Real GDP growth rates. However, the proportion of tax contribution to the growth rate falls short of the optimal level in terms of the volume of economic activities and value of total output. Nigeria also lags other African countries with respect to tax effort and as such has a huge untapped potential for enhanced revenue mobilisation. We recommend therefore, that the Government should institute an appropriate tax system with an emphasis on broadening the tax base and in some cases, reviewing upwards the tax rates in order to increase the tax effort as well as ensure optimal contribution of taxation towards economic growth and development

Domestic resources for development financing in Namibia: Constraints and opportunities

To translate Vision 2030 into reality, the government prepares National Development Plans (NDPs), which outline the programmes and projects that the country intends to pursue over successive five-year periods. The current NDP, the fourth in the series, has adopted three over-arching goals: economic growth, employment creation and reducing income inequality. To realise these development objectives, the country needs to enhance the mobilisation of domestic resources. The Government of the Republic of Namibia (GRN) recognises the need for enhanced revenue mobilisation and has stated thus “the imperative to fund critical national priority needs calls on government to strengthen revenue mobilization strategies and increasingly harness measures to improve internal efficiency, reduce waste and realize internal savings as important facets for public finance management in the medium-term” (Ministry of Finance, 2013). This paper analyses past trends in domestic resource mobilisation in Namibia, to identify its pace and its constraints for funding development projects. The main objective of the study is to identify fiscal space which can be used to finance national development in Namibia and to propose policy options for enhancing domestic resource mobilisation

Addressing the plight of poor households by zero-rating value added tax on basic commodities in Namibia

Difficult economic times began for Namibia in 2008 as real economic growth suddenly dropped to 4.3 per cent from the 5.5 per cent recorded in 2007. There were also wide fluctuations in the general level of prices of goods and services, including food commodities. Cost-of-living inflation rose to a high of 10.4 per cent from a low of 2.3 per cent in 2003 and unemployment rates were high, well in excess of 50 per cent; thus many households faced an increasing cost of living without reliable sources of income. The unfavourable circumstances of these households were exacerbated by inauspicious climatic and soil conditions, which greatly limit the role of subsistence farming as a viable source of livelihood in many parts of the country. In order to mitigate the impact of rising food prices and address food security concerns, the government decided to increase from eight to fourteen the number of basic commodities (foodstuffs and services) that had zero-rated value added tax (VAT) in 2000, as a means of improving access to basic foodstuffs and services needed for daily survival, particularly for the poor. This paper offers an ex-ante analysis of how the zero-of rating VAT on these basic commodities affected the well-being of poor households. We use data from the 1993/94 and 2003/04 National Household Income and Expenditure Survey and a mini survey conducted in 2009 to determine the consumption patterns of these commodities. The VAT burden lifted is determined and disaggregated by income decile. The analysis reveals that, contrary to expectations, rich households are more likely to benefit from VAT zero-rating than poor households. The findings of the study make it plausible to conclude that the zero-rating of VAT on basic commodities in 2000 and 2008 did not adequately target the commodities that the poor consume in large quantities and that they acquire in formal markets; hence the measure is unlikely to bring additional benefits to the poor. The government might have to reconsider the choice of VAT zero-rated commodities and include those that are consumed mostly by the poor and acquired in formal markets, while simultaneously strengthening and expanding other schemes such as social transfers which would benefit the poor disproportionately

October, 2010 Working Paper number 72 Ojijo Odhiambo United Nations Development Programme, Namibia John E. Odada Department of Economics, University of Namibia. Addressing the plight of poor households by zero-rating value added tax on basic commodities in Namibia

Difficult economic times began for Namibia in 2008 as real economic growth suddenly dropped to 4.3 per cent from the 5.5 per cent recorded in 2007. There were also wide fluctuations in the general level of prices of goods and services, including food commodities. Cost-of-living inflation rose to a high of 10.4 per cent from a low of 2.3 per cent in 2003 and unemployment rates were high, well in excess of 50 per cent; thus many households faced an increasing cost of living without reliable sources of income. The unfavourable circumstances of these households were exacerbated by inauspicious climatic and soil conditions, which greatly limit the role of subsistence farming as a viable so urce of livelihood in many parts of the country. In order to mitigate the impact of rising food prices and address food security concerns, the government decided to increase from eight to fourteen the number of basic commodities (foodstuffs and services) that had zero-rated value added tax (VAT) in 2000, as a means of improving access to basic foodstuffs and servicesneeded for daily survival, particularly for the poor. This paper offers an ex-ante analysis of how the zero-of rating VAT on these basic commodities affected the well-being of poor households. We use data from the 1993/94 and 2003/04 National Household Income and Expenditure Survey and a mini survey conducted in 2009 to determine the consumption patterns of these commodities. The VAT burden lifted is determined and disaggregated by income decile. The analysis reveals that, contrary to expectations, rich households are more likely to benefit from VAT zero-rating than poor households. The findings of the study make it plausible to conclude that the zero-rating of VAT on basic commodities in 2000 and 2008 did not adequately target the commodities that the poor consume in large quantities and that they acquire in formal markets; hence the measure is unlikely to bring additional benefits to the poor. The government might have to reconsider the choice of VAT zero-rated commodities and include those that are consumed mostly by the poor and acquired in formal markets, while simultaneously strengthening and expanding other schemes such as social transfers which would benefit the poor disproportionately

