 Beata Kabandu produces and sells vetkoek doughnuts to neighbours. One doughnut costs 10 Nambian cents. |
 Joseph Ganeb employs two other people with his brick business. |
 Before BIG initiative a typical house in Otjivero-Omitara was made of iron roofing sheets. |
 Joseph Ganeb’s brick factory also produces for the needs of the village and many people have the possibility to upgrade their dwellings with more solid and airy bricks. |
Anna Berghäll
Translated by Linus Atarah
Namibia’s basic income scheme trial has been successful and attempts are being replicate it nation-wide. Each Namibian aged under 60 would receive an amount corresponding to 10 euros a month.
When the experiment was initiated in 2008 opponents as well as supporters had to deliberate on one issue in particular: what happens when a poor person is given free money once a month? Wouldn’t it go into alcohol and the only beneficiaries being shebeens, i.e., local spirits bar owners?
Two years later the answer is no.
Basic Income Grant (BIG) is 100 Namibian dollars, about 10 euros. In the pilot project’s village it is paid once a month to each person less than 60 years who has been registered as a resident of the village by a certain date. This has prevented large numbers of people from moving to the pilot village, Otjivero-Omitara just because of the free money. People over 60 receive a pension so they are not entitled to BIG money.
We stroll along the “high street” in Omitara village with SASK’s longtime partner Herbert Jauch. A group of children in school uniform shyly stare at us and pass us on their way.
“When we began this project these children would not have walked passed us. They would have stopped us and begged for something to eat” says Jauch.
Begging was also so common among adults that it complicated the social relations. It was difficult to meet neighbours since it was expected that these would only ask for something. When one doesn’t actually have anything what is there to give?
With the coming of BIG, adults can freely visit neighbours, which has positively affected the social atmosphere of the village.
All of the project’s impact cannot even be evaluated yet, but several impacts have already been listed from the half-yearly evaluation reports of BIG.
The most important are: during the first year the number of household living in extreme poverty was reduced from 76 per cent to 37. Children underweight in the area were as high as 42 per cent in November 2007. Half-a-year later, only 17 per cent of children were underweight. Today most parents can pay for their children’s school fees as well as buy school uniform.
A visit to the village’s clinic costs 40 Namibian dollars that is about 40 euro cents. The revenue of the clinic has increased five-fold since the villagers can afford to pay (although payment is not obligatory). The extra money is used to organize, among other things, education on sexual health for teenagers.
Crime in the pilot village which has largely been cattle rustling and poaching, has reduced by half. And because women have an income they no longer have to sell sex.
Namibia ranks high in inequality
It sounds too good to be true. Then what about the sale of alcohol, wonders the cynical journalist?
“Alcoholism is real. It is a problem in Namibia. It is a problem without the pilot scheme, it exists even though we have BIG. Precisely because of it a committee set among the villagers negotiated with owners of the shebeens, and alcohol bars are not opened on the day of BIG payday, on the 15th of every month”, says Jauch.
Large areas of farmland surround Omitara village. As a matter of fact, the whole village was created half accidentally as an abode for agricultural workers and those kicked out from there. The relations with the land owners is fractious because the inhabitants have stolen cattle and firewood.
According to the landowners alcohol-induced problems have increased. But the police are of a different opinion. Not a single shebeen has been started in the village during the trial period, on the contrary one alcohol bar was forced to close down. Some of the landowners also have shebeens which they have not agreed to keep shut during days of the disbursement of BIG money.
Nambia’s basic income trial scheme is unique in the sense that recipients are not under any conditions except to be registered inhabitants of the village. The recipients of BIG money are to understand that it is their right and not any emergency aid. The project wanted to avoid stigmatizing the poor, so if BIG is to be extended nation-wide according to the plans, the money would be paid to the well-to do also.
There are corresponding trials in other parts of the world, for instance Bolsa Familia, “family pocket money” in Brazil. However, that one has a condition: children must attend school and be vaccinated in order for the family to receive support.
According to the latest United Nations’ measurement of human development index published in the autumn, Namibia has the world’s biggest income differentials. For a long time Brazil held the number one position on that dubious issue. Apparently when people hardly have anything, a small amount of money can help them climb out of the worst form of poverty. The overall income available for the use of the community is actually bigger than the combined payment of BIG because the local economy has recovered.
Paying it forward
Joseph’s Ganeb’s brick business provides a good example of the state the local economy. He began manufacturing the bricks already five years ago. Ganeb collects sand from the riverside and buys cement with BIG money. In a day Ganeb moulds 200-350 bricks and sells all for one Namibia dollar per brick. He employs two people, and on temporary basis more than that.
The bricks get utilized in the surrounding farm settlements and even to as far as Windhoek 100 kilometres away, because his bricks are considered to be of good quality. Also people within his village have begun purchasing them according to the level of their rise in income, and dwellings knocked up with rusted iron roofing sheets have been replaced with more comfortable and airy brick houses.
Women have begun producing dresses, doughnuts and bread for sale because neighbours can afford them.
Basic Income Grant (BIG)
The idea for basic income trial scheme came from Namibia’s tax officials, NAMTAX. The tax administration tried to figure out how the tax system could be improved and at the same time reducing inequality. Church organizations, trade unions and non-governmental organizations formed a BIG coalition to give support to the government to realize its idea in the required direction. One of the biggest supporters of BIG, is a long-time SASK partner, LaRRI (Labour Resource and Research Institute).
The goal of BIG coalition is to extend the basic income trial to cover the whole of Namibia. There are only two million people in Namibia so the coalition does not consider the expenses unrealistic.
After the two-year trial period when BIG ends, BIG coalition will pay Omitara’s inhabitants 80 Namibian dollars a month until BIG becomes nation-wide. The goal of the coalition is for it to be realized in two years.
According to supporters of BIG, the project should be funded at the national level in three stages: from income tax, from a gradual increase in value added tax and targeted taxation on different growth sectors such as the mining industry and tourism. The trial has been funded from voluntary payment from supporters of the idea.
