Report No. 9510-NAM Namibia Poverty Alleviation with Sustainable Growth October 29, 1991 Industry and Energy Operations Division Southern Africa Department FOR OFFICIAL USE ONLY Document of the World Dank This Ui ,9ment ha's a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization. CURRENCY EQUIVALENTS 1990: 1 Rand = 0.39 US$ I US$ = 2.57 Rands GLOSSARY OF ABBREVIATIONS CCN Council of Churches in Namibia CDM Consolidated Diamond Mines CHW Community Health Worker CMA Common Monetary Area DEA Department of Economic Affairs DFI Development Finance Institution DNE Department of National Education FNDC First National Development Corporation GFI Government Finance Institution HIV Human Immunodeficiency Virus ICSEAF International Commission for Southeast Atlantic Fisheries MLGH Ministry of Local Government and Housing MME Ministry of Mines and Energy MOHSS Ministry of Health and Social Services NBC Namibia Broadcasting Co. NBIC National Building Investment Corporation NGO Non-government Organization NIED National Institute for Education Development NISER Namibia Institute for Social and Economic Research PHC Primary Health Care PLAN People's Liberation Army of Namibia RBSA Reserve Bank of South Africa RIDP Southern African Regional Ir lustrial Development Program RSA Republic of South Africa SACU Southern Africa Customs Union SWABOU Southwest Africa Building SWAPO Southwest Africa People's Organization SWATF Southwest Africa Territorial Forces SWAWEK South West Africa Water and Electricity Corp. UNDP United Nations Development Program UNTAG United Nations Transition Assistance Group WFP World 1Yood Program FOR OFFICIAL USE ONLY PREFACE This report is based on LJNDP-financed economic missions that visited Namibia between September and November 1990. Mission members included Pedro Belli (mission chief and principal author), Maria Teresa Benito (economist), Joy de Beyer (health economist), Hjordis Bierman (fiscal economist), Francis Christy (fisheries economist), Alan Dock (education expert), Edward Echeverria (housing expert), Nancy Gillespie (economist), Jeffrey Gimbel (public health specialist), Roger Hay (agricultural expert), Melanie Johnson (financial expert), Armando Lago (transport economist), Arturo Meyer (macroeconomist), Peter van der Veen (mining engineer), Shujie Yao (agricultural economist), and Brigida Tuason (research assistant). Word Processing of the report was done by Ms. Nuria Plaza. Secretarial support and additional word processing assistance was provided by Ms. Noemi Dacanay and the support staff of AF6IE. Messrs. David Cook (AF6IE) and Stephen Denning (AF6DR) are the managing Division Chief and Department Director. The mission also benefitted from valuable information provided by the UNDP resident mission in Namibia, ILO, UNICEF, and Prof. Chris Tapscott. As indicated in UNDP Project Document (NAM/90/002) dated March 2, 1990, the major objectives of the report are to examine the structure and evolution of the economy, and several key sectors, and recommend an economic development or rehabilitation strategy for thz- country, including investment priorities and she main economic policy reforms needed to implement this strategy. NAMIBIA POVERTY ALLEVIATION WITH SUSTAINABLE GROWIH Table of Contents Page No. Country Data Executive Summaary ................................................... ijxxii I. THE ECONOMY AND THE PEOPLE ............................... 1-17 Overview . .................................................... 1 Population ............... ............................... 1 Links with South Africa .................................... 1 Transport Infrastructure .................................... 2 GDP and PerCapita GDP .......... .............................. 2 Sectoral Contrbuonsto GDP .................................... 3 Mining ................................................. 3 Agriculture .............................................. S Fisheries ................................................ 6 Industry. ................................................ 6 The People: Poverty Profile ..........., 7 Population Overview ......... ............................. 7 How Serious is the Poverty Problem? .......................... 8 Who are the Poor? ....................................... 8 Sources of Income and Income Distribution ..... ................ 9 Social Indicators ........... ............................... 11 Health . ................................................. 12 Education ............................................... 12 Water and Sanitation ......... ............................. 13 Housing ................................................ 14 Vulnerable GrOups .............. ............................... 15 I. RECENT ECONOMIC DEVELOPMENTS ........................... 1&-35 Macroeconomc and SectoralTrends .8............................... i Overall Economic Growth .................................. 18 Mining ................................................. 18 Agriculture .............................................. 21 -2 Expenditures un GDP ............ ............................... 23 Consumption ............. ............................... 23 Investment .................................. ........... 23 Balance of Payments ...................................... 24 Employment . ................................................. 26 Labor Force .............. ............................... 26 Characteristics of the Unemployed ............................ 26 Recent Employment Trends and Prospects ..... ...... .......... 27 Wage and Salary Structure .................. I I ........I..... 27 Unskilled Wage Trends ............... 28 Economic Segmentation .................................... 28 Labor Market Segmentation ................................. 28 Winners and Losers During the 1980s ............................... 32 The Government's Economic Challenges ............................. 32 Reactivating Growth .... ................................. 33 Restraining and Redirecting Public Expenditures . ............... 34 Reducing Poverty .34 Creating Employment .35 III. FISCAL POLICIES .3648 Introduction .36 Structure of the Non-Financial Public Sector .36 Recent Fiscal Performance: A Summary . ............................. 38 Central Government .......... ............................. 38 Revenues ............................................... 38 Expenditures . ........... ............................... 39 Financing the De&cit ...................................... 39 Central Government Performance for 1990/91 and Budget for 1991/92 ...... 40 The Dual Challenge of Improving Equity and EfMiciency ..... ............ 42 Prospects for Own Revenues ...................................... 42 Donor Funding: Rand and Non-Rand Borrowing Policies ..... ........... 45 Expenditures . ................................................. 45 Fiscal Policy Recemmendations .................................... 47 Iv. MINING ....................................., 49.55 Structure and Composition of the Sector ........... .............. ... 49 Large Scale Operations .................................... 49 Medium and Small-Scale Operations .......................... 50 Recent Performance .............. ............................... 50 Growth Potential ................................................ 51 Suggestions for Strengthening the Business Environment ..... ........... 52 Mining Legislation .......... .............................. 53 Mining Taxation .......... 53 Government Services ........... ........................... 53 -3- V. AGRICULTURE ............................................... 56-75 Intrduction 56 Resource Base ...................................... 58 Water . .58 Land. 60 Recent Performance ..... ....... ................................ 60 The Policy Environment for Commercial Farmers .. 62 Pricing Policies ..62 Credit. 64 Institutional Support and Policy Environment for Communal Area Farmers . 65 Food Security ............ 66 Land Reform ................................................. 67 Recommendations ....................................... ...... 69 Marketing Channels ..69 Transport Infrastructure. 69 Small-holder Credit ..69 Research and Extension ..70 Water Development ..71 User Fees for Land and Water ..72 Institutional Reforms ..74 VI. FISHERIES ................................................... 76-84 Introduction .................................................. 76 Resource Base .....................................6............ 7 Biological Limits for the Short- to Medium-Tern .................. 77 Conceptual Framework .....................7........ 78 Policy Options for Inshore Fisheries ............... ................. 80 Management Measures ..80 The Allocation of Rights ..81 Extraction of Economic Rents ..81 Policy Options for Offshore Fisheries ........... . ........ 82 Maximizing Economic Revenues ..82 Access Arrangements ..83 Duration of Agreements ..83 Conclusions.. 84 VII. MANUFACTURING INDUSTRY. 8590 Introduction .85 The Institutional Setup in the RSA .86 SACU .86 The Regional Industrial Development Program .86 The General Export Incentive Scheme .89 Interim Policy Recommendations .89 -4 - VII. FINANCIAL SECTOR ............................ ... .. ..... . 91-101 The Financial System ....1.......... .. - 9 Financdal Sector Developments ...................... . 92 Equity Issues........ 95 Efficiency Issues . . .96 Interest Rate Structure . . .96 Costs of Intermediation . . .97 Capital Adequacy ................................... 98 TrnansitionIssues ....... 98 A Strategy for Financial Sector Development. . 99 Objectives for Financial Sector Development . . .99 Improving Equity and Expanding the System . . .100 1-nproving Efficiency . . .101 IX. HEALTH ............. ....................................... 102-112 Deterninants of Health. 102 The Health Care System ..103 Government Health Services ..103 The Private Sector ..104 System Effectiveness.. 104 System Efficiency ..105 System Extensiveness. 105 System Equity ..106 Primary Health Care Policy and Cost Implications . .107 PossibleSavings ..107 Recommendations .. ................. 108 Expansion of Resource Base ..108 Priority Areas that are Reiatively Neglected . .110 Nutrition ..110 Environmental Health--Water and Sanitation . .111 Family Planning ..111 Information Systems ...... .. .... .... 112 X. EDUCATION .. ....... 113-124 Introduction... 113 Curmnt Administrative System. . . 113 Schools and School Population . . .114 Relevance of Curriculum... 116 Examination Requirements . . .116 Quality of Delivery ............. . 118 Teachers . . .118 Teacher Education . . .120 Technical Education .................................................... 120 Non-formal Education and Distance Education ..... ... ............... 121 The Cost of Education ......... 4 .... ...... e. .... a 121 Priorities for Future Develorment ..... ....... ..................... 122 XI. URBAN HOUSING ..........125.135 Introduction .....125 Housing Stock und Conditions ..................... , ......... 125 Housing Needs ........ . . . ...... 126 Cost of Meeting Housing Needs .....126 Housing Affordability .....127 Government's Housing Strategy..... 128 Redirection of Public Funds .................... 129 Private Sector Involvement ........... ..... . 129 Making Low Cost Housing More Affordable ..... ... ................. 129 Lowering Building Costs ..... 129 The Need for New Financial Instruments .......... ................. 130 Subsidy Implications of a Level Payment .................. ..... 131 An Alternative Solution ........................... . ..... 132 NBIC ......................................... . .... . 133 Suggested Housing Strategy for 1991-96 ............ . W13 Rehabilitation and Squatter Upgrading .................... ..... 134 Water Conservation ............................................. 135 Technical Assistance ............................................ L35 XI]. TRANSPORTATION ........... ................................. 136-146 Transport Infrastructure .......................... 136 Walvis Bay .................................................... 136 Transport Regulatory Environment and Competition ..... .............. 137 Road Transport Regulations ................................. 137 Reserved Commodity Cargo Preference ........................ 138 Effect on the Supply of Transportation Services ..... ............. 138 Effect on Prices and Tariffs ................................. 138 Deregulation Strategy ...................... ..................... 139 User Taxes and Infrastructure Costs .................. .............. 140 Transportationt Infrastructure Costs and User Revenues .... ........ 140 Impact of De-regulation and Changes in Road User Charges ....... ...... 141 Road Building Issues ........ ........ 141 Regional Disparities and Efficiency ................................. 142 Need to Redirect Budget to the Northern Districts ..... ........... 143 Road Development Budget Priorities .............. .. ................ 144 Maintenance Policy .......... ............................... 144 Environmental Considerations ..................................... 145 6 - Labor-Intensive Construction Opportunities .......................... 145 Civil Aviation Issues ..............,.,.,.,............. 146 Urban Transportation Issues .................. .....,.. 146 XIII. ECONOMIC GROWTPH PROSPECTS .147-154 Mining .148 Diamonds .148 Uranium .148 Gold .148 Fisheries ..... 149 Agriculture. S0 Manufacturing .152 Employment Implications .152 The Need for Government Interventions .152 Direct Employment Generation Programs .152 Transfer Assistance .153 TABLES Table 1.1 Incomes of Major Segments of the Economy, 1988. 3 1.2 Sectoral Contribution to GDP at Factor Cost, 1980-89 ..5 1.3 Enterprises and Employment in Manufacturing by Subsector 7 1.4 Percent of Households Receiving Income from Selected Sources, 1990. 9 1.5 Household Cash Incomes by Area .10 1.6 Income Distribution Shares .11 1.7 Selected Health Indicators, Namibia and Other SSA Countries 12 Table 2.1 Uranium and Diamond Production, 1980-89 .20 2.2 Fixed Investment, 1980-89 .24 2.3 Gross Domestic Product and Expenditure at Current Prices, 1980-89 .25 2.4 Average Earnings per Month by Occupational Category, 1990 27 2.5 Per Capita GDP By Sector .33 Table 3.1 Summary Financial Operations of the Central Authority, Fiscal Years, 1981/82-1989/90 .40 3.2 Medium-Term Firam.cial Projections .44 3.3 Central Govemment Financial Projections, Alternitive Scenario .48 -7 - Table 5.1 Composition of Agricultural Production, 1987 ..... ............... 56 5.2 Population and Agricultural Activities in Communal Areas, 1989 57 5.3 Recent Trends in Agriculture ........ ........................ 61 5.4 Import and Export Parity for Maize, 1985-90 .................... 64 Table 6.1 Recommended Short-term Limits on Fish Catch and Estimated Long-term Sustainable Yields .77 Table 7.1 Subsidies under the RIDP Program .87 7.2 Regional and Total Manufacturing Employment in the RSA .88 Table 8.1 Commercial Bank Sources and Uscs of Funds .94 8.2 Commercial Bank Flow of Funds . ............................ 95 Table 9.1 Percentage Distribution of Expenditures on Health, 1991-93 109 Table 10.1 Number of Schools Offering Each Level in Full .114 10.2 Comparison of Student Ages by Grade. 117 10.3 Enrollment and Teachers by Ethnic Group, 1989 .119 Table 11.1 Estimates of Housing Needs, 1990-95 .126 11.2 Estimates of Cost of Meeting Housing Needs, 1990-95 .127 11.3 Estimates of Rent/Mortgage Paying Capacity .131 11.4 Housing Subsidy Estimates .131 11.5 Suggested Five-Year Low-Cost Housing Program 1990-95 .134 Table 12.1 Incremental Rate of Return on Net Assets of TransNamib Carriers 1989-90 .139 12.2 Summary of User Revenues and Expenditures by Transportation Subsector .140 12.3 Estimated Impact of User Tax Policies and Deregulation/ Free Entry on Trucking Tariffs .142 12.4 Heavily Used Unpaved Access Roads in Northern Districts .143 Table 13.1 Projected Rates of Growth of GDP .151 13.2 Projected Rates of Employment Creation, 1991-96 .153 ANNEXES Annex I Methodology for Poverty Measurements ....... ................. 157-1I59 II Mining and Investment Code ............ .................... 160-161 III South Africa's Regional Investment Development Program .... ..... 162-163 IV Major Health Problems . .................................... 164-167 V Transport Sector Memnorandum .. . 168-178 -8 - Annex Tablc3 Table AI Wiuidhoek Poverty Lines, September, 1989 ..... ................. 157 A.2 Estimates of the Food Insecure in Rural Communal Areas .... ...... 158 A5.1 Estimates of Vehicic Operating Costs in Namibia - Mid-1990 . I ..... 169 A5.2 Analysis of Road Investment Priorities ......................... 170 A5.3 Allocation of F.el Levies - Financial Year Ending 31 March 1991 ... ................................ 173 A5.4 Estimation of Transportation Expenditurcs - Financial Ycar Ending 31 March 1991 ...... ................... 174 A5.5 Estimate of Equivalent Single Axle 18,000 lb. Load Rates (ESAL) .175 A5.6 Road Expcnditurc Allocation Summary - Financial Year Ending 31 March 1991 .176 A5.7 Allocation of Revenues from Vehicle License Fees - Financial Year Ending 3l March 1991 ....... .................. 177 A5.8 Road Transport Revenues Allocation Summary - Financial Year Ending 31 March 1991 .178 STATISTICAL APPENI)IX .179-267 MAP - IBRD No. 22898 COUNTRY D&TU-NAMMIA Total: 824,000 km2 1.7 million (nmd-1988) 2.06 per km2 Rawt of Orowth: 2.8%-3.2X MOPULATION CmgXACTURISCS (1990) II Crudo BIrth Rato (par 1,000) 37.0 Popultion per phyuiecan (1989) 5008 Crude Death Rate (per 1,000) 9.0 Population per heoital bed (1989) 5.6 Infant Mortlity (per 1,000 live bifths) 60.00 MICO_4.1)ISTRIBU 988I DIfTl MQN OIF D OWNERSHIP tl989) % of national income, higihest 5% 71 % of fainn: below 5he.: 80 lowest 55% 3 above 50ha.: 19 ACCBSS TO PIPED WATER AccS TO ELE CT Y % population - urban n.e. % of popultion n.a. - rural nli. NUTRITION EDUCATION Calorie intake as % of requirement n.a. Adult literacy mate (!98) 60% Per capita protein intake n.a. Prikary school enrollmm % (1988) 79 GNP PER CAPITA IN 1989: UV 1.1fl GROSS DOMESTIC PRODUCT IN 1989 ANNUAL RAT OP (ROWrH %. 1980 onces) US$ Min. £ 19AI8985 i8-1989 GDPatMarketPrices 1,903.8 100.0 -1.43 3.7 Gross Domeatic Investment 305.8 16.1 -44.7 4.7 Gross National Savirgj 354.0 18.6 -5.6 4.4 Current Account Bna,. " 37.7 2.0 .. -26.9 Exports of Goods, NFS 1,0443.9 54.8 -3.4 -1.5 InportsofGoods, NFS 1,067.1 56.1 4.5 -0.1 OUTPUT. LABOR FORCE AND PRODUCTIVI l I41988 Value Aded LabrPc V,A. er mkct USS min % Tb. % USS Agriculture 207.7 12.5 36.1 19.5 5,753 Indusrry 622.0 37.3 33.4 18.1 18,623 Services 836.6 50.2 115.3 62.4 7,256 TotallAverage 1666.3 100.0 184.8 100.0 9,017 GOVERNMENT FINANCE Central Govrnmeont Pabic Sectot (R Bin) X of GDP llu. X 1990191 Cuffent Revenues 1.7 29.3 n.e. n.a. Curtent Expendiures 1.8 30.1 n.e. na. Current Surplus -0.1 -0.8 n.. n.. CapiWtl xpenditures 0.3 4.4 n.e. n.S. COUNTRY DATA - NAMIBIA MoMe. Credit and Prices 1985 1986 1987 1988 1989 (Banking System) (Million Randa Outatanding End of Period) Total Bank deposits 831.0 864.5 1,014.8 1,1h666 1.658.8 Bank Credit to Public Sector 1.0 30.8 49.8 79,3 62.2 Bank Credit to Private Sector 351.9 407.6 526.1 826.9 1,217.5 (Percentages o.r Index Numbers) Deposits as % of GDP 32.7 29.5 32.6 31,0 38.3 Gencral Price Index (1980- 100) 181.4 205.7 231.6 261.4 300.9 Annual percentage changes in: General Price Index 12.0 13.4 12.6 12.9 15.1 Bank Credit to Public Sector 11.0 2,980.0 61.7 59.2 -21.7 BankCredittoPrivateSector -13.3 15.8 29.0 57.0 47.2 Balance of Payments Merchandise Exgorts (Averagesl USS M USMin 1980 1988 1989 1984-1989 9 Export of Goods 1,458.9 946.9 1,021.3 Diamonds 238.5 28.7 Imports of Goods 1,156.2 918.4 894.3 Minerals 429.4 48.0 NFS (net) -214.6 -161.3 -150.0 Karakul Pelts 11.7 1.3 Resource Gap (deficit = -) 88.1 132.9 -23.1 Cattle 49.2 5.7 Other Agricultural 28.9 3.3 NetTransfers 91.3 241.8 203.1 Fish 25.4 2.9 Balance on Current Account -16.5 -67.8 37.7 Manufactures 44.8 5.1 Other 42.5 4.9 EXCHANGE RATE.1989 AVERAGE EXTERNAL DEBT, DECEMBER 31. 