The World Bank projects Namibia’s extreme poverty rate to rise by nearly 2.7 percentage points in 2020, as the
Covid-19 pandemic threatens to widen existing large income gaps and increase the already extremely high inequality.
According to the World Bank, those most affected by Covid-19 are people living in urban areas, people with secondary education, and those employed in construction, manufacturing, private services, trade or transport sectors.

However, in part due to the negative impact of Covid-19 on livelihoods, poverty rates are projected to increase in the
short to medium-term, with the international extreme poverty rate projected to rise to 18.9% in 2022. Typically, female-headed households, the less educated, larger families, children and the elderly, and labourers in subsistence
farming, are particularly prone to poverty.

Furthermore, the bank stated that progress towards reducing inequality has been slow and as a result, Namibia remains one of the most unequal countries in the world with a slow pace of poverty reduction.
The World Bank report noted that a small segment of poor Namibians benefits from employment income, while the majority rely instead on subsistence farming or social grants and other transfers, slowing economic growth.
“The pandemic is set to have an unprecedented impact on Namibia’s economy. With trade largely concentrated to a few
countries and commodities, travel restrictions and lower demand will result in a contraction in exports,” states the bank in an overview of the Namibian economy.

The report added that gross domestic expenditure will also narrow as investment remains muted and the contraction in private consumption, witnessed since the growth slowdown began in 2016, continues.
“Economic lockdown will also impact tourism, retailers, and service sectors, which may result in rising unemployment levels. Taken together, these developments are expected to result in a growth contraction of 4.8% in 2020. The growth outlook is subject to significant uncertainty given the unknown profile of the pandemic and likelihood of further
restrictions in activity,” the report elaborates.

The bank also advised that planned investments in mining could create further impetus in the medium-term but said significant structural and policy reforms will be required for a broader base growth.
Last month, finance minister Iipumbu Shiimi advised that the private sector should come on board to help government
transform the economy through creating more employment, which would in turn reduce the country’s high inequality.
- mndjavera@nepc.com.na