Although some gains have been made in fighting income inequality in Namibia, the 11-member Business Rescue Task Force (BRTF) recently stated that a lot of work remains to be done in this regard. This remark came as the task force presented the final report to President Hage Geingob last week, with recommendations and amendments to legislation to save businesses from financial distress.
According to the task force, the growth of previously disadvantaged Namibians is still at a vulnerable and fledging stage.
“The impact of the pandemic has been particularly damaging to this section of the population, and the poverty rate hit an all-time low in 2019 due to recurring drought, falling commodity prices and curtailed government spending. As a result, income inequality continues on an upward trend,” reads the report.
As is the case with many countries in Africa, the BRTF said Namibia’s income inequality is rooted in the economic structure in which a few high-income sectors generate significant wealth, but only for a small number of people.
This thus leaves the vast majority of the workforce trapped in lower-income sectors in which they earn far less.
The force further stressed that inequality has enormous consequences, both morally and economically, and is an issue that needs urgent attention if Namibia is to ensure that no Namibian is left behind.
The country remains one of the most skewed economies in the world in respect of the unequal distribution of wealth. According to the World Bank Wealth Inequality Index, Namibia ranks number two on the top ten list, second to South Africa since 2015 as one of the countries with the highest wealth inequality in the world, with a Gini coefficient of 59.1%.
The Gini coefficient is a statistical measure of inequality that describes how equal or unequal income or wealth is distributed among the population of a country.
Furthermore, the Namibian unemployment rate is expected to be higher than ever due to the fact that several businesses closed and/or retrenched workers, which mostly affected previously disadvantaged Namibians.
“Care is to be taken to ensure inclusive growth by particularly helping SMEs, especially those owned by and employing previously disadvantaged Namibians, to ensure that gains made since independence are not lost. We must continue to address past inequalities to uplift the previously disadvantaged. There is a need to start focusing on how to uplift these businesses as they are faced with difficulties related to access to finance and markets,” the report stated. - email@example.com