1989 USS Mi USS 1.00 Rand 2.62 $340.26 Rand 1.00 * USS 0.38 EXECUTIVE SUMMARY Introduction i. The "red line" is a fence that extends across Namibia from east to west about one-quarter of the way south of the border with Angola. The fence has only two openings. It was erected to keep diseased game and cattle in the north from contaminating healthy game and cattle in the south. The fence also divides communal from commercial agriculture and is a symbol of the rift between two Namibias at opposite ends of the economic spectrum. ii. A visitor from Europe transported to the capital, Windhoek, south of the "red line" would probably think he is in some small town in the Netherlands, or Germany, save for the racial composition of the population. Stores and modern supermarkets are well stocked with reasonably priced goods, with the exception of expensive electronic goods. This initial impression would be further reinforced by the city's neat appearance, the quality of the buildings, the excellence of the roads, and the reliability of the telephone system. Urban Namibia is rich and Wuropean in many respects. The same visitor to rural Namibia, north of the red line, would find poor farmers--most likely illiterate--eking out a living by raising cattle and growing millet with primitive technology in a not very fertile land. Farm children would look malnourished and tired frnm walking long distances to fetch drinking water for the famnily. The visitor would know immediately that this is Africa. iii. There are indeed at least two Namibias. The white population, which is no more than five percent of the total, is mostly urban and enjoys the incomes and amenities of a modern Western European couatry. The black population, mostly rural, lives in abject poverty. What the white population earns in a day of work, the urban black population earns in two weeks and the rural black population in one year. While the white population has access to excellent heal6ii care, the black population does not. One out of twenty black children born today will be dead by his/her first birthday, and one out of ten will be dead before the age of five. V.hile virtually every white Namibian has access to a fine education, only very few blaeks have. Before independence in 1990, a white Namibian's chances of being taught by a "qualified" teacher were seven out of 10; a black Namibian's chances would have ranged from one in four, for a Tswana, to one in 50, for a Caprivian or a Herero. iv. Black Namibians are not only in poorer health and less educated than white Namibians--hence likely to be less productive--they also own far fewer assets and have been denied access to highly productive employment. In 1964 The Commission of Enquiry into South-West Afican Affairs (the "Odendaal Commission") assigned some 33.3 million hectares to 10 black homelands and 34.9 million hectares to white commercial farmers. Many white-owned farms are so large (7,000 hectares, on average) that their boundaries are visible on a medium-sized Namibian i.ap. v. The dualism that characterizes social conditions is evident in the productive sactors as well. Namibari mining--the country's main source of income and wealth--is world class in practically every respect: management, productivity, marketing skills, technological know-how. Commercial agriculture-the country's second most important productive sector-is also very efficient. Communal agriculture, in contrast, is subsistence agriculture. - ii - vi, llTis extreme inequality in income and access to public services is what the first administration of independent Namibia has inherited. Its main task will be to dismantle an economic and social system built on apartheid. Redirecting public expenditure to meet the health and educational needs of the majority of the population will be a necessary first step, but it will not be enough. The authorities will also have to tear down many symbolic 'red lines' that historically prevented the black population from baving equal access to the country's productive assets, services, and markets. The authorities' job will be easier in the context of a growing rather than a stagnating economy. The tradeoff is not between equity and growth, but between immediate redistribution of assets and income vs. long-term sustainable growth. vii. This report offers suggestions for dealing with Namibia's daunting problems and is divided into three parts. The executive summary, which targets policymakers as its audience, concentrates mainly on suggestions for addressing the equity problems. The main report reviews the country's recent economic performance and employment trends, analyzes the salient development problems of Namibia- which have to do with policies for improving the living conditions of 90 percent of the population-and discusses measures to stimulate growth. The Namibian authorities inherited a policy framework with few price distortions that is largely conducive to growth. This policy framework does not require major modifications. The report, therefore, focuses on the sectoral policies needed to spur labor-intensive growth and on a re-direction of fiscal expenditures to improve the welfare of the poor and raise their productivity. Tle third part of the report contains a statistical appendix and various technical annexes. The Government's Economic and Social Challenges viii. The Namibian economy expanded at 9 percent per year during the 1960s, but since then its performance has been laclduster. Growth was nil during the 1970s and low and erratic during the 1980s. In 1982-84 the economy fell into a recession that brought Gross Domestic Product (GDP) down by 10 percent. After recovering the lost ground in 1985 and 1986, GDP fell again in 1987, recovered in 1988, and fell again in 1989, closing the decade only 4.7 percent higher than at the beginning. Because of continuous population growth, per capita GDP fell some 21 percent during the decade. ix. The economy's poor performance was not the result of erroneous policies, but rather of exogenous events over which the authorities had no control. Growth fell at the beginning of the decade because of sanctions against the Republic of South Africa (RSA), depletion of high-grade diamond deposits, and a devastating drought from 1982 to 1984 that brought agricultural output down by 43 percent. Sanctions and uncertainty about the country's political future resulted in low investment levels, which, iner alia, led to the depletion of high-grade diamond deposits, which in turn, led to a 27 percent decline in output from the mining sector. The drought brought agricultural output down by 43 percent. One of the Gowrnment's main tasks will be to reactivate the economy by stimulatingprivate investment, increasing public inewment, and maiainng an enabling environment for prvate sector activity (see XV). X. Despite its poor performance during the past two decades, Namibia is still one of the richest countries in Sub-Saharan Africa. Its per capita income of nearly US$1,200 places it firmly among - iii - middle-income countries, although this figure tells only part of the story. The wealthiest five percent of Namibians receive more than 70 percent of the country's GDP, while the poorest 55 percent receive only 3 percent. As a result, a tiny minority in the modem urban sector enjoys incomes and public services at levels comparable to those of Western European countries, while more than two-thirds have a standard of living so low that they live in "absolute" poverty. The previously disenfranchised and neglected majority rightfully expects to partake in greater measure of the independent country's income and wealth. Addressing the country's equity problem at an acceptable pace without jeopardizing growth will be a second major challenge. xi. Reliable estimates of unemployment prior to independence are unavailable, but current estimates range between 30 and 40 percent. The ILO also estimates that between 25 to 30 percent of the labor force in the formal sector is unemployed, while two-thirds of those in the subsistence sector are underemployed. Creating enough employment opportunities to absorb the currently unemployed and new entrants into the labor force wll be the Government's most difficult challenge, one that is intimately related to poverty alleviation. xii. The Government also has a fiscal problem. Prior to independence, Namibia's public administration consisted of the Central Authority, 11 ethnically-based Second Tier Authorities, an equal number of municipalities, or Third Tier Authorities, numerous other local authorities, and several statutory entities. Except for one of the Second-Tier Authorities, the Administration for Whites, the others depended heavily on financial transfers from the Central Authority, because their only other significant source of revenue was the personal income taxes paid by members of their respective ethnic group. While formally established to provide a measure of self-government to various population groups, with the exception of the Administration for Whites, the Second Tier Authorities lacked the necessary human and financial resources to operate efficiently. As a result, public services and the economic and social infrastructure were largely oriented to serve the major urban centers where the white population lived, but few services were provided to rural areas. xiii. Because of the cumbersome structure, the new Government inherited an oversized public administration, as well as a budget that was too short on investment, excessively focused on a minority of the population, and of questionable efficiency. During the first half of the 1980s, the deficit of the Central Authority was equivalent, on average, to 20 percent of GDP. Namibia relied heavily on the RSA for financing the deficit: the RSA transferred an amount equivalent to about 6 percent of GDP as straight budgetary support until the mid-1980s, and the rest was financed by commercial banks with loans guaranteed by the RSA. In the second half of the 1980s, Namibia had t adjust to declining budgetary support from the RSA, initially by raising taxes and cutting capital expenditures. Higher taxes raised revenues by an amount equivalent to about 8 percent of GDP, and the reductions in capital outlays reduced expenditures from about 12 percept of GDP (in fiscal 1981/82) to about 6 percent in fiscal 1988/89. Nevertheless, current expenditures remained high, at about 35 percent of GDP, and the adjustment measures did not address fundamental imbalance problems. The tax base is narrow and heavily dependent on diamond and uranium revenues, hence sensitive to fluctuations in the prices of these two commodities. Current expenditures are still too high and capital expenditures too low. A cumbersome bureaucracy and attendant inefficiencies are reflected in an excessive wage bill for the general government (estimated at 17 percent of GDP in fiscal 1989/90, or triple the 1986 average for all - iv - developing countries), high current expenditures, and low-quality services for most Namibians. The challengefor the Government Is to change the composition of expenditures, increase their efficiency, and contain their growth. xiv. Options for stimulating growth and finding ways for using the incremental income to alleviate poverty call for a clear division of labor between the public and private sectors. The Government's main task, as viewed in this report, is to define the "rules of the game," while the private sector is to use resources efficiently within the rules specified by the Government. The approach calls for Government intervention only to address specific problems if market forces fail to do an adequate job. The idea is that growth should come primarily from the private sector and that the Government should provide social and other services to alleviate poverty and improve the distribution of income. The report emphasizes the use of fiscal policies to alleviate poverty and to raise incomes through productivity gains. Because Namibia's income is likely to come primarily from mining and fisheries, the report emphasizes a strategy based on maximizing economic rents from these activities and using fiscal instruments to channel part of these rents to finance social programs, especially those that improve education and health. In general, the recommendations discourage the use of other policies--monetary, trade, industrial, etc.--to address income inequalities. xv. The report's analysis shows that in the short term there is some scope for improvement in income from crop agriculture but that there would be few employment gains. Agricultural income growth can provide a stimualus to the development of rural non-farm activities and links to nearby towns. Development of fishery resources can provide Namibia and the fisc with a new source of income in the short term. In the medium term, processing of fish and agricultural products for export can provide further employment growth. Reactivating Growth xvi. The vast majority of Namibia's productive assets are in private hands, and the Government plans to rely on the private sector to reactivate economic growth. To this end, it is committed to providing an enabling environment to stimulate private sector investment for sustained reactivation of the economy. Both private and public investment declined precipitously during the first half the past decade, the former at an average rate of nearly 19 percent per year, the latter at nearly 15 percent per year. Private and public investment rates have recovered in recent years, but private investment is about one-third below its 1980 level, and public investment is less than one-half. Relative to GDP, gross fixed private investment in 1989 was 11 percent and gross fixed public investment 5.2 percent. xvii. Namibia's options for reactivating growth and investment are limited. As a member of the Southem Africa Customs Union (SACU) and of the Common Monetary Area (CMA), its trade policies, exchange rate, and monetary policies are set either within the SACU framework or by the Reserve Bank of South Africa. This means that fiscal policies are the Govermnent's main tool for macroeconomic management. Inflation, controls on the movement of capital in and out of the country, and interest rates- all important considerations for private investors-are beyond the control of the authorities. xviii. Nevertheless, reactivating growth is perhaps the less difficult of the Government's four economic challenges. First, economic policies at the sectoral level are already conducive to growth and need only minor modifications. Namibia has no history of interfering with market forces in resource allocation: there are few price controls, no investme-it controls, no widespread subsidies, no import and export licensing. To be sure, the prices of some agricultural products are set by marketing boards according to the price of similar imports adjusted for transport costs (import-parity rules), and there have been some interes rate subsidies, but these are the exception rather than the rule. Second, the extension of Namibian control to the Bengdela Current in the Namibian Sea and an exclusive 200 mile economic zone will provide an additional source of income. 7hird, new gold and diamond mini.s are coming onstream, and as a result, mining output is expected to increase during the next two years. Fourth, with proper policies, agricultural output might increase rapidly during the next five years. Independence, moreover, has made it possible for Namibia to penetrate the European beef market on advantageous terms. Finally, sanctions against the Republic of Soutl& Africa, which once affected the price and volume of Namibian exports. no longer affect the newly independent country: there might be some gains from improvements in the terms of ti ade and opportunities to penetrate new markets. Sources of Growth xix. Consideration of Namibia's economic outlook must begin with the country's export prospects for two main reasons. First, Namibia's main productive sectors--agriculture, mining, and fisheries--are heavily oriented toward exports. The small domestic market of about 1.7 million people, would be incapable of absorbing a substantial share of new output. Second, the Namibian economy is highly dependent on imports for output expansion and is likely to remain so for the next ten years. Although the country does not have a binding foreign exchange constraint, as soon as it introduces its own currency it will lose the cushion now provided by the foreign exchange reserves of the RSA. The economy will need to generate foreign exchange to pay for its imports. Nevertheless, while export performance is important, any country's long-term development depends on its ability to improve its productivity. This section assesses the country's prospects in the light of the recomrmendations given below. Fisheries xx. The fisheries subsector offers promising prospects for quickly increasing Namibia's income. The Namibian Sea is one of the largest and most productive coastal fishing grounds in the world, but Namibia's pre-independence political status meant that there was no internationally recognized coastal state management authority. Fishing took place without control of access, with few benefits accruing to Namibia. The authorities' proclamation of a 200-mile Exclusive Economic Zone (EEZ) immediately after independence made it possible to exercise Namibian sovereignty over this vast maritime territory. With proper management of the resource, the value of the catch in Namibian waters could increase from R600 million in 1991 to RI billion by 2000 (US$240 million and US$400 million, respectively). Not all this income will necessarily accrue to Namibia, but a catch of this size could yield as much as R150 million from licenses alone in 1991 and some R250 million in 10 years' time-amounts equivalent to about 2.5 - vi - perceint of GDP. To realize this income, the Namibian authorities need policies that will control access to the fishing grounds and extract as muclh income as possible, subject to biological limits to allow the resource to replenish. These policies will require (i) selling fishing licenses at an appropriate price with a mechanism that is transparent, e.g., through auction; (ii) establishing a mechanism for surveillance that will permit updating data on stocks; and (iii) establishing the means to gather data on catch and ensure adherence to fishing limits. General guidelines are discussed in Chapter VI. In the medium to long term, fishing-related activities (e.g., fish processing) could also add to Namibia's growth, but to realize this potential, sizeable investments in processing facilities and infrastructure would be needed. Mining xxi. Mining is the backbone of the Namibian economy. On av-rage, over the past 10 years it accounted for: * 76 percent of export earnings o 38 percent of tax revenues * 31 percent of GDP * 18 percent of cash wage earnings * 18 percent of gross domestic fixed investment Eight foreign-owned companies account for 98 percent of the sector's value added, and two, Consolidated Diamond Mines (CDM) and Rossing Uranium, which account for about three-quarters of the sector's output, are significant by world standards. CDM ranks sixth in production value and Rossing ranks fifth in Western world uranium production. xxii. Mining output has been stagnant for at least 10 years, and its growth potential in the near future is modest--mostly from diamonds and gold. The new Auchas diamond mine is expected to yield some 44,000 carats per year of mainly gem-quality diamonds. Elizabeth Bay, another new mine, is expected to come onstream shortly and to yield some 250,000 carats per year, with stones of 95 to 98 percent gem quality. These two diamond mines are expected to boost Namibia's production by one-third, to one million carats per year. Gold production is expected to rise about one-fifth as a result of the Navachab mine coming on stream. More intense exploration could mean a better long-term outlook. Overall the mining sector is expected to grow some 2 percent from 1991 to 1994, some 3 to 4 percent in 1995 to 1996 and, if investment picks up soon, to grow faster at the end of the decade. xxiii. Compared to other countries with a long mining tradition, Namibia is relatively unexplored, and its geological structure, its great variety of rock types, and its vast land mass (equivalent to Texas and Mississippi together) suggest that there is stIll considerable potential for the discovery of important new mineral deposits. Because of general uncertainty ab& tt the country's future, exploration programs in recent years merely aimed to replace depleted reserves, and no substantial "grass roots' exploration-the key to future development-has taken place. The !ong "gestation period" in mining means that even if investment were to pick up now, the pay-off would not come before the middle of the decade, suggesting that higher investment rates are needed urgently. - vii - xxiv. The Namibian authorities do not need to make