Effects of zero rating value added tax on government revenue in Namibia A partial equilibrium analysis

Purpose – The Government of Namibia has traditionally used fiscal (especially tax) policy as an instrument for annual budget formulation. Marginal tax rates for profits and various income brackets have been changed back and forth in response to changes in economic conditions. However, to date, no attempt has been made to evaluate the effectiveness of these reforms in achieving the broad national economic goals, in general, and the potential effects on government revenue in the short, medium and long-run periods, in particular. The purpose of this paper is to fill this information gap by analysing the implicationof the 2008 zero-rating of value added tax (VAT) on basic commodities for aggregate demand and government revenue. Design/methodology/approach – The study uses an analytical framework based on economic theory which posits that in an open economy, which trades with the rest of the world, aggregate demand for goods and services is made up of consumption demand, investment demand, government demand and net exports and that real sector equilibrium is attained when aggregate supply of goods and services is equal to aggregate demand for goods and services. Findings – Using the Namibia Household Income and Expenditure Survey results, the annual loss in government revenue attributable to this policy is,ceteris paribus, estimated to be N$310.4 million. With a marginal propensity to consume out of disposable income of 0.89, total expenditure by households on goods and services is likely to increase by N$276.3 million per annum. In the medium-to-long-run, national income will have increased by N$303.9 million per annum. Taxes which are responsive to changes in the level of national income will have increased by N$85.7 million, compensating for just over one quarter of the estimated loss in government revenue of N$310.4 million. Research limitations/implications – The study has used a partial equilibrium model as opposed to computable general equilibrium model, which provides a consistent framework that meets most of the sectoral and institutional data requirements for the simple reason that a social accounting matrix which can be used readily to connect data from different sources, such as national accounts and household surveys and would thus have been ideal model for analysing the impacts of the VAT tax reform has not been developed for Namibia. Practical implications – The paper provides a number of practical policy options available for government including, but not limited to, increasing direct taxes, VAT rate on specific (luxury) goods and services and statutory VAT rate on all other commodities not zero-rated, other taxes such as taxes; and borrowing from external sources. Social implications – It is established that zero-rating VAT on all the basic commodities in 2008 reduces the VAT paid by all Namibian households by N$310.4 million per year, which represents the annual increase in the disposable income of all households. And with a marginal propensity to consume out of disposable income of 0.89, total expenditure by households on goods and services will increase by N$276.3 million per year

Are public works programmes effective in reinforcing social protection systems? Evidence from Northern Namibia

This paper analyses the effectiveness of public works programmes (PWPs) in creating employment, reducing poverty and reinforcing the existing social protection system in Namibia. Using data and information from a survey conducted in northern Namibia, it is established that while public works programmes have no significant effect on the employment status of participants beyond the programme lifespan, they nonetheless have a significant positive effect on their socio-economic well-being. PWP wages, which are significantly lower than those prevailing in the market for unskilled labour, are comparable to most of the existing social cash transfers and have a positive impact on poverty reduction. It is established that PWP wages are used by individuals and households to invest in economic assets as well as in improving access to basic social services - education and health - all of which serve to reinforce the well-developed social protection system. There is, however, a need to constantly review the wage level to be as near the prevailing market rates as possible; to ensure that the PWPs have an inbuilt mechanism for the transfer of the necessary skills; and to design complementary policies and programmes that promote long-term investments in rural areas so that PWPs can be more effective in reinforcing the existing social protection system

Capital Markets, Economic Growth and Sustainable Development Financing: A Case Study of Nigeria

Unlike the Millennium Development Goals (MDGs) which were largely premised on the availability of external financing, in the form of Official Development Assistance (ODA), the Sustainable Development Goals (SDGs) are premised on a multiplicity of financing sources, with domestic resource mobilization (DRM), including through the capital markets, envisaged to play an increasingly important role. This study seeks to establish the impact of the capital market on the performance of the Nigerian economy and propose ways of enhancing its role in domestic resource mobilization for investments in SDG-related activities.  The study employs an enhanced version of the Neoclassical growth model, also known as Growth Accounting Framework, to incorporate other economic and financial variables such as capital market development indices, as well as some indices for the measurement of macroeconomic volatility. The study has established that, although the stock market development indices captured in the model, do not individually exert any significant effect on growth, jointly, they do have a significant impact on growth. Specifically, it is established that an estimated 61% of the changes in Real Gross Domestic Product (RGDP) is explained by all the variables explicitly captured in the model, and that all the explanatory variables are jointly statistically significant at 5% level of significance. The study makes a number of plausible policy options including the need to put in place the requisite policy measures and regulatory frameworks to ensure continuous development of the Nigerian capital market; the creation of an enabling environment to facilitate increased investments in the capital market; the need to enhance investor confidence by ensuring efficiency in the operations of the stock market; and the need to increase the diversity and complexity of investment instruments in tandem with developments in other stock markets and growing demands and expectations of investors and investment needs of the country. Keywords: Nigeria, capital market development, economic growth, sustainable development goals Article classification – Research paper