In January 2008, the Basic Income Grant (BIG) pilot project commenced in the Otjivero-Omitara area, about 100 kilometres east of Windhoek. All residents below the age of 60 years receive a Basic Income Grant of N$100 per person per month, without any conditions being attached. The grant is being given to every person registered as living there in July 2007, whatever their social and economic status.
This BIG pilot project is designed and implemented by the Nam- ibian Basic Income Grant Coalition (established in 2004)2 and is the first universal cash-transfer pilot project in the world. The BIG Coalition aims to practically pilot the Namibian Govern- ment's NAMTAX recommendation of a BIG for Namibia. Thus the BIG Coalition regards this project as the first step towards a BIG for all. The BIG Coalition consists of four big umbrella bodies in Namibia, namely, Council of Churches (CCN), the Namibian Union of Namibian Workers (NUNW), the Namibian NGO Forum (NANGOF) and the Namibian Network of AIDS Service Organisa- tions (NANASO). Funds to start the pilot project were raised through voluntary contributions from supporters of the idea from all sections of Namibia's society, and by support from people, churches, organisations and donors in other countries. The BIG pilot project will run for a period of 24 months up to December 2009.
The effects of the BIG pilot project are evaluated on an on-going basis. Four complementary methods were used. First, a baseline survey was conducted in November 2007. Second, panel surveys were conducted in July and November 2008. Third, information was gathered from key informants in the area. Fourth, a series of detailed case studies of individuals living in Otjivero-Omitara was carried out.
This report presents the socio-economic results after the imple- mentation of the BIG for 12 months. The key findings include the following:
€Before the introduction of the BIG, Otjivero-Omitara was characterised by unemployment, hunger and poverty. Most residents had settled there because they had nowhere else to go, their lives were shaped by depriva- tion and they had little hope for the future.
? The introduction of the BIG ignited hope and the com- munity responded by establishing its own 18-member committee to mobilise the community and to advise resi- dents on how to spend the BIG money wisely. This sug- gests that the introduction of a BIG can effectively assist with community mobilisation and empowerment.
? As the BIG was only introduced in one particular loca- tion, there was a significant migration towards Otjivero- Omitara. Impoverished family members moved into Otjivero, attracted by the BIG, even if migrants them- selves did not receive the grant. This points to the need to introduce the BIG as a universal national grant in or- der to avoid migration to particular regions, towns or households.
? The migration to Otjivero-Omitara affected the data ob- tained for this study. Per capita income from the BIG dropped from N$ 89 per month in January 2008 to N$ 67 in November 2008. We thus analysed the impact of the BIG, taking the influence of migration into consideration.
? Since the introduction of the BIG, household poverty has dropped significantly. Using the food poverty line, 76% of residents fell below this line in November 2007. This was reduced to 37% within one year of the BIG. Amongst households that were not affected by in-migration, the rate dropped to 16%. This shows that a national BIG would have a dramatic impact on poverty levels in Nami- bia.
? The introduction of the BIG has led to an increase in economic activity. The rate of those engaged in income- generating activities (above the age of 15) increased from 44% to 55%. Thus the BIG enabled recipients to in- crease their work both for pay, profit or family gain as well as self-employment. The grant enabled recipients to increase their productive income earned, particularly through starting their own small business, including brick-making, baking of bread and dress-making. The BIG contributed to the creation of a local market by in- creasing households' buying power. This finding contra- dicts critics' claims that the BIG would lead to laziness and dependency.
? The BIG resulted in a huge reduction of child malnutri- tion. Using a WHO measurement technique, the data shows that children's weight-for-age has improved signi- ficantly in just six months from 42% of underweight children in November 2007 to 17% in June 2008 and 10% in November 2008.
? HIV positive residents' access to ARVs was hampered by poverty and a lack of transport before the BIG was intro- duced. The BIG enabled them to afford nutritious food and gain access to the medication. This was further en- hanced by government's decision to make ARVs available in Otjivero, freeing residents from the need to travel to Gobabis.
? Before the introduction of the BIG, almost half of the school-going children did not attend school regularly. Pass rates stood at about 40% and drop-out rates were high. Many parents were unable to pay the school fee. After the introduction of the BIG, more than double the number of parents paid school fees (90%) and most of the children now have school uniforms. Non-attendance due to financial reasons dropped by 42% and this rate would have been even higher without the effects of mi- gration towards Otjivero-Omitara. Drop-out rates at the school fell from almost 40% in November 2007 to 5% in June 2008 and further to almost 0% in November 2008.
? The residents have been using the settlement's health clinic much more regularly since the introduction of the BIG. Residents now pay the N$4 payment for each visit and the income of the clinic has increased fivefold from N$ 250 per month to about N$ 1,300.
? The BIG contributed to the reduction of household debt with the average debt falling from N$ 1,215 to N$ 772 between November 2007 and November 2008. Savings increased during that period, which was reflected in the increasing ownership of large livestock, small livestock and poultry.
? The BIG has contributed to a significant reduction of crime. Overall crime rates as reported to the local po- lice station fell by 42% while stock theft fell by 43% and other theft by nearly 20%.
? The introduction of the Basic Income Grant has reduced the dependency of women on men for their survival. The BIG has given women a measure of control over their own sexuality, freeing them to some extent from the pressure to engage in transactional sex.
? The criticism that the BIG is leading to increasing alco- holism is not supported by empirical evidence. The com- munity committee is trying to curb alcoholism and has reached an agreement with local shebeen owners not to sell alcohol on the day of the pay-out of the grants.
? The BIG is a form of social protection, which reduces poverty and supports pro-poor economic growth. As a national policy it would greatly assist Namibia in achiev- ing the Millenium Development Goals to which the coun- try has committed itself.
? The costs of a national BIG in Namibia are substantial. The net costs will be between N$ 1,2 1,6 billion per year, equivalent to 2,2 3% of Namibia's GDP. There are various options to finance such a national grant. A mod- erate adjustment of VAT combined with an increase in income taxes is one option. This would benefit all middle and lower income households in terms of available in- comes. Other financing options include a re-prioritisa- tion of the national budget and the introduction of a spe- cial levy on natural resources.
? An econometric analysis revealed that Namibia's tax ca- pacity exceeds 30% of the national income. The current collection rate is below 25% and thus Namibia's excess capacity to raise tax revenue significantly exceeds the net costs of a Basic Income Grant. This makes the BIG affordable in Namibia.
? A national BIG would have several medium to long-term benefits. Based on the developments in Otjivero-Omit- ara, it is safe to argue that the BIG will reduce poverty and unemployment, increase economic activities and productivity, improve educational outcomes and the health status of most Namibians.
2 The Evangelical Lutheran Church in the Republic of Namibia (ELCRN) with its Desk for Social Development (DfSD) is the legal administrative and fin- ancial home responsible for the implementation of the BIG Pilot Project on behalf of the BIG Coalition.