radical changes to current policies, nor adopt drastically new policies to stimulate investment. The present policies already provide the economic environment to attract the high-risk investment capital required to find and develop new mines. It would help, however, if the Government were to undertake a marketing program to "sell" the country to outside investors. A key element of this marketing effort would be the formulation of a private sector-oriented policy and a strategy for the sector that in one concise document would define the "rules of the game" with respect to the applicable legal, tax, and investment framework. The on-going revision of the tax code to conform to best practice, bringing it in line with codes of other mining countries, will also help, especially if it Makes Namibia as attractive to investors as any other country in the world. Because of the loIig gestation period of investment in mining, the revisions of the mining and tax codes need to be done soon. It should be emphasized that these are efforts at the margin, as the main world-class mining companies are already working in Namibia and are aware of the prevailing business environment. The main purpose of a mining policy paper would be to reassure investors, rather than to make radical changes. To achieve the various aims, the Government needs to provide (i) mining legislation and taxation schemes that are competitive, fair and applicable to all investors equally; (ii) transparent and stable legislation, straightforwardly implemented; and (iii) geological information and support to build infrastructure. Agriculture xxv. Agriculture is by far the most important employer in Namibia, supporting directly or indirectly some 70 percent of the population. The communal agricultural sector provides employment to about 300,000 people, more than half of the economically active population. Although the sector contributes only about 10 percent of GDP, far less than the share from wholesale and retail trade, it is the most important exporter, after mining, with a one-tenth share of total exports. Good agricultural performance, therefore, affects the lives of most Namibians not only directly but also indirectly through its contribution to the country's foreign exchange earnings-a feature that wi'l acquire more importance when Namibia introduces its own currency. xxvi. The sector has not performed well during the past decade, declining at an average annual rate of 1 percent per year. Until recently, official statistics excluded subsistence farm production, which which add about two to three percent to GDP, but which would not change the overall result. One bright note is the growth of commercial cereal output, which grew at an average annual rate of 24 percent during the past five years. xxvii. Output variations were particularly marked during the 1980s when drought brought output down by 43 percent between 1982 and 1984. Although the value of agricultural output in real terms had reached the pre-depression level of R156 million by 1989, output had not fully recovered in physical terms. The additional value expansion came from increased value-added through the extension of local processing. xxviii. Between 1980 and 1985 bad weather plagued the sector, but while drought may explain interannual output variations, the explanation for secular declines in the sector's performance must be sought elsewhere. The commercial ranching sector may be facing limits to growth imposed by land and - viii - water scarcities. In the three years preceding independence, many large-scale livestock farmers shifted capital out of farming (and into South Africa's financial markets) by reducing the size of their herds. Both investment and output suffered. Cattle sales declined 4 percent per year after 1980. The decline in karakul pelt production, which fell by 80 percent in the decade, can almost certainly be explained by a collapse in international prices, while sheep and goat sales increased at 8 percent as farmers switched from karakul to goats and to the more profitable, but less environmentally kind, breeds of sheep. As a result, production and exports of mutton and wool have risen. So far, there has been little or no growth in communal agriculture to offset the declines in commercial sector output; the extreme inequalities in the distribution of resources, markets and services have marginalized the vast majority of communal farmers and suppressed any contribution they may have made. xxix. Land of good quality is a major growth constraint to agriculture, at least with present technological knowledge. Although vast and relatively unpopulated, Namibia is flanked by two major deserts, and the land between them is not prime agricultural land. In terms of stock, the carrying capacity of the range declines steadily from the northeast, where 7-10 hectares are needed per head of large stock (cattle and range game), to the southwest where more than 30 hectares are needed to sustain a single head of large stock. It is estimated that as few as two hectares, but as many as 10, are needed to sustain one person on a long-term basis in the north, where presumably the land is the best. The present ratio of 2.9 hectares per person in Owambo, Kavango, and Caprivi is at the extreme limit of the long-run sustainable range. And the land is by no means uniformly good. xxx. Water is the other major growth constraint. Irrigation potential is probably limited to about 32,000 hectares, of which 18,000 are in communal areas. Owing to evaporation, surface water is extremely limited, and the underground water table is dropping. Some form of irrigation is used on approximately 6,500 hectares of arable land, of which 5,600 hectares are in four commercial areas. In the Ovamnbo region the intensification of crop farming though irrigation is limited in many places by saline encroachment and in others by a salt layer that may draw to the surface after a few N -qrs of water application. xxxi. Growth prospects in agriculture will depend largely on the performance of communal farmers. Long-run trends suggest that commercial ranching may have reached growth limits imposed by poor land quality and scarce water. Large-scale farmers have started cereal production in a few better-endowed areas and commercial cereal output has grown rapidly in the past five years, but the contribution of arable output is still too small to make much difference to the sector's overall performance. Maize farming has become established in the "maize triangle" near Otavi, and wheat is being produced with supplementary irrigation near Hardap: cereal production grew 24 percent per year in 1984-89. Other higher value crops have followed. Strong growth might be sustained from this base, but because of the scarcity of good land, its long-run prospects are limited. xxxii. Communal agriculture, which contributes only 15.4 percent to overall sectoral output and which has grown slowly, offers more hope. Extreme inequalities in the distribution of resources, and access to marketing channels and services have marginalized the vast majority of communal farmers and their potential contribution to sectoral output, as discussed in Chapter V. Nevertheless, the communal sector has the potential to grow at a healthy rate and push overall sectoral growth to some 6 percent per year during the next five years. Key actions to realize these prospects include (i) integrating the northern - ix - farmers into the national market by opening distribution channels in the north and providing credit, extension, and veterinary services to communal farmers; (ii) improving the road network in the north for transporting inputs and produce to and from the communal areas; (iii) relaxing transport regulations; and (iv) emphasizing the production of high-value crops. Chapter V gives specific suggestions to increase the output of communal farmers, and Chapter XII provides preliminary economic assessment of investments in rural access and other types of roads, as well as some specific suggestions for deregulation. Provided that communal farmers respond to policy changes, agriculture might grow about S to 6 percent per year in the next five years, as shown in Table 1. Without rapid growth in the communal areas, agricultura! output is likely to grow at 4 percent per year, or less. Table 1 Namibia: Projected Rates nf Growth of GDP, 1991-96 (Percentages) Sector 1991 1992 1993 1994 1995 1996 Agriculture 4.5 5.0 6.5 6.0 6.0 6.0 Fishing 3.4 3.5 3.5 3.4 9.0 9.0 Manufacturing 4.0 4.0 4.5 4.5 4.5 4.5 Other Industry 5.0 5.0 5.0 5.0 5.0 5.0 Mining 2.0 1.5 0.0 3.0 5.0 2.0 Other 3.5 3.5 3.5 3.5 3.5 3.5 GDP 3.3 3.3 3.1 4.0 4.9 4.7 Consumption/capita -0.6 0.4 0.7 1.3 0.8 3.0 GDP/capita 0.1 0.1 -0.1 0.8 1.7 1.5 Overall Growth Prospects xxxiii. If (i) communal farmers respond to incentives as expected; (ii) the authorities capture the rents in the fisheries sector; and (iii) investment levels stay at or above some 17 percent of GDP, the World Bank's economic model suggests that Namibia is likely to attain a rate of growth of 3 percent per year in the next three years and closer to 5 percent per year in the following three, as shown in Table 1. In the longer term, Namibia's prospects are brighter. First, income from fisheries is likely to increase as stocks recover and second, mining output is likely to rise if investments in exploration and new mine development are undertaken now. Namibia is one of those rare countries where the longer-term growth prospects are more favorable than the more immediate ones. Alleviating Poverty xxxiv. The alleviation of poverty is the most difficult challenge facing the new Government. Namibia has a serious problem of relative poverty, evident in the highly skewed distribution of income, and an equally serious problem of absolute poverty, evident in the proportion of the population below the poverty line. In addition, available data suggest that during the 1980s the situation worsened, as Table 2 shows. Table 2 Namibia: Per Capita GDP by Sector (1980 US Dollars) White Black Year Total Modern Wage Employment Subsistence 1980 1,140 12,830 900 59 1984 953 11,236 759 62 1988 921 12,839 585 55 xxxv. The first step in designing policies to help the poor is understanding who they are, where they live, and how they earn their livelihood. In Namibia, as in the rest of Africa, poverty is primarily a rural phenomenon. The Namibian poor either own small amounts of unproductive land or have no land at all. They also lack human capital and live from agriculture and the fruits of their unskilled labor. Compared to the rest of the population, the poor also have less access to public services, such as health and education, and as a result have a lower income-earning capacity. Typically, poor families are headed by a woman whose husband works in a city, leaving her responsible for farming the family plot. The family ekes out a living growing millet (or other crops) and raising a few head of cattle or goats. The sons tend the animals, walking hours daily to watering holes, while the daughters fetch water for the household from a distant source. These tasks take three to eight hours and compete directly with school attendance. The head of the household is likely to have given birth to her first child while still in her teens and to have given birth to five more, not all of which have survived beyond their tenth birthday. In fact, one out of 20 children is likely to die before his/her first birthday and one out of 10 before the age of five. Of those that survive, one out of three goes hungry for enough of his/her childhood to suffer stunted growth, and in some areas of the north, one out 10 actually starves. xxxvi. There are no quick solutions to poverty alleviation. The key lies in raising the productivity of the poor and creating employment in the framework of a rapidly growing economy. But while the rate of growth matters, the pattern of growth is equally important: "countries that have been most successful in attacking poverty have encouraged a pattern of growth that makes efficient use of labor and have invested in the human capital of the poor" (World Development Report 1990). This two-part approach, encouraging labor-intensive growth and investing in the human capital of the pocm, is the basis for the strategy of poverty reduction proposed in this report. In particular, the strategy calis for (i) increasing the demand for the poor's most abundant asset-labor-through a policy of broad-based, labor-intensive growth; (ii) adopting a concerted program of social expenditures to improve the poor's access te basic - xi - health and educational services, with the twin objectives of increasing the poor's productivity and improving their living conditions; and (iii) establishing a system of well-targeted transfers and safety nets for those who may not benefit from the two preceding measures. Labor-Intensive Growth xxxvii. Poverty alleviation in Namibia necessarily entails reducing unemployment. According to the ILO, the economically active population stands at around half a million and is increasing at a rate of 3 percent per year, equivalent to 16,500 new labor-force entrants per year. In addition, current open unemployment is estimated at 25 to 30 percent, or around 40,000 to 60,000 people. No single sector is likely to provide a dramatic increase in employment. The outlook is for widespread, but incremental gains across all sectors. If the projected growth rates materialize and labor absorption proceeds according to patterns in countries similar to Namibia', approximately 1,000-20,000 jobs will be created in the formal sector in next five years. Thus, policies designed to accelerate growth need to contain specific measures to stimulate labor-intensive economic growth. They also require (i) moderate taxation of agriculture and relatively undistorted product and factor markets; (ii) public provision of infrastructure and an environment that makes technical change accessible to small farmers and the urban poor; and (iii) specific policies to improve the participation of the poor in economic growth by increasing their access to land, credit, and public infrastructure and services. Efficient Growth in Agriculture xxxviii. The experience of other countries shows that the expansion of agriculture lays the basis for broadly-based, poverty-reducing growth. The poor benefit directly if they are farmers, and they benefit indirectly from growth in the demand for farm labor and for the products of the rural non-farm sector. Moreover, agricultural growth helps the rest of the economy. Typically, countries with rapid agricultural growth have also had rapid industrial growth. xxxix. The main policies that affect agricultural performance are taxation and public support to agricultural develoi.nent and taxation. Although the range of experience is wide, countries that have performed well have usually taxed agriculture moderately and provided strong support to agriculture through infrastructure, research, and technology. xl. This type of support for agriculture has had a decisive influerce world-wide on the level and pattern of agricultural growth and on private investment in the sector. Better infrastructure has led to increased productivity, technical change, and stronger market linkages, while technological change has been vital for agriculture. The record of the past 30 years supports the argument for public funding of agricultural research and for dissemination of new technologies in small-scale production. In Namibia, the commercial sector already has adequate access to research and extension services, is already well served by the country's excellent infrastructure, and its economic interests are looked after by the numerous marketing boards, as discussed in Chapter V. The communal sector, however, does not have 1/ The projections assume elasticities similar to those calculated by the World Bank in Zimbabwe. xii - any of these advantages and, as a result, is not integrated with the rest of the economy. The suggestions for improving the productivity of communal farmers offered in para. xxxii would not only have a positive impact on growth, they would help alleviate poverty, as would the suggested investments in infrastructure, mentioned above and discussed more amply in Chapters V and XIII. xli. Agriculture in Namibia is already lightly taxed, perhaps too lightly taxed, as losses in agriculture may be deducted from other income, giving rise to "hobby" farms. This report, however, does not address taxation in Namibia; the IMF is already addressing taxation issues. Indirect taxation, stemming from price controls, industrial protection, and overvalued exchange rates, has not been a major problem in the commercial sector, but for communal farmers the situation is different. xlii. Pricing--by various marketing boards--of agricultural products has been favorable to commercial farmers. Over 90 percent of Narnibia's livestock is sold to South Africa at higher-than- international prices; wool and karakul pelt prices are determined by export prices; and maize is priced by the Agronomic Board according to import-parity rules, or higher. Moreover, the previous administration subsidized the purchase of land through negative real interest rates, and although the Landbank has increased interest rates from 4 to 18 percent per year (above inflation, but lower than commercial banks rate), there is pressure to return to previous practices to redress past inequities. xliii. For communal farmers in the northern areas, the situation has been different. Isolated from the national and export markets by the "red line," their only sales outlets have been the Oshakati abattoir, which buys all grades of meat at low canning-meat prices, and the local butchers. By virtue of low product prices and unavailable (hence infinitely expensive) credit, communal farmers are being taxed higher than coinmercial farmers. Efficient, labor-intensive growth requires that market forces continue to determine output prices for commercial farmers and that communal farmers have more access to credit and to the national livestock market. For those agricultural goods where total liberalization of price determination is not feasible, for non-economic reasons, import-parity rules are a good substitute. Policies that distort the relative price of labor, such as capital subsidies, targeted credit, and tax credits, need review. Underpricing other important factors of production--land, water, and technology-may also be detrimental to the potential absorption of labor; the prices of these inputs also need review. Chapter V discusses these policies in more detail. Finally, the price of labor deserves special attention. Factor Market Irnerventions: Wage Rates xliv. Professionals and skilled labor are scarce in Namibia, and both can command premium wages. But the supply of unskilled labor far exceeds the number of jobs available; wages for this group remain low and will probably remain low until unemployment abates. The introduction of a minimum wage to protect unskilled labor at this time would be counterproductive and likely to segment Namibia's labor market further and slow employment creation. While a minimum wage might preserve wage gains for a few, it would do so at the expense of those still excluded from the labor-market. xlv. An alternative would be to pursue negotiated wage settlements under arbitration, if needed, and make the results public. Barriers in the skilled and seml-i-skilled labor markets could be lowered through expanded access to the Ministry of Labor's program of certification. It would be desirable for the Government of Namibia to continue setting standards for training and certification and to consider - xiii - subcontracting training services to the private sector. Nevertheless, efficient creation of employment opportunities thr3ugh economic growth is the most important labor market policy. Informal Sector Activities and Deregulation xlvi. Finally, the removal of unnecessary barriers to the development of informal sector activities will also help employment creation. Small businesses offer prospects for employment growth, but they need access to input and product markets. To ensure the poor's participation in employment opportunities, small business regulations and labor market codes need review, Overly restrictive regulations on small businesses and services, such as food venrding and transport (discussed in Chapter II), need to be relaxed or modified, taking care not to jeopardize public health. These regulations tend to protect formal sector businesses against competition; experience in other countries shows that they impose high employment and equity costs on the economy. Investing in the Human Capital of the Poor xlvii. The second part of the approach to alleviate poverty calls for a heightened effort to provide basic health and educational services to the poor. There is overwhelming evidence that investing in human capital is one of the keys to reducing poverty. Moreover, improvements in health, education, and nutrition reinforce each other (World Development Report 1990). Too little investment in the human capital of the poor increases the probability that thjy will remain poor and that their children will also be poor. Improving Health Servces xlviii. According to World Development Report 1990 figures, the Namibian Government spends far more of its country's GDP on health than do other middle-income countries, yet health conditions in Namibia are c.oser to those of other Sub-Saharan African countries. Namibians, for example, li, - 10 years less than the population of middle-income countries-paradoxical in a country that spends as much of its GDP on health care. The reason is that the structure and orientation of the service delivery system has been built around thts concept of curative rather than preventive health care. The major health problems in Namibia are infectious diseases, and the hardest hit are poor black children. The illnesses of children, diarrheal arJ respiratory, are amplified by a variety of interacting factors: malnutrition increases disease severity; inadequate water supplies, sanitation facilities, and housing increase the incidence of disease. The high fertility rates, lack of pre-natal care, and family planning services further exacerbate the impact on the community. Tuberculosis and malaria are the major infections that affect adults as well as children. xlix. The health care system is ineffective in targeting the groups that these diseases afflict most severely: children in rural areas, child-bearing women, and poor uneducated adults, those who lack the necessary resources and education to access the health care system effectively. By design, the system treats disease after it develops, inevitably leading to increased costs, suffering, and mortality, conditions that are also influenced by factors outside the service-delivery system. Without attention to childhood - xiv - and maternal nutrition, and to clean water and sanitation, infectious disease control will be limited. Preventive as well as curative strategies aie needed. l. Namibia does not need to spend a substantially higher proportion of its GDP on health care. It needs to reorient its health delivery system toward preventive health care and to emphasize access for the poor. Better living conditions will not only relieve human suffering but also generate the time savings necessary to enable people to take advantage of emerging income opportunities. Ii. Improved health delivery systems alone, however, will not be enough. Crucial indirect determinants of disease also need attention. Malnutrition increases the morbidity and mortality of infectious disease, poor water and sanitation are associated with diarrheal illness, inadequate housing facilitates the spread of tuberculosis, and unemployment enhances the incidence of alcoholism, with all its attendant social problems. Unaddressed, these indirect factors will neutralize the effects of efficient service delivery. The issues cut across sectors as well--lasting improvements in public health will require efforts beyond the activities of the health sector. Chapters I-XI propose specific measures to improve the delivery of primary health care, water, sanitation, and housing services to Namibia's poor. These following paragraphs highlight some of the most important suggestions. Iii. First and foremost, the authorities need to continue their program emphasizing preventive health care and more services for the poor. Inevitably, there will be trade-offs, and some services now provided by the state may have to be provided by the private sector. However, no compelling reason dictates having the state provide every health ,crvice to everyone. In fact, worldwide experience indicates that a division of labor between the state and the private sector might be more efficient, with the state takling responsibility for (i) providing health interventions that either lave a public-good character (traffic safety, for example) or that generate bencit to the overall community (for example, immunization against communicable diseases); (ii) providibg zurative services that the private sector might not provide at all; and (iii) ensuring that the poor have a*-cers to basic care. Iiii. Second, the system needs to expar' coverage. To this end, the authorities might consider decentralization. In Chile, transferring respons a lity for many public health services from the central government to the municipalities helped broadef' the system's coverage. Partly as a result, infant mortality fell from 103 per thousand in 1965 to .:' per thousand in 1985 (World Development Report 1990). liv. Finally, the state needs new financing mechanisms to increase revenues and improve equity. User fees based on ability to pay would be a step in the right direction. As of 1990, the maximum rate for private patients was R75 per day (US$30) with additional user fees for specific services. Often charges were much lower: R25-50 per day (US$10-20). Full-cost fees for patients who can afford it would decrease usage, free up resources, and make it possible to render the services more widely. - xv - Improving Education lv. Raising the education and skills levels of poor Nainibians will increase labor productivity, broaden the employment base, raise individual incomcl;, and improve the country's international competitiveness. Recent research points to a strong link between education and economic growth. As with health, Narnibia already spends as much of its GDP as any countrv in the world-8.5 percent. Yet the educational status of the population is no better than that of most Sub-Saharan African countries. Two statistics suffice to make the point: six out of 10 Namibians are illiterate, and seven out of 10 have not completed four years of schooling, the internationally accepted minimum requirement for maintaining literacy skills. lvi. The system's dismal performance results from the cumbersome and expensive administrative structure that pre-independence apartheid policies required. The maintenance of 10 separate ethnic administrations, in addition to the Department of National Education, which served ethnic groups living outside their designated ethnic regions, entailed unnecessary duplication of expenditures. Separation along ethnic lines also perpetuated differences in the quality of education, as the poorer administrations could not afford as many good teachers, build as many good schools, and buy as many materials as the Administration for Whites. As a result, although the averages of key indicators look good, they are unduly influenced by the high quality of education for whites. Moreover, the variations among regions and ethnic groups are astounding. Finally, Namibia's previous administration had a penchant for sacrificing numbers for quality, as evident in many aspects of Namibian life--the high quality of the hospital buildings, the high quality of the roads, and the high quality of the school buildings: good, but too few of them. Ivii. In general terms, the authorities' most important tasks are first, to articulate a policy framework against which to consider and evaluate proposed development and recommendations; second, to streamline the administrative system; third, to emphasize access to lower secondary education, by the judicious expansion of strategically-located primary schools, and thus moving toward a 10-year basic education for all; fourth, to give high priority to the upgrading and reorientation of all teachers so that effective learning can keep pace with the changing curriculum; and last, to improve the quality of the curriculum. Chapter X provides specific suggestions for improving the delivery of education to the poor. One area that deserves special emphasis, however, is farmer edi,cation and technical services. As discussed in Chapter V, there is a great need for better communal farmer education and technical services support to increase farmer productivity and give farmers coiufidence to invest in new, more profitable crops. Direct Employment Creation lviii. Although the main emphasis to increase the demand for labor must be on the policy framework and efficient economic growth, such programs might not be enough to effect a substantial alleviation of unemployment, especially in the short term. For this reason, it would be advisable to consider options for employment generation through public works schemes. Labor-intensive construction of rural access roads in the north, for example, would provide employment opportunities and improve marketing channels for communal farmers. The Department of Transport is already considering - xvi labor-intensive road construction, and its efforts deserve encouragement. An ambitious low-cost housing program along the lines suggested in Chapter XI would likewise create jobs and address a pressing social need. lix. Given the resource limitations and the extent of need, it will be critical that the Government and donor employment programs conform with sector development strategies and be fully justified on economic grounds. Moreover, such programs should not compete with other employment: they should run during periods of slack agricultural labor demand and should pay wages below those prevailing in the market. Gender-specific Programs Ix. This strategy demands particular efforts to include women. Women are significantly disadvantaged in their economic activities. While they hold primary responsibility for family maintenance and welfare, they have the least amount of discretionary time to avail themselves of social services and supports. The primary target groups for credit, skills, training and social services should include urban and rural women. Laoor-short female-headed households may be unable to benefit from employment schemes, and it would be advisable to assess the economic and social feasibility of direct transfer assistance for these households. Improving Safety Nets lxi. In 1989 the Council of Churches in Namibia/Repatriation, Resettlement and Reconstruction Committee (CCN/RRR) estimated the "nutritionally needy" at 150,000 people. Despite employment gains, the most vulnerable people will continue to need transfer assistance. A system of safety nets for the poorest is critical to stabilizing their welfare and facilitating sustainable poverty reduction in the short run. The design of a safety net system is beyond the scope of this report, but some suggestions to improve the present system are possible. Ixii. The system of social safety consists of state transfers (social pensions and other targeted assistance schemes) and church, NGO, and donor-based programs. The most important public sector program is the social pension managed through the Ministry of Health and Social Services (MOHSS). Every Namibian over the age of 60 is eligible for a social pension, currently R92 per month. The other main public sector safety net is the Remission of Rent Scheme (also managed through the Ministry of Health and Social Services), whereby residents of township-municipal housing may qualify for rent exemptions. Eligibility for the scheme is subject to a strict means test, which also determines the amount of subsidy, up to a maximum of R74 per month. By limiting eliribility to households that rent municipal housing for at least two months, the scheme is not reaching the -:oorest of township residents (squatters, those in single quarters, etc.). It would appear that the meam test is too strict, as only 3,348 people benefit from the scheme, and the average subsidy per household is omy half the maximum allowable. lxiii. In both cases, it would appear advisable to explore the scope for restructuring the transfers. For social pensions--nearly one-third of the total Ministry of Health and Social Services budget-the xvii - Government might consider scaling pension benefits to favor the poor. The Remission of Rent Scheme is small, but apparently mistargeted, and with nearly 50 percent of the budget going to administrative expenses, it is also inefficient. The same resources could be better deployed as direct transfers (rather than a payoff by one part of the Government to another) or for upgrading housing (sites and services) for the poorest of the urban poor. Poverty Alleviation Through Asset Redistribution Ixiv. Even though the Government of Namibia is committed not to expropriate land, and current legislation prohibits the break-up of existing production units, the redistribution of assets--particularly land--as a quick way of alleviating poverty needs to be addressed. The land-scarce, the landless, and the political leaders point to unequal access to land as one of the root causes of inequality. R'4istributing the existing stock of assets to the poor has reduced inequalities in some countries, but this has been the exception rather than the rule. In the case of Namibia, a large redistribution of land would probably not be in the best interest of the Namibian poor. However gross, the maldistribution of land is but one of several reasons for the wide disparities in income. Others include differential access to education, health care, and labor markets. Although access to land is of considerable importance, massive redistribution may not be a feasible option nor the most efficient way to redress past inequalities. lxv. Namibia's landmass, although vast, is of poor quality. Two major deserts--the Kalahari and the Namib--occupy large portions of the country and as much as two-thirds is either arid or semi-arid. Consequently, minimum-economic-size farms need to be very large. Stripping down large holdings to make smaller ones would result in a patchwork that could not be farmed efficiently. On the other hand, if all the usable land could somehow be re-allocated so that existing farmers (commercial and communal) had a farm of minimum economic size, as recommended by the Ministry of Agriculture, about 2,100 new cattle farmers and 500 new smallstock farmers would receive rangeland, but there would be a loss of 13,300 farms in potentially arable communal areas because existing holdings would have been amalgamated to achieve an "economic" size. This simple exercise suggests that an administered land reform is unlikely to bring any benefits at all in communal areas and only small benefits in livestock areas. Trhe authorities are caught on the proverbial horns of a terrible dilemma. Land reform that safeguards efficiency and production is not likely to satisfy the aspirations of many. Land reform that satisfies the aspirations of many is likely to do so for only a short time; in the medium term it may bring outpu. down considerably and expose new farmers to undue risk of economic failure. Redirecting Public Expenditures lxvi. The final challenge, redirecting public expenditures, must be met if Nambia's health, edu_ation, and housing services are to improve rapidly. Fiscal policy is the Government's main tool for addressing the present extraordinary inequalities in income and access to social services. Namibia inherited a capable and experienced public administration that is well placed to help meet the country's social and economic challenges. An important task for the new Government is to capitalize on the experience and expertise of the public serv,ce and marshall their efforts to serve the previously disenfranchised and neglected majority. - xviii - The Fiscal Position at Independence lxvii. Namibia was in a relatively strong fiscal position at independence. For nearly five years the operations of the Central Authority had been progressively adjusting its operations to match the declining budgetary support from the RSA; in the year before ,ndependence the budget virtually balanced. At the same time, the public debt had fallen to very low levels, and two of the three major non-financial public enterprises, run on commercial principles, enjoyed overall surpluses and little or no debt. lxviii. Namibia's public administration however, confronts difficult problems. It has inherited a complex administrative apparatus and a narrow revenue base that is still vulnerable to changes in world market conditions. Expenditures are still high, despite dramatic reductions of investment expenditures. Finally, budget support from the RSA--down to about 3 percent of GDP in the year immediately before independence-is likely to shrink further. Given the narrow tax base and the already high tax burden, there is limited room for increased taxation in the short term. The challenge for the new Government is to maintain existing assets and rationalize the public administration to meet new priorities without jeopardizing fiscal and macroeconomic stability. Revenue Projections lxix. The revenue projections presented here are based on the macroeconomic projections summarized in para. xxxiii, taking into account some specific circumstances that might affect fiscal performance. Mining was the single most important source of tax revenues, but with the sector's stagnation, its share has declined. The slow projected growth of the sector along with write-off provisions for investment indicate that future mining tax revenues are likely to grow slowly. Individual income taxes, which in 1990/91 accounted for about 6 percent of GEP, are likely to remain constant relative to GDP, while taxes on international trade, which in 1990/91 accounted for about 9.3 percent of GDP, are likely to decline slightly, due to the relative fall of diamond export as a percent of GDP and the decline of SACU receipts. Finally, the other major item, taxes on domestic goods and services, is likely to decline. All told, tax revenue is likely to fall from 29.8 in 1991/91 to 26.7 percent of GDP in 1995/96. lxx. These projections are on the conservative side. Namibia's nominal tax rates are already high and, with the possible exception of the land tax discussed in Chapter V, it would not be advisable to raise further. Tax administration, however, can be improved, existing exemnptions tightened, and liberal write- off provisions reduced. These changes would increase revenues and further the equity of the tax system. The narrow tax base is a reflection of the economic system, and, therefora, the tax base will automatically widen with broader-based economic development. Revenues " Iso be increased through the implementation of the recommended system of user charges and cost recovery policies in the social sectors and improvements in user charges for transport, as discussed in Chapters IX-XII, and for postal services, airports, and water services. The major public enterprises, which generally are run on business principles and are in sound financial condition, might be subjected to company taxes. Also, there is no economic reason for exempting them from paying dividends to their shareholder, the Government. Furthermore, the status of the First National Development Cooperation (FNDC), which is a drain on the Central Government, needs examination, with a view to reversing this position. Finally, the projections do not take into account revenues from fishing licenses and the land tax, which could add some 2.5 to - xix - 3.5 percentage points of GDP to fiscal receipts. Thus, under a more optimistic scenario, total revenues might amount to some 33-36 percent of GDP. Expenditures lxxi. Meeting the challenge of poverty alleviation will inevitably require an increase in expenditures, but the major part of the real gains will come from the elimination of inefficiencies in spending and improvements in the quality of services, not from increased budget aliocations. Total expenditures of the Central Authority ranged between 40 and 50 percent of GDP in the 1980s and are estimated to have been reduced to 36 percent of GDP in 1990/91, despite an increase in the wage bill from 9.1 percent of GDP in 1989/90 to 15.4 percent in 1990/91. This increase is in large measure due to accounting methodology reflecting a re-organization of the Government. Only the expansion of the Central Government (for new ministries, embassies, etc.) entailed an increase in total expenditures. The remaining increase in the wage bill reflects a change in the structure of Government and was accompanied by a corresponding reduction of transfers from the Central Government to other Government entities. For the future, the projected expenditures shown in Table 3 decline as a percent of GDP, mainly due to a lower wage bill. Table 4 shows an alternative projection with a wage bill constant in real terms. Although compared to historical levels, the projected wage bill seems low in both cases, this is due to savings made possible by the cessation of hostilities. A functional bneakdown of Central Government exDenditures for the five years before independence shows that about 40 ^ent was spent on protection and for military expenditures and administrative services. The projections incorporate a significant reduction in the share of military expenditures because their need disappeared with the cessation of hostilities. lxxii. The projections also incorporate an assessment of what is possible in the short run. Efficient redirection of resources requires good information, good project preparation, and good project implementation. The present administration did not inherit a ready-made portfolio of projects reflecting its own priorities, nor a database that would enable the authorities to make optimal, or, in some cases. even good decisions, as discussed in Chapters IX and X. Efforts are now underway to create the database as well as the project port.olio, but progress is uneven. For example, it will take time to reorganize the health system and train teachers to provide quality education; in the short run these two sectors probably cannot use efficiently a major increase in resources. On the other hand, within a much shorter period it may be possible to improve the housing situation; provide extension services to communal farmers; and construct feeder roads in the north. The disparities in information, planning, and implementation capacity among the various sectors suggest that strengthening these functions should be concentrated first in the high priority sectors of health and education. lxxiii. Some savings and efficiency gains are also possible. The constitutional decision to abolish the so-called second-tier governments offers hope for a radical streamlining of expenditures in the medium term, even if the constitutional provision that all Government employees be retained limits the scope for immediate streamlining. More efficient use of resources is possible in many areas. For example, using different building materials and standards for low-cost housing, as suggested in Chapter XI, would lower construction costs by 30 to 40 percent. Lower road maintenance standards, as suggested in Chapter XII, would also bring some savings. Finally, subjecting expenditures to strict economic analysis--in road - xx - construction, for example-and undertaking only projects that can be justified on economic and social grounds would improve resource use. lxxiv. Incorporating savings and efficiency gains is difficult in any projection. It is especially difficult in the case of Namibia because of the anticipated major redirection of resources and the limited database. Nevertheless, some rough, global estimates of the monies available and general direction of expenditures are possible. With resources available from taxes and other income, plus expected budget support, the authorities would be able to finance expenditures amounting to 36 percent of GDP in 1991/92 and about 31 percent in 1995/96, as Table 3 showF. With this level of resources, the Government could increase the purchase of goods and services and capital expenditures by 25 percent (real terms) in fiscal 1991/92 and 5 percent per year thereafter, until 1995/96, provided that the wage bill declines about S percent per year in real terms. The latter is a crucial pre-condition and a difficult one to meet. Under this scenario, the Government would be able to finance 15 percent of its capital expenditures in 1991/92 and about 70 percent by 1995/96. Grants and concessional loans could finance long-gestation projects, while domestic financing could underwrite the rest. Looking farther ahead, Namibia needs to strengthen its fiscal position; the authorities cannot continue to rely on external concessional project financing for the medium term. Table 3 is based on conservative assumptions about revenues and on a 5 percent real annual decline in the wage bill. Table 3 Namibia: Central Goverriment Financial Projections (As percent of GDP) Item 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 Total Reveruie 39.0 29.3 32.0 31.5 31.2 30.5 29.7 of which: taxes 34.5 25.9 29.4 28.9 28.6 27.9 27.1 Current Expenditure 35.2 30.1 30.4 29.5 28.5 26.8 25.5 of which: Wages 9.1 15.4 14.7 14.1 13.1 12,0 11.0 Goods & Services 8.4 10.9 10.3 10.5 10.6 10.7 10.7 Cufrent Savings 3.8 0.8 1.6 2.0 2.7 3.7 4.2 Capital Expenditure 3.7 4.4 5.1 5.1 5.1 5.6 5.5 Deficit (-) 0.1 -5.2 -3.5 -3.1 -2.4 -1.9 -1.3 Budget Support 2.8 1.7 2.1 0.9 0.0 0.0 0.0 Other Financing -2.9 3.5 1.4 2.2 2.4 1.9 1.3 - xxi - lxxv. Were the wage bill to remain constant in real terms, the authorities could still provide the same level of goods and services and investment if (i) revenues from the sale of fishing licenses attain their potential level and if the donor community increases its annual support over the next five years by R640 million (US$255 million at 1989 prices), as the projections shown in Table 4 suggest. More borrowing on commercial terms at a time when the public administration is still undergoing reorganization and the data on which to base solid decisions are still wanting, might not be as efficient a use of resources as borrowing in three to four years. Thus, the authorities need to use this instrument with care and only for projects where the social and economic returns, as well as the preparation and implementation capacity, are satisfactory. Fiscal Policy Recommendations lxxvi. Expenditure rationaiization and streamlining of the public administration are critical to bring Namibia's public finances to a sustainable position. In particular, the constitutionally- mandated reorganization of the public administration should contribute significantly to lowering expenditures relative to GDP. Restraining expenditures would require a reduction in the wage bill, a rationalization of expenditures in the social sectors, and a redirection of expenditures to the priority sectors. The base projections incorporate a reduction in the wage bill to 11 percent of GDP by 1996. This projection already makes allowance for the new functions undertaken by independent Namibia and is still about twice the average for developing countries. Government options to attain this goal are to lower employment or to lower real wages. The first option has serious limitations because of the constitutionally-enshrined job guarantee for public employees; attrition and early retirement might be the only feasible alternatives. But streamlining through attrition and early retirement needs to be done early so as not to perpetuate the inefficiencies inherited from the previous administration. Lowering wages would probably not be in Namibia's best interest, as the more capable employees are likely to seek employment in the private sector if public sector wages are not competitive. In the interest of a rapid establishment of a more efficient civil service, experienced civil servants should advise, work with, and train newer staff. lxxvii. Namibia has a fairly large capital stock, but a poorly educated labor force. At this time, human capital is more important for the country's future development. This is not to say that investment in physical assets should be neglected, but Namibia needs to exercise caution in its choice of investment projects and take into account into account (i) implementation capacity; (ii) the opportunity costs of capital; and (iii) the recurrent costs inevitably generated by invtstment programs. Accordingly, the investment program needs to remain within limits that ensure that future recurrent costs do not become excessive and threaten the envisaged fiscal balance. lxxviii. Were Namibia to introduce its own currency, fiscal and financial discipline would be crucial prerequisites for price stability and a strong currency. A publ; sector deficit financed with central bank credit could have deleterious effects on price stability, growth, and probable income distribution, since inflation is likely to affect lower income groups especially hard. A public sector deficit, financed with commercial bank credit, may crowd out the private sector and slow economic growth. Experience in Africa and Latin America suggests that fiscal and monetary prudence is Namibia's best option for stable prices, sustained economic growth, and a strong currency. - xxii - Table 4 Namibia: Central Government Financial Projections, Alternative Scenario (As percent of GDP) Item 1991/92 1992/93 1993/94 1994/95 1995/96 Total Revenues 35.2 34.3 34.0 33.2 32.5 of which: fishing licenses 3.2 2.E 2.8 2.7 2.8 Current Expenditures 32.0 31.2 30.7 29.5 28.5 of which: wages 16.3 15.8 15.3 14.7 14.0 Current Savirgs 3.2 3.1 3.3 3.7 4.0 Capital Expenditures 5.1 5.1 5.1 5.6 5.5 Financing Requirements 1.9 2.0 1.8 1.9 1.5 lxxix. Namibia begins its independent life lightly indebted. The challenge to the authorities will be to maintain the country's macroeconomic stability and creditworthiness while laying the basis for using resources more efficiently in the future. The world is replete with countries that have borrowed only to invest poorly or to sustain short-lived bonanzas. They are now undergoing painful adjustments. Namibia does not need to repeat these mistakes. At this time it would be risky for Namibia to seek commercial financing because a large proportion of the country's expenditures are for social projects and programs with long gestation periods and later pay-offs. The prudent course would be to seek concessionary funding over the next two to three years for programs in agriculture, health, education, sanitation, and housing in the more populous and poorest regions of the country. This would focus the Government's limited implementation capacity on high priority areas and prepare the ground for more active programs later. As Namibia's new administration consolidates its position and the data required to make better decisions become available, the authorities might consider financing public sector projects with non- concessional external loans. lxxx. In summary, Namibian begins its independent life with many advantages over countries with simila per capita income. Its excellent infrastructure, good macroeconomic policies, favorable climate for private enterprise, relatively open economy, and competitive private sector place it in an enviable position to meet a most formidable social challenge: alleviating relative and abosolute poverty. The authorities' best option for alleviating poverty is not to engage in a massive redistribution of income or assets, but to stimulate growth by supporting, ratnex than supplanting competitive markets and to invest in people, especially the poor. The authorities als' need to spend public funds more efficiently, especially those that affect the poor more directly-education, health care, and nutrition. Increased efficiency will require shifts in spending priorities (e.g., preventive over curative medicine, primary and secondary education over higher education) and better targeting of expenditures, among other things. At - xxiii - the same time, the authorities need to enhance income and employment opportunities for the poor by, first and foremost, "getting the prices right," but also by eliminating excessive regulation (e.g., in transport, in marketing of agricultural products, in urban street vending) and by building transport and marketing infrastructure in the North. Alleviating poverty will be neither easy nor quickly accomplished, but the only sustainable way to do it will be through labor-intensive economic growth. The World Bank will make poverty alleviation a main center of attention of its future work in Namibia. X. THE ECONOMY AND THE PEOPLE Orerview 1.1 Namibia is a country of sharp contrasts. From many points of view it is a prosperous middle-income country: its per capita income is nearly US$1,200; its physical infrastructure is comparable to that of a Western European country; its telecommunications system is one of the most efficient, and its public administration is highly devcloped. From o her points of view Namibia is a very poor country. The majority of the population has a per capita income of about US$85 per year and lives under primitive conditions without adequate housing, potable water, sewerage, health services, or education. Its ample territory--824,000 km', equivalent to Texas and Mississippi--hosts widely different climates and physical terrains: from lush-green tropical forests along the northern border with Angola, to desert-like landscapes in the south. Two major deserts flank the country, the Namib on the west and the Kalahari on the east, and over one-half of the territory is classified as either semi-arid or as desert. Population 1.2 Namibia is also one the most sparsely populated countries in the world, with only 1.7 million inhabitants in 1988. Texas and Mississippi, by comparison, have a combined population of about 16 million. But Namibia's population is growing fast. About 45,000 political emigres returned in 1989 and 1990 and the rate of population growth has been estimated at between 2.8 and 3.2 percent per year. 1.3 Most Namibians are also very young: about 45 percent are under 15 years of age. Approximately 88 percent of the population is black, 5 percent white and some 7 percent mixed or of other races. Nearly 60 percent lives in the three northern districts of Caprivi, Kavango, and Ovambo. Links with South Africa 1.4 For all practical purposes Namibia was run as a neglected fifth province of South Africa until independence in 1990. The official languages were English and Afrikaans, the South African rand was (and still is) legal tender, communication links led and still lead to and from the Republic of South Africa (RSA), Namibia's power grid is interconnected with that of the RSA, its main export market for agricultural exports was and still is the RSA and its main supplier of goods is still the RSA In addition, monetary policy was set by the RSA, interest rates were identical to those of the RSA, restrictions on capital movements were those of the RSA The main commercial banks in Namibia were branches of South African banks and other important financial institutions (e.g., insurance companies), had close ties to their South African counterparts. 1.5 Namibia was also a de facto member of the Southern Africa Customs Union (SACU). SACU membership implied that the movements of goods to and from the RSA took place as if the 2 - two territories were part of the same country. There were no customs duties levied and no customs authorities at the border to keep track of the movement of goods. RSA multinationals either have close ties to or own the firms that produce about one-third of Namibia's GDP and three-quarters of its exports--diamonds, uranium, and gold. Since independence, Namibia has formally joined SACU. 1.6 The legal, educational, and health systems were also either closely tied to or patterned after those of the RSA. The laws, for example, were those of the RSA. In fact, the laws in effect at the time of independence remain in effect until specifically repealed by an act o f Parliament. The curriculum in the schools as well as the requirements for graduation, matriculation, etc, were patterned after those of the RSA. The health system also closely mirrored that of the RSA. In fact, patients with special problems are still flown to RSA hospitals when Namibian hospitals cannot treat a specific problem. Transpon Infrastructure 1.7 Namibia has a well developed transportation network that includes an efficiently-managed railroad, an extensive well-maintained paved road network, and expanding air service that covers the entire country. In fact, Namibia leads all African countries (including the RSA) in road network density. Airport facilities include 28 licensed aerodromes, 16 with asphalt runways. 1.8 The Namibian railroad network covers 2,382 route kilometers. The main line runs from Nakop on the RSA border to Windhoek and from there to the port of Walvis Bay. Branch lines serve the port of Luderitz and the mining and ranching towns of Tsumeb, Grootfontein, and Outjo. The railroad is amnong the best run in Africa. 1.9 The two major ports are Walvis Bay and Luderitz. The former, claimed by the RSA as its own territory, handles most of Namibia's maritime cargo. Walvis Bay has among the shortest turnaround times for unloading and roll-on/roll-off operations in Africa and has good rail and road access. It is currently working at only 28 percent capacity, however. 1.10 Luderitz, about 400 kms south of Walvis Bay and run by TransNamib, is a small and well- managed port. Luderitz serves main'y two rock lobster fishing companies as well as off-shore diamond exploration and gas fields. The facilities, coupled with the shallow water depth at the port, are adequate for handling small coastal ships, but not for handling large vessels. No facilities exist for handling bulk cargoes, large shipments, or liquid products. GDP and Per Capita GDP 1.11 Officially recorded GDP was estimated at the equivalent of US$1,895 million in 1988, or US$1,142 per capita. This estimate, however, does not include traditional (subsistence) agriculture or the informal (urban-rural) sector. Unofficial estimates place value added in traditional economic activities (not included in the official GDP estimates) at the equivalent of R175 million, or US$77.4 million. Recorded GDP and traditional economic activities add up to US$1,972 million or, on per capita basis, US$1,188. This relatively high per capita income conceals an extremely dualistic society with sharp differences in economic conditions and living standards. 1.12 Effectively, there arc two Namibias: one modcrn, one traditio'nal. A third group--blacks in formal-sector wage cmployment--hridges the two, but its income is closcr to that of the traditional sector than to that enjoyed by the white population. Modern (market oriented) economic activities employ approximately 45 percent of the populaLion, which could be split further into white (5 percentj and black (40 percent). The modern "white" sector of the economv has per capita income of about US$16,500 er year while the blacks in the modern sector earn only UJS$750 per capita and the subsistence sector has a per capita income of only about US$85 per year. The roughly 5 percent of Namihia's population that is white accounts for over 70 percent of GDP, as Table 1.1 shows. Apartheid policies led to the present situation, where whites occupy most positions of responsibility, own a disproportionately large share of physical assets, and receive a disproportionate share of the country's income. Table 1.1 Namibia: Incomes of Major Segments of the Economy--1988 Share Share Annual per of of Capita GDP Population GDP (Percent) (Percent) (US$) Subsistence Sector 3.4 54.8 85 (blacks) Modern Sector 97.6 45.1 2,531 (blacks) 25.4 40.0 750 (whites) 72.2 5.1 16,504 Source: UNDP, "Population and National Accounts of Namibia, 1990" and The Department of Finance, "Statistical/Economic Review," SWA/Namibia 1989; mission estimates. Sectoral Contributions to GDP Mining 1.13 Mining is by far the most important productive sector of the Namibian economy. On average, over the past 10 years it has accounted for: - 4 - * 31 percent of the Gross Domestic Product; * 18 percent of thc Gross Domestic Fixed Investment, 6 18 percent of the Cash Remuneration paid to Employees; * 76 percent of the Export Earnings; and * 38 percent of the Tax Revenues (last cight years). Although mining employs only about 5 percent of the formally employed labor force, it accounts for nearly 13 percent of wage remuneration, suggesting that it is a complex capital-intensive sector requiring highly skilled labor. Diamonds, uranium, and mctals (copper, lead and zinc) contribute more than 95 percent of the valuc of mineral production whilc industrial minerals and semi-precious stones make up the rest. 1.14 Large-scale operations. Eight foreign-owned companies account for 98 percent of the sector's production value. Two of the 40 mines currently operating in Namibia employ more than 2,000 people and generate a gross annual revenue of more than R500 million each. Another six mines account for more than 200 employees and generate a gross annual revenue above R10 million. With the exception of Rossing Uranium in which the Government holds a small share, these operations are owned oy major foreign mining companies. 1.15 Two of the Namibian mining companies are significant by world standards, Consolidated Diamond Mines (CDM) and Rossing Uranium, which account for 75 percent of the production value of the mining sector. CDM ranks sixth in production volume of near-gem and gem diamonds worldwide. Rossing ranks fifth in western world uranium production, with a share of 9.5 percent of world output. The other six large operations are all metal mines of which four are base metal mines. 1.16 Medium and small-scale operations. The mid-sized category includes three operations with a labor force of more than 100 employees. The small-scale category comprises some 30 mines, each employing a work force of between five and 75 people. With the exception of one copper mine, one gold-silver mine and two tin mines, small-scale operations extract non-metallic minerals. Four of these operations produce diamonds, the others mine a variety of industrial minerals and semi-precious stones. 1.17 Informal artisanal mining has been active in Namibia for many years. It encompasses local individuals extracting comparatively high-value minerals from surface or near surface mineralizations. An estimated 750 individuals are engaged in tin ore extraction, for instance. Ore is recovered from shallow pits by a unique method of dry hand panning developed because of the shortage of water. In addition, several hundred individuals mine semi-precious stones throughout Namibia. - 5 - Table 1.2 Namibia: Sectoral Contribution to GDP at Factor Cost, 1980-89 (Percentages) 1980 1984 1989 Agriculture and fishing 11.5 8.0 10.7 Mining and quarrying 43.6 35.9 31.6 Manufacturing 3.9 4.6 4.7 Electricity and water 1.8 2.3 2.5 Construction 3.5 2.8 2.2 Wholesale and retail trade 11.5 12.3 12.7 Transport and communication 5.3 5.8 6.3 Finance, insurance, real estate and business services 5.3 5.9 6.0 Community, social & personal services 1.3 1.9 1.9 General Government 9.6 17.5 18.2 Other 2.6 3.0 3.1 GDP at factor cost 100.0 100.0 100.0 Source: Statistical Appendix, Table 1.02 Agriculture 1.18 Agriculture is the largest employer, supporting either directly or indirectly some 70 percent of the population, and the second most important sector in terms of cont ibution to exports, with a 12 percent share. Extensive stock farming is the dominant agricultural a.tivity, accounting for 65 percent of the sector's gross value of output, and beef is its major product. Up to 90 percent of the total annual beef output of 77,000 tons is exported, mostly to the RSA. Until recently, karakul pelts were the second most important agricultural product. 1.19 Only about half (444,000 km2) of the country's land area is suitable for farmland. Moreover, low rainfall and high evaporation limit dryland arable farming to a much smaller area in the north. In 1964 the Odendaal Commission designated some 35 million hectares as 10 "homelands" for blacks and 34.97 million hectares as commercial land for whites. A veterinary cordon fence dividing the northern rangeland from the rest of the country, was originally erected to control the southward movement of potentially infected animals, but it has become symbolic of the rift between the neglected communal sub-sector in the north and the privileged, commercial farmers to the south. 1.20 Commercial agriculture consists o; farms operated by individuals and agricultural enterprises with title to the land. Communal agriculture consists of farms operated by family units oi land to which they have user rights but no title. It is mainly subsistence agriculture. Commercial -6 - agriculture contributed 8.3 percent of GDP in 1990 and employed 34,400 people (or about 19 percent of total formal employment), while communal agriculture employs about 250,000-300,000 people, more than half of the economically-active population. Subsistence agriculture contributes about 1.7 percent to GDP and takes place mainly in the north (Ovambo, Kavango, and Caprivi) while land- extensive and capital-and management-intensive technology characterizes the commercial agriculture i, the south. 1.21 Water availability and vegetation determine the patterns of stock ranching. Cattle farming predominates in the northern districts where water is morc available. In the southern districts, only small stock, sheep (especially karakul), and goats can be raised due to the harsh condition and lack of water. The central regions have an intermediate climate that permits mixed cattle and small stock farming. In 1986 about 2,521 farming units with 18.0 million hectares of land were under the cattle farming system in the north and central regions. About 1,200 commercial units produce karakul and other smallstock on 15.3 million hectares in southern areas. A few large commercial farms in better endowed areas engage in crop production, especially maize, wheat, and sunflowers. Fisheries 1.22 Namibia's fisheiies sector contributed 2 percent to GDP in 1988 and employed 1,700 persons, or 0.9 percent of total formal employment. Such low contributions to GDP and employment might appear paradoxical, considering that the Namibian Sea is well known as one of the largest and most productive coasLal fishing grounds in the world. Before independence, Namibia's uncertain status (not an independent country but not a province of the RSA either), meant that fishing vessels from many developed countries fished almost freely in these waters, while Namibians derived virtually no benefits. The RSA's claim in 1977 to a twelve mile territorial sea and a 200-mile exclusive fishing zone off the coast of South Africa, including Walvis Bay, was not accepted by the international community. As a result, until Namibian independence, the waters beyond the six mile zone were one of the few fishing areas in the world that lackied a recognized management authority. After independence, the Government proclaimed a 200 mile exclusive economic zone and prohibited all fishing. It is estimated that, properly managed, the Benguela Current could yield a sustainable annual production of 3 million metric tons (approximately half in Namibian waters). ICSEAF member countries have reported that in 1986-88 the mean total annual catch was close to 1.2 million tons. Industry 1.23 Manufacturing industries contributed 4.3 percent to Namibia's GDP in 1988 and employed about 9,200 people, or 5.1 percent of total formal employment (Table 1.3). Manufacturing activities in Namibia are not highly developed. The sector consists essentially of food, beverages, and tobacco (i.e., breweries, soft-drink bottling plants, slaughter houses, and a few bakeries), some furniture factories, and a few metal processing shops. If the fish processing facilities in Walvis Bay were included, the size of the sector would more than double (the Walvis Bay processing facilities are still within the RSA enclave, although many of the workers are Namibian). By and large, these industrial sub-sectors are closelv related to the primary sectors. -7 - 1.24 Slaughterhouses and bakeries account for 53 enterprises and some 2,000 workers, equivalent to about one-fifth of the manufacturing enterprises and 22-23 percent of employment. The manufacturing sector is heavily concentrated in Windhoek and its surroundings. With the possible exception of the food, textile, and wood industries, Namibia's manufacturing consists mostly of small enterprises producing goods for local consumption. Table 1.3 Namibia: Enterprises and Employment in Manufacturing by Subsector (Percentages) Firms Employment Food, Beverages & Tobacco 9.0 51.1 Textiles, Clothing & Leather 8.1 4.2 Wood and Furniture 16.2 7.3 Paper, Printing, Publishing 5.0 4.9 Chemical Products 4.2 3.6 Non-metal Mineral Products 7.3 11.9 Metal Products 12.7 12.3 Other 7.7 1.4 Repair Services 9.7 3.2 Total 100.0 100.0 Number 259 9,176 Source: Statistical Appendix Table VII.04 The People: Poverty Profile Population Overview 1.25 Namibia's population is approximately 70 percent rural. About half of all Namibians live in the northern communal areas, and of those about four-fifths are engaged in crop and stock farming. The southern and central communal areas account tor roughly 15 percent of the population. The residents of Hereroland, Bushmanland, and Damaraland are predominantly rural pastoralists, while those of Namaland and Rehoboth tend to be engaged in stock agriculture and increasingly in wage employment. Almost two-thirds of Namibia's urban population lives in Windhoek and in the urban and peri-urban areas of Oshakati-Ondangwa. - 8 - 1.26 The prevalence of an extended family structure links the economies of communal and commercial areas through migration and income remittance. As a consequence of migration, rurai households largely comprise older people and children, while urban/peri-urban migrant communities include more working-age adults.1/ Migration also results in a high incidence of female-headed households: 45 percent in rural Ovambo, 40 percent in peri-urban Ovambo, 36 percent in Katutura, and between 20 and 57 percent in other townships. How Serious is the Poverty Problem? 1.27 Poverty is both a relative and an absolute phenomenon. A particular group in a society may be relatively poor because its income, or standard of living, is lower than that of some other group. Or a group may be absolutely poor because its standard of living is below a given threshold or "poverty line." Namibia confronts both kinds of poverty: extrerne degrees of income inequality and widespread absolute poverty. As stated before, the wealthiest 5 percent of Namibians control more than 70 percent of GDP, while the poorest 55 percent control only 3 percent. A conservative estimate of absolute poverty, based on an urban poverty line and rural vulnerability to food insecurity,2/ suggests that at least two-thirds of the population are absolutely poor and that as many as three-quarters of all blacks are poor.3/ 1.28 These estimates, as well as all others in this section, must be taken as merely indicative because the data available in Namibia do not permit a rigorous poverty profile. Es.imates are based on various partial surveys, proxies, and qualitative information; they should be regarded as rough approximations. For the urban populations, where some income data are available and a poverty line is already in use, an income poverty line is used as the definition of poverty. For the rural areas, where no consistent income measures are available, UN-sponsored estimates of the extent of household food insecurity and vulnerability to drought are used as a measure of poverty. These estimates are supplemented with direct income data, where available. Wno are the Poor? 1.29 About three-fourths of Namibia's poor live in the rural areas and depend on (usually low- productivity) subsistence agriculture, cash transfers, and wage employment on commercial farms for their income. The farms employ about 36,000 laborers. The remaini:ug one-quarter of Namibia's poor live in peri-urban households and depend either on wage earnings or self-employment in small business, or are unemployed. The number of urban poor seems to be growing, along with unemployment and under-employment. 1/ The share of household members between the ages of 15-54 is 64 percent greater in Katutura than in rural Ovamboland, whereas the share of household members under 15 and over 54 is 60 percent greater in rural Ovamboland. This pattern is repeated in the southern commnunal areas, where one third of a sample of rural Nama children were looked after by their grandmothers. 2/ See Annex I for an explanation of how absolute poverty was measured. 3/ Estimates of the incidence of urban black poverty alone, for example, range up from a conservative minimum of two thirds to three fourths in the smaller u±rban areas. -9 - 1.30 Women head approximately 40 percent of households and households headed by women appear to be among the poorest of the poor. In urban areas, the incomes of female-headed households are substantially below those of male-headed households, while in rural areas women's lesser access to productive inputs and the absence of male labor places an additional burden on the time and health of women and children. 1.31 A typical poor family lives in a rural area and is headed by a woman who is responsible for farming the family plot and whose husband (and perhaps another relative) works in a city. The family ekes out a living growing millet (or other crops) and raising a few head of cattle or goats. The sons tend the animals, often walking hours daily to watering holes, while the daughters fetch household water from a distant source. These tasks can take three to eight hours, and they compete directly with school attendance. Total cash income (primarily from pensions or remittances from relatives) may amount to some R130 per month with which, in addition to farm production, the household supports four school-age children, one youth, and two adults. Sources of Income and Income Distribution 1.32 The income of the rural Ovambo family comes primarily from farming activities and cash remittances from migrant relatives working in the cities, in the mines, in the RSA, etc., but income from self employment and pensions also plays a significant role. Very few rural workers are engaged in wage employment. In the city the typical Katutura household earns income primarily from wage employment, while in the Ovambo peri-urban areas self-employment and farm income are the primary sources of income (see Table 1.4). Table 1.4 Namibia: Percent of Households Receiving Income from Selected Sources, 1990 Gov't Non-Gov't Self Family Remit- Food job job empl. farm tances Pensions aid v Katutura 53.6 38.7 14.7 1.0 9.8 8.2 9.6 Peri-Urban Ovambo 18.4 25.1 47.2 34.4 24.1 10.7 11.7 Rural Ovambo 22.3 12.3 30.1 80.3 54.5 30.4 17.7 a/ Food aid was distributed to returnees under the resettlement scheme. Source: UNICEF, HHNS 1990 1.33 Not all the poor are equally poor. In general, those in the city are substantially better off than those in peri-urban areas, who are in turn better off than rural families. Average cash income in urban Katutura is roughly twice that of peri-urban Ovamboland, and five times the average income - 10- in rural Ovamboland, as Table 1.5 shows.4] Surveys of black townships during the mid-1980s found average income comparable in real terms to income in the peri-urban north. Average income in female-headed households in the townships averaged half that of male-headed households. Table 1.5 Namibia: Household Cash Incomes by Area (1990 Rand/month) (for all in sample and by quintile) All Q1 Q2 Q3 Q4 Q5 Katutura 618 107 252 470 832 1,460 Peri-urban Ovambo 361 39 104 218 441 986 Rural Ovambo' 129 8 27 70 124 425 Black Townships 261-658 Rural South 100-200 Agricultural Laborers 100-350 a/ Does not include own consumption Source: UNICEF (HHNS, Preliminary Situation Analysis, and Food Security Workshop), NBIC, 1990 1.34 Income disparities within each area are greatest for rural Ovamboland and least for Katutura (see Table 1.6). If asset holdings are included, actual income disparities may be even greater in the rural north since low income appears to correlate with small landholdings and low lives!ock ownership. But income is more equally distributed within these three areas than across the country as a whole. This means that geography alone is not enough to identify the poor. Additional characteristics, such as social indicators, need to be taken into account for targeting assistance. 4/ lhis differential fails to take own consumption into account, presumably a significant factor in rural areas, but not estimated to be significant enough to change income rankings. It should be noted that many peri-urban households also have access to rural aetended family production. Further, this diffemential is not adjusted for higher urban household expenses, such as housing, transport, clothing and food, the consumption pattems of which may be affected by white urban preferences. Table 1.6 Namibia: Income Distribution Shares Lowest 40% Highest 20% Katutura 12.8 46.2 Peri-Urban Ovambo 5.8 65.9 Rural Ovambo 4.7 67.4 Total Sample 4.5 65.2 Source: UNICEF, HHNS, 1990 Social lndicators 1.35 Living conditions in Namibia reflect the wide income differences among various segments of Namibian society. The quantity and quality of social services available to each ethnic group similarly parallel the sharp disparities in income. Before independence, the Administration for Whites enjoyed per capita revenue and expenditures substantially higher than the 10 other Second Tier Authorities, for example. The following Paragraphs examine critical indicators and the causes underlying the living conditions of the poor. Box No.1.1: How the Poor Live-Infant Mortality in Namibia Selected surveys conducted over the past few years suggest that the infant mortality rate is between 50 and 100, that prevalence of undernutrition in children is between 30 and 40 percent. and that the completed immunization level is about 40 percent. This means that one out of 20 children born in 1990 will be dead by his/her first birthday and that one out of 10 wil be dead before the age of five. As you read this now, one out of 10 children in the north is starving. Throughout the country, one out of three goes hungry for enough of his/her childhood to stunt their growh. Although this situation is similar to that of other African countries, it is an unnecesary and avoidable tragedy, especially in view of the country's high income level and qualty of facilities - 12 - Health 1.36 Although Namibia boasts an average per capita income of $1,200, health indicators for most of the black population resemble those for Sub-Saharan African countries with much lower per capita income (see Table 1.7). Health indicators are low because of widespread poverty and the healtn care system's bias against preventive care and minimal orientation toward community-based health delivery. Table 1.7 Namibia: Selected Health Indicators, Namibia and Other SSA Countries Namibia Botswana Kenya Zambia Zimbabwe Tanzania Malawi Total FerL. Rate 6+ 5.1 6.9 6.7 5.3 6.7 7.6 Infant Mort. Rate 65 41 70 78 49 104 149 Mod Child Undemutritionv 23.3 15.0 na 19.7 11.5 na 23.9 Maternal Mortality 371 300 51021 110 15(P 370a 250 11 Moderate child undernutrition refers to the percent of children between 6 and 60 months between minus two and minus three standard deviations from median weight for age; Maternal mortality is measured per 100,000 live births). 2/ Data refer to mortality in hospitals and other medical institutions only. Source: UNICEF, HINS, 1990; WDR 1990. Education 1.37 Internationally comparable estimates of educational attainment and enrollment rates are not available for Namibia, but other data reflect a history of significant ethnic-based differences in educational access and in school quality. 1.38 Each Second-Tier Authority, through its Directorate of Education and Culture, was expected to provide 12 years of schooling, train primary school teachers, and build and run schools, training colleges, hostels, and other education-related institutions. The resulting distribution of qualified teachers was biased strongly toward the Administration for Whites, 70 percent of whose teaching force is considered "qualified." By contrast, the ratios for other ethnic groups ranged from 23 percent for the Tswanas to 2 percent for the Caprivians and Hereros, respectively. 1.39 Rough estimates of access to school suggest wide variation across different regions of Namibia. About 70 percent of school-aged children (ages 5-19) are estimated to be in school, most of them in the primary grades. The national average of 70 percent enrollment decomposes to show access ratios that are relatively balanced at the primary level but that fall off sharply by the junior and senior secondary level. While there were roughly 251 potential students per primary school in - 13 - Ondangwa, there were 480 in Windhoek. By the secondary school age cohort, however, there were 2,400 potential students per school in Ondangwa, as compared with 619 in Windhoek. This suggests that access to very basic primary education in Namibia may be widespread, but that access to secondary or higher education is limited for most Namibians. 1.40 Moreover, conditions are highly variable. DEA 1989 statistics indicate that the average class size under the former white authority was fewer than 13, with at least 92 percent of teachers fully qualified. This compares with an average class size in Ovamboland of 37, with only 2 percent of teachers qualified. That is, more than half the students attend schools with about 40 students per class, and they have only one chance in 50 of being taught by a qualified teacher. 1.41 Expenditures per student at the primary and secondary level also reflect this inequitable treatment. In the Administration for Whites, expenditure per student in 1986/87 was R3,213, which contrasted sharply with expenditure per student for the Ovambos--R329. The Tswanas ranked second, with expenditures of R1,648 per student. 1.42 Educational attainment among household heads is generally low. Adult illiteracy is estimated at 60 percent. Households surveyed by UNICEF in rural Ovamboland report that more than one-third have had no schooling, and another two-fifths have had only one to four years of schooling. Only 6 percent of households renorted eight or more years of schooling. In the peri- urban areas of Ovamboland, the picture is only slightly better: 27 percent with no schooling, one- third with one to four years, and 15 percent with eight or more years. In Katutura, educational attainm=nt among households is significantly higher. Only 17 percent report no schooling, while one- fourth report one to four years, another one-fourth report four to eight years, and a full third report eight or more years. Male heads of household had consistently higher educational attainment. 1.43 These figures suggest that although the Namibian education system delivers a first-class education to a small proportion of the population, the vast majority receive an education that suits them only for unskilled employment. The opportunity to gain skills to enter the labor market at a higher skill level remains the province of the few. Water and Sanitation 1.44 Water and sanitation indicators vary widely by region. Virtually all dwellings in Katutura have access to water and have a toilet inside or outside the house. In the peri-urban areas of Ovamboland, four-fifths of households have access to water (usually a standpipe near the dwelling), but about two-thirds do not have toilets. Of those that do, nearly all have pit latrines. In rural Ovamboland, only half the dwellings have water, and more than 95 percent lack toilets. Distance to water in the dry season also varies considerably for rural households--for example, from one to three hours in rural Ovamboland. The UNICEF survey found that female-headed households are 20 ^ 14 - minutes farther away from water sources in the dry season.5/ Poor access to water and sanitation for both rural and peri-urban populations continues to pose a severe threat to family health, and particularly child survival. Housing 1.45 Ownership and quality of housing stock also vary widely in Namibia. While ownership or rent-free accommodation is almost universal in rural and peri-urban Ovamboland, previous restrictions on black ownership in the formally regulated urban areas has resulted in only 30 percent housing ownership in Katutura.i/ This low rate is probably representative of the other black townships in the south. During the 1980s, most urban housing (rental) was the responsibility of the municipality and the NBIC. 1.46 The supply of urban housing stock on legal, serviced lots in Namibia totals 53,000 dwellings, of which 20,000, or 38 percent, house the white population. The condition of these dwellings, in terms of floor space per capita and quality of construction, finishes, and services, is excellent by any standard. The remaining 33,000 dwellings accommodate 78,000 black households--an average of more than 2.3 households per 2-3 room dwelling. About two-fifths of this housing is public, unfinished housing stock. Other public housing structures include one-room core houses constructed in clusters of four to relocate illegal squatters. These houses are built to minimal standards, providing only unfinished structures and no electricity. Some older municipal structures include singles' quarters, originally designed to house migrant laborers on their own. They now house entire families, with as many as 10 or more people per room. In the UNICEF HHNS sample of Katutura, rents per income quintile range from an average of R92 per month for those in the lowest income quintile to R255 for those in the highest quintile, with an average of R160 per month. 1.47 Recent rural-urban rmigration has increased the demand for housing, with the result that an estimated 180,000 squatters live on the edge of urban areas, primarily in Windhoek, Oshakaui, Ondangwa, and Rundu. These squatters live in make-shift huts, mostly of corrugated tin, with no services. 1.48 The UNICEF sample survey of households in Katutura, peri-urban Ovamboland, and rural Ovamboland found that 93 percent of dwellings in Katutura had metal roofs, compared with only 74 percent in the peri-urban north and less than 9 percent in rural Ovamboland. The variance in access to electricity is even greater. While 80 percent of Katutura's surveyed dwellings had electricity, the rate falls to only 5 percent for peri-urban Ovambo and 2 percent for rural Ovambo dwellings. S/ The reasons for this finding seem to be related to custom. There is some evidence to suggest that village elders give female-headed households inferior pieces of land, or move them to lesser plots once the man leaves. The insecurity of tenure reduces incentives for women to invest in improving land, say digging a weUi. Also, female headed households may lack the family labor to dig a well and maintain it. In some cases, investments in land improvements are tasks that migrant males get done when they return. 6/ Five percent own their house free and clear. Another 25 percent of homes are under mortgage, while 70 percent pay rent. - 15- 1.49 Although a clear and large gap ij housing quality separates white and black urban neighborhoods, there is also an important, albeit smaller, diffe -ential between housing stock in Katutura and in the communal areas of the north. As with the observed differentials in income and employment, the far better access to water and sanitation, as well as to housing and services, in Katutura relative to other areas of Namibia, suggests a continued incentive to migrate, even considering the higher costs of accommodation. Vulnerable Groups 1.50 Some of the poor deserve special attention because they are particularly vulnerable to changes in factors beyond their control. For example, although the northern communal areas-- Ovambo, Kavango and Caprivi--have the highest agricultural potential, supporting both crops and livestock, and therefore the greatest potential for generating income from subsistence agriculture, the relatively high population density (58 percent of all Namibians live there) and high population growth strains the capacity of the land. And there are few safety nets. 'he following paragraphs uttempt to identify the sources of vulnerability for the main groups of the poor in Namibia. The information available is inadequate to rank these groups by degree of vulnerability. 1.51 The vulnerability of rural Ovahlbo households derives primarily from land degradation and the scarcity of water. Females are heads of 45 percent of households, which indicates a high dependency ratio and/or labor scarcity. Also, since women must walk long distances to collect water and fuel, their health and their time for housework, child care, and farming become even more strained. These female-headed households do not rely solely ot agricultural income, however, because they often receive extra income from cash transfers. 1.52 The economies of Kavango and Capnivi demonstrate higher agricultural potential than Ovambo but are less linked to the rest of the country through migration and income transfers and are more limited in the extent of local wage or self-employment. Their households, therefore, are more vulnerable to drought or agricultural failure than Ovambo households, as demonstrated during the Caprivi crop failure of 1989-90. 1.53 Income in the rural southern communal areas, though comparable to income in rural Ovambo, may reflect greater household vulnerability because of the sources of this income. UNICEF estimates that transfers and pensions are the most important household income sources, with livestock farming of lesser importance in the drought-afflicted areas around Namaland. Household access to land and water eroded during past administrations. As a result, agriculture is no longer economically viable for many in the communal areas. Transfers are unstable: the loss of an elderly pensioner can deprive the household of a primary source of income. High unemployment rates, as well as the tendency (also observed in other countries) for remittances from family members to become less reliable, undermine the security of wage remittances as a primary source of income--a 1986 survey of rural Namaland and Katutura found that 25 percent of households depended entirely on the mother's earnings. - 16 - 1.54 Vulnerable groups also exist in the other communal areas. The eastern and western communal areas, including Hereroland, Damaraland, Bushmanland, and Kaokoland, are sparsely populated and have minimal water resources. Most households are stock farmers. Households in Hereroland and Damaraland subsist through the sale of their stock at the main southern auctions. The vulnerability of these groups to destitution through loss or distress sales of li .1Lock has increased during the last decade of drought. Having lost their livestock, these households tend to migrate, assetless, to the urban areas, adding further pressure to unskilled labor markets. 1.55 The population of Knokoland also depends on stock farming; at present it is suffering from drought. Cut off from the subsidized southern markets by the veterinary cordon, these households must rely on the Oshakati abattoir, which buys all classes of meat at cannery prices, or on the informal Ovambo market in competition with an expanding supply of Angolan stock. Much of the population of Bushmanland, traditionally a hunter-gatherer community, was employed by the South African armed forces--for 15 years almost 85 percent of the area's population depended on army wages. Most of these people have lost their traditional bush skills and are left without income or employment prospects. 1.56 Agricultural laborers on commercialfarms depend on wages and in-kind transfers. While very little information is available about living conditions on the commercial farms, wages are low and job security is also low; during the first half of the 1980s, labor declined 20 percent on commercial farms, apparently due to drought-related de-stocking, labor-saving measures such as fencing and mechanization, and uncertainties about future labor codes. 1.57 Peni-urban households throughout Namibia live precariously. Their income is low and their jobs insecure. Many earn a living from activities with low value added and limited growth prospects, most typically informal retail trading 1.58 Women and children in female-headed households all over Namibia are particularly vulnerable to poverty. While women represent close to half, if not more, of subsistence farmers, they are the most disadvantaged in their access to farm inputs and the right to make investment decisions. Without title to the land, they have virtually no access to credit. In towns, female-headed households report income as much as 50 percent below that of male-headed households. In urban and rural areas, children in households headed by women show a higher incidence of malnutrition. 1.59 Retumees. Roughly 45,000 exiled Namibians were repatriated in 1989-90. These exiles returned to their home areas, to families (if they still had any), or to church camps and other temporary shelters. While UN assistance packages of seeds, farm implem.ents, and food eased the exiles' return, reentry has proven difficult. Most returnees remain unemployed, others are in rural areas with little prospect of employing the skills they learned in exile and no cash to finance travel to urban areas in search of work. In other cases, skills acquired in the East bloc or in various other countries are not recognized, and skilled employment is refused. This is an important group, however, not only for their numbers but also for their political visibility--they are the people who left Namibia to fight for independence and now find themselves sigrnificantly disadvantaged. - 17 - 1.60 The disabled are another important group among the vulretrable. After two large polio outbreaks and years of war--with land mines often used--the share of the disabled in the population is thought to be high. - 18 - I. RECENT ECONOMIC DEVELOPMENTS Mlacroeconomic and Sectoral Trends Overall Economic Growth 2.1 Real GDP has barely grown since the 1970s, after growing 9 percent annually during the 1960s. GDP at factor cost declined steadily during the first six years of the 1980s and reached a 20- year low in 1985. Since then, the econo:ny has grown slowly and, although real GDP at factor cost in 1989 was one percent higher than at the beginning of the decade, per capita GPD fell about 21 percent during the 1980s. The slow growth of GDP was not due to a single cause, but mining (Namibia's most important sector and its perennial engine of growth) had an abysmal performance during the 1980s. Save for 1986 and 1988, mining output fell every year of the decade. By 1989 its output was some 27 percent lower than in 1980. Agriculture, another important sector, suffered a severe drought that lasted from 1982 to 1984. In these three years, agricultural output fell 43 percent and, despite a 28 percent increase in 1937, agricultural output in 1989 was some 6 percent lower than in 1980. The only dynamic sector during the 1980s was the Government. Propped by budget transfers from the RSA and by increasing domestic taxation, the public sector grew every single year of the decade, sometimes at astounding rates--16 percent in 1981, 32 percent in 1982, and 19 percent in 1983. In general, an expansion ef Government simply means that either public sector employment or public sector wages grow. In Namibia's case it was both, as discussed later in the chapter. 2.2 The economy began to grow in 1986 owing to the mining sector's strong performance in that year. The growth of 1987 was in large measure due to the 28 percent growth of agricultural production. In 1989, the presence of the UNTAG forces gave a strong push to demand and, save for mining, every sector expanded, with manufacturing leading the way. Nevertheless, because of the decline in the mining sector, overall GDP growth was only 0.2 percent. Figure 2.1 depicts the performance of the Namibian economy during the past decade and the following paragraphs explore in depth the performance of its two principal sectors, mining and agriculture. Mining 2.3 The dismal performance of the mining sector was the result of two factors: the depletion of high-grade diamond deposits--.vhich affected the production of diamonds--and the imposition of economic sanctions against the iRSA--which affected the demand for uranium (see Table 2.1). As a result of diamond depletion, the average carat content of ore fell from 13 to 5 carats per 100 tons. Consequently, overall carat production fell by 40 percent, from 1.6 million in 1980 to 0.9 million in 1990. Meanwhile, uranium production had to be cut back about 20 percent between 1980 and 1990 as a result of sanctions. - 19 - Figure 2.1 Namibia: Growth Rates of GDP at Market Prices, 1980.1989 0.08 0.06 - 0* 90 11981 192 1983 1984 1985 1986 1987 1988 1989 .0.02 .0.04 *0.06 - 20 - 2.4 Sanctions, political uncertainty, and depressed mineral prices also affected people's willingness to invest. At 1980 prices, investment in mining dropped from RI 12.4 million in 1980 to R70.6 million in 1989--during 1982-1986, investment in the sector was only R15 to R40 million a year. The 1988/1989 turnaround was caused by an improvement in the prices for minerals/metals. However, new investment went primarily to sustain existing capacity and only to a lesser extent for expansion. 2.5 Employment in the mining sector declined from about 19.8 thousand in 1980 to 12.8 thousand in 1989, equivalent to 3 percent of the total labor force. Mining's share of the total cash remuneration to employees (at current prices) declined from 17.8 percent to 12.8 percent over the 1980-1989 period. This decline in employment and share was gradual, with a small improvement in remuneration during 1987-1989 from a 10.5 percent to a 12.8 percent share in total remuneration. Improved efficiency, through the use of advanced technology, is the principal reason for the decline in employment, subsequently resulting in higher labor productivity. The fact that 3 percent of the labor force receives 12.8 percent of total cash remuneration shows that mining wages and salaries are well above average. Table 2.1" Namibia: Uranium and Diamond Production, 1980-1989 Year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 Index of Uranium 100 98.5 93.6 92.1 91.7 83.8 86.0 83.8 87.0 76.2 79.5 Production (1980=100) Diamonds Grade (Carat/lOOT) 9.3 10 10.1 10 12.3 11.1 8.3 7.6 5.8 5.2 5.5 Production (x 1000 carats) 1560 1250 1020 970 930 940 1010 1020 940 880 780 'Figures on uranium production are not official, but derived from vanow publicly available publications. 2.6 Mining's share of total exports fluctuated between 69.4 percent (1981) and 82.5 percent (1986). In current terms, mining exports increased from R908 million in 1980 to R2,026 million in 1989. Almost all mining products are exported to Westerr Europe, North America, Japan, and South Africa. Namibia is regarded as a reliable supplier of diamonds, uranium, and base metals in the world minerals' markets. 2.7 The mining sector's contribution to tax revenue fluctuated between a 26 percent share and 47 percent share of Namibia's total tax income during the 1983-1989 period. These figures represent the Corporate Tax as direct tax and the Diamond Export Duty as an indirect tax. - 21 - Additional tax revenues derive from the mining secor through a general sales tax, a non-resident shareholders' tax. and fuel levies. Hence, over the last eight years, the mining industry generated 36 percent to 57 percent of total tax revenue annually. Because tax revenue is based not only on the operating income generated by the mining companies but also on their capital investment programs-- since capital expenditures can be deducted against the operating income--it is difficult to assess the figures for a trend. 2.8 In addition to its economic contribution, mining gives a major impetus to the regional and infrastructural development of Namibia. It is estimated that the mining sector uses 35 percent of Namibia's railway services and requires approximately 50 percent of Namibia's total power capacity. Agriculture 2.9 Until 1985 Namibian agriculture was characterized by the privileged access of a small minority to a large share of the nation's resources. The growth of large-scale agriculture, mainly for whites, was encouraged by subsidized credit for land purchases. Although interest rates were raised to 5 percent in 1980 and, in steps, to 10 percent in 1984, they were still below both market rates (13 to 18 percent) and inflation. Communal farmers were not explicitly excluded, but they were not considered bankable by either the Landbank or the commercial banks, for lack of collateral. 2.10 The growth of white-owned large-scale agriculture was further encouraged by the distribution of public investment in markets and transport infrastructure. South Africa guaranteed a market for Namibian beef, and the South African Meat Board defended Namibian producer floor prices (and still does). In due course, Namibian quasi-public institutions were created that reflected the congruence of state and white-farmer interests: marketing parastatals for meat, cereals, and karakul pelts. Their primary objectives were (and essentially still are) to promote and support white farmers and ensure integration with the protected RSA agricultural markets. The veterinary cordon served to emphasize the division between communal and commercial agriculture. Discriminatory access to land, markets and infrastructure, and selective support, were probably as important as subsidized credit in setting commercial farmers apart from communal farmers in terms of productivity and income. 2.11 The results of these policies constitute the legacy inherited by the new Government. The 6,337 large farms owned by 4,450 farmers account for 32.3 million hectares (73 percent of Namibia's farmlands). More than 100,000 communal farmers tend 12.1 million hectares (27 percent of total farmland). The average size of white-owned farms is 7,836 hectares, 23 times the average size of African-owned cattle farms. A large but unknown number of African-owned arable farms also exist. Their size can only be guessed--very likely less than 20 hectares on average--until recently their production was not included in any national statistics. There are no marketing channels for cereals produced by African cultivators. 2.12 In 1985, large-scale commercial farms employed about 40,000 workers at low wages. About six people were dependent on each farm worker. Based on the same dependency ratio, 100,000 African farms extended over 12.1 million hectares would sustain more than twice the number of people on one-third of the area. - 22 - 2.13 Between 1980 and 1985, bad weather plagued the sector. Output fell fo-; three consecutive years (1982 to 1984), overall 43 percent. Farm workers were laid off, and some farmers went bankrupt, while wealthier farmers bought additional land for vwhich low-interest credit was available, thus exacerbating land concentration. 2.14 By 1985, inequity and inequality were creating mounting political pressure. African and Colored farmers gained access to land abandoned by white farmers, and their access to livestock markets south of the veterinary cordon improved. This increased the supply of communal livestock farmers, and a few wealthy African cattle farmers emerged to take advantage of relaxed apartheid policies. However, the vast majority of farmers became poorer as animal population pressure in restricted grazing areas eroded the fragile natural resource base. Access to markets remained severely restricted, and veterinary services and extension advice in communal areas remained woefully inadequate. 2.15 In the two or three years before independence, and because of increasing uncertainty about their future, many large-scale livestock farmers began to hedge their bets and there was a substantial shift of capital out of farming in Namibia and into South Africa's financial markets, made easier because the Administration for Whites, at the end of its tenure, issued low-interest loans to white farmers who wanted to buy land. Many farmers reduced their stock or shifted towards calf raising, reducing the capital tied up in grazing stock. Cattle sales declined 4 percent per year after 1980, and karakul pelt exports declined 15 percent per year, while sheep and goat sales increased at 8 percent as farmers switched from karakul to goats and less environmentally kind, but more profitable breeds of sheep (for mutton and wool). As a result, mutton and wool production and exports have risen. Supposedly there was also a large shedding of labor, reinforcing a trend toward a decline of the large farm labor force, from 42,000 in the late 1970s to 35,000 by 1988. Reportedly, this downward trenm reflected reduced profits and fear that the new government would introduce minimum wage legislation or prohibit the laying off of farm labor. 2.16 There was no great exodus of white farmers. Given fair economic conditions and political stability, much of the capital exported to South Africa may return. Namibian farmers exhibit a dogged nationalistic spirit, and many have revealed their commitment to a new Namibia by their actions. A reversal of capital flows may not be enough to lead to a resurgence in large-scale livestock farming--there are indications that good land and water are becoming binding constraints--but the sector's output has partially recovered from the drought's ravages and is now only 9 percent below its 1981 level. 2.17 In terms of arable agriculture, large-scale farmers have started cereal production in a few better-endowed areas, maize farming has become established in the "maize triangle" near Otavi, and wheat is being produced with supplementary irrigation near Hardap. The result has been a 23 per cent annual growth rate in cereal production. Other, higher-value crops have followed. Strong growth might be sustained from this base--but not to the extent that crop farming becomes a major export earner or the long-term solution to Namibia's employment problem. 2.18 The Rossing Foundation and the First National Development Corporation (FNDC) developed an interest in communal arable agriculture. Rossing made a genuine attempt to improve - 23 - communal production, first in cere' id later in high-value crops. War near the Angolan border brought thousands of troops and th .- dependents, creating a new market for high-value crops and meat. FNDC tried to exploit this opportunity by establishing capital-intensive agricultural projects in communal areas. Both the Rossing and the FNDC initiatives were flawed. Rossing's efforts failed to consider that there is no organized market for millet, the preferred cereal in Ovambo and Kavango. Most FNDC projects failed ii at least three ways: First, they were money-losers, although capital was subsidized and the prices for the scarcest factors of production--land and water--were artificially low. Second, they failed to stimulate any increase in farmer productivity. Third, they displaced labor. 2.19 Summing up, the five-year period before independence was marked by faltering efforts to introduce reforms to level up the inequalities between communal and commercial farmers. Reforms were not only inadequately resourced and poorly designed but were wholly ineffective in reversing the trend toward greater inequalities. Expenditures on GDP Consumption 2.20 Despite stagnating income, rising private and public consumption was a striking feature of economic developments in Namibia during the early 1980s. As a proportion of GDP, private consumption grew from 45.9 percent in 1980 to 67.3 percent in 1983. It closed the decade at 56.2 percent. Government consumption followed a similar pattern, increasing from 16.5 percent of GDP in 1980 to 30.8 percent in 1984, and falling to 28.4 percent by 1989. The Government expanded the scope of its activities, and the public sector's wage bill went up from 10.1 percent of GDP in 1980/81 to 18.4 in 1986/87. Corresponding figures for the Central Government were 4.6 and 10.3, respectively. Investment 2.21 Increased propensity to consume mirrored a reduction in the willingness to invest. Gross fLxed investment fell from 27.9 percent of GDP in 1980 to 16.1 percent in 1989, after bottoming at 13.8 percent in 1985. While public investment declined steadily throughout the decade ending at a mere third of its level in 1980, private investment recovered mildly beginning in 1986, but still ended the decade at only half the level of 1980. The overall investment decline was the result of two factors. First, there was a deliberate Government decision to cut public expenditures as a way of limiting the size of the fiscal deficit in response to declining budgetary support from the RSA. Second, private investment declined because of (i) uncertainty about the political future of the country and about its future economic policies; (ii) the impact of sanctions against the RSA on Namibia's economic activity; and (iii) a decline in the international price of minerals during the mid- eighties, which slowed investment in the mining industry. It is clear that a higher level of investment in the productive sectors will be required if Namibia is to achieve faster economic growth and social development. - 24 - Table 2.2 Namibia: Fixed Investment, 1980-89 (Million 1980 Rands) As Percent of GDP Year Private' Public Private Public 1980 197.5 239.6 12.6 15.3 1981 176.8 205.1 12.5 14.7 1982 128.4 187.5 9.5 14.0 1983 100.6 137.1 8.0 11.2 1984 86.8 110.3 6.7 8.8 1985 75.7 121.4 5.3 8.5 1986 85.4 100.1 6.3 7.0 1987 95.3 99.6 7.3 7.4 1988 131.0 91.4 9.0 6.2 1989 156.1 75.9 11.0 5.2 v Private investment includes fixed investments of "private business enterprises" and "public corpora:ions, and excludes fixed investments of "public business enterprises." Source: Statistical Appendix Table 1.05 and 1.06 Balance of Payments 2.22 Data on Namnibia's external sector are generally weak. Because of Namibia's status vis-a- vis the RSA, the flow of goods and services between Namibia and the RSA has been completely unrestricted and has not been recorded in any systematic fashion. Until independence, there were no border posts between Namibia and South Africa. Existing balance of payments estimates are limited to the current account. Capital flow between Namibia and the rest of the rand monetary area has been totally free. The capital account has not been estimated, and there are no reliable estimates of the quantity of money in the economy. 2.23 During the 1980s the current account of Namibia's balance of payments moved from a small deficit in the initial years (1.0 to 4.0 percent of GDP) to progressively larger surpluses. These peaked in 1986, when they reached R561 million (18 percent of GDP). The balance on current account contracted after 1986, as the Government of the RSA reduced its financial transfers to Namibia. By 1988. the current account again showed a negative balance equivalent to 4 percent of GDP. - 25 - 2.24 The balance on goods and non-factor services has been negative most years, indicating that Namibia has been absorbing real resources from the rest of the world. Toward the end of the decade, the balance on goods and non-factor services ranged between 5 and 10 percent of GDP. 2.25 Exports and imports of goods stagnated during the early 1980s but grew rapidly late in the decade. Exports ranged from R940-R1,100 million in 1980-84, to approximately R2,700 million in 1989, prodded by a substantial rise in the price of diamonds. Imports followed a similar pattern, but their growth during the second half of the decade was less rapid. From R900-Rl,100 million in 1980- 1983, they increased to about R2 billion by the end of the decade. Table 23 Namibia: Gross Domestic Product and Expenditure at Current Prices, 1980-89 (Percentages) 1980 1984 1989 Private Consumption 45.9 65.1 55.8 Government consumption 16.5 30.8 25.6 Gross domestic fixed investment 28.0 15.4 14.8 Change in inventories 5.2 1.8 2.5 Exports of GNFS 73.6 54.2 53.9 Imports of GNFS 69.2 67.3 52.7 Source: Statistical Appendix Tables 1.05 and 11.01 2.26 The shares of both exports and imports to GDP declined throughout the 1980s, exports from 73.6 percent to 53.9 percent, and imports from 69.2 percent to 52.7 percent. The sum of exports and imports relative to GDP--a frequently used indicator of the degr e of openness of an economy--declined from 143 percent in 1980 to 107 percent at the end of the decade. This indicator suggests a 'closing" of the Namibian economy, which may have been caused by the international sanctions against the RSA and by the policies adopted by the RSA in response. Unfortunately, the weakness of Namibia's international trade statistics--especially import data--resulting from the country's treatment as a part of the RSA, preempts a firm conclusion in this respect. 2.27 In terms of the classification of productive sectors into tradable-producing (agriculture, fishing, mining, and manufacturing), and non-tradable-producing, the former bore the brunt of the contraction in output during the first half of the 1980s, declining by a cumulative 25 percent in 1985; after a marginal recovery, by 1989 tradables sectors had reached 80 percent of their 1980 output. The non-tradable-producing sectors, on the other hand, expanded their output throughout the decade, and the increase was 30.8 percent by 1989. 26 - 2.28 The precedinig analysis suggests two important differences between thc economy of Namibia in 1989, compared to 1980: (i) Namibians consume substantially more and invest considerably less of their income now. (ii) Namibians now sell a lower proportion of their production abroad and also import a lower proportion of what they consume. A sustainable economic recovery will require higher invcstment rates and a more dynamic external sector. Namibians will invest more in their own country if the policy environment is favorable to private sector activity; Chapters III-VIII discuss policies to stimulate investment and exports. Employment Labor Force 2.29 The ILO (1990) estimates Namibia's economically active population at about half a million, with 45 to 55 percent engaged in subsistence activities, agriculture, or in small informal-sector businesses. Total paid employment in 1990, including unregistered wage employees in domestic service, commercial agriculture, and other sectors, was about 43 percent of the labor force. More than half of formal wage employment in 1988 was in three sectors: government (29.7 percent), commercial agriculture (19.5 percent), and mining (5.4 percent). Many Namibians work in South Africa, almost all in the mining sector. RSA employment for 1985 document an estimated 72,000 Namibians, 71,000 in the mining sector. Characteristics of the Unemployed 2.30 No labor survey of any significance has ever been carried out in Namibia. Reliable estimates of unemployment prior to independence are not available. Estimates of the number of unemployed in 1989 vary between 30,000 and 80,000 and, according to the ILO, they were mostly black, unskilled laborers with some experience in mining or commercial agriculture. A significant number were women, typically former domestic servants. Also according to the ILO, unemployment has risen since independence as a result of the demobilization of some 53,000 combatants--37,000 with the South West Africa Territory Forces (SWATF) and about 16,000 with People's Liberation Army of Namibia (PLAN). The repatriation of 44,000 exiles has also added to the labor force. Current national estimates of unemployment range between 30 and 40 percent. The ILO estimates that 25 to 30 percent of the labor force in the formal sector is unemployed, while two-thirds of those in the subsistence sector are underemployed. 2.31 Unemployment rates are highest in the smaller urban areas--ranging from a low of 20 percent in Katutura to 50 percent in Okahandja, according to NBIC estimates. Female-headed households in Katutura are more likely to suffer unemployment, averaging 25 percent, while the unemployment rate for returnees is the highest: 80 percent in Katutura, 66 percent in peri-urban Ovambo, and 47 percent in rural Ovambo. As a share of the total labor market, these new market - 27 - entrants are significant--the increase is equal to 52 percent of those formally registered in wage employment in 1988, or nearly one-fifth of the total labor force. The demobilized combatants are mostly unskilled, while the returnees tend to have somewhat higher skill levels. In the rural subsistence sector, overt unemployment is less an issue than underemployment. The ILO estimates that most of the labor force in subsistence agriculture and, to some extent, those in the informal sector engage in low-income, low-productivity work. Others, such as casual laborers and seasonal farm workers, may be underemployed due to insufficient work throughout the year. Recent Employment Trends and Prospects 2.32 The gaps in average rural and urban income and living standards (e.g., housing) remain large, adding a strong incentive for the rural population to migrate, even to urban areas with high unemployment. Recent trends offer few prospects for rapid ernoloyment growth or a reduction in unemployment. Between 1984 and 1988, growth in formal wage employment was 2.3 percent annually, mostly in the public sector. A continuation of this rate would create 4,500 jobs annually, which the ILO estimates would cover only about one-fourth of new market entrants. But 2.3 percent is an optimistic rate because the main employers--the public sector, commercial agriculture and mining--all show stagnant or declining employment. The fisheries and services sectors promise growth in income and, possibly, in employment. The remaining sectors--subsistence agriculture and self employment in small or informal businesses--offer some prospects for productive labor absorption, but these too are considered limited. The informal sector remains small; even its high growth rates promise to generate little employment in the short term relative to need. Wage and Salary Structure 2.33 The principal feature underlying Namibia's labor market is economic dualism, reflected in labor market segmentation and wage dispersion. ILO estimates of the wage and salary structure in the formal sector offer some indication of wage dispersion and the returns to skills accumulation (see Table 2.4). Table 2.4 Namibia: Average Earnings Per Month by Occupational Category, 1990 (Rands) Unskilled Semi-skilled Professional Senior Management Public Sector 270 850 2,000 10,000 Private Sector 250-400 1200 2,000-2,500 7,000-10,000 Soure: ILO, 199 - 28 - 2.34 Average unskilled wage rates in 1990 were less than half the 1989 Windhoek primary household subsistence level (PHSL) of R570 per month.jj Including housing and transport expenses, the Windhoek HSL of R650 per month is nearly 2.5 times the unskilled wage rate in the public sector. Semi-skilled wages are more than three times greater than unskilled wages, while those for professionals jump to seven times the wage rate for unskilled labor. There is a high return to skills accumulation for those in wage employment. Unskilled Wage Trends 2.35 Trend data exist only for the construction sector in recent years and for the apprenticeship pay schedules over a longer period. Real wages have declined for all classes of worker since 1975. There is some indication that real wages fell the most for those in the lowest wage categories, as Figures 2.2 and 2.3 show. 2.36 The trend data starkly shows an unremitting decline in real wages for all classes of worker since 1975. Further, there is some indication that real wages fell most for those in the lowest wage categories. Real wages for apprentices in ail three years in the hairdressing trade fell 61 percent between 1975 and 1990. Over the same period, real wages for apprentices in all other trades fell 41 percent for those in their first year of apprenticeship, and 35 percent for those in their fourth year. There seems to have been some cushion for those with skills and a few years of experience. Economic Segmentation 2.37 The Namibian economy is highly segmented--in all sectors. For labor markets and wage determination, three aspects of this segmentation are relevant. First, the ILO found that profits generated in the formal white economy have not been invested in ways to raise the productivity of labor. Funds either flow out of the country or are invested to increase the capital intensity of white productionl. They neither establish links with other segments of the economy nor broaden the base of development within the economy. In this regard, the white Namibian economy has behaved like an enclave economy, developing little contact with the surrounding economy and transferring few benefits from its growth. The pattern of public expenditure has been similar To a large extent, the beneficiaries of public resources have been the white owners of the formal economy, not the broader population. Second, the ILO found that this has resulted in a relatively capital-intensive pattern of production in the economy, generating little employment growth. Third, a systematic process of wage and labor market segmentation has meant that there has been very little "trickle down" of benefits. Labor Market Segmentation 2.38 Segmentation of labor markets has occurred through three principal mechanisms: (i) a labor reserve system that permits unskilled wages to remain low, (ii) unequal educational opportunities or skill opportunities, and (iii) outright racial discrimination. 1/ See Annax I for definition and composition of urban poverty lines. - 29 - Flgure 2.2 NanIbla: Nominal Wages for Apprentices, 1974 90 (Rands per Month) 800 --_ _ - -_ - _ __ 700 _ 600 _ _ _ _ _ 400 -- 300 _ - - _ _ _ 200 100_ __ 9t 1974 1975 1977 1982 1985 1986 311989 3/1990 i[ 1st year Apprentice U 4th year Apprenticeji Flgure 2.3 Namibia: Real Wages for Apprentices, 1974-90 (1980 Rands per Month) 300 250 E ~ 200 50 E-= m I 1974 1975 1977 1982 1985 1986 3/1989 3/1990 E[l Ist year Apprentice U 4th year Apprentice - 30 - 2.39 The labor reserve system has kept the supply price of labor low by confining the black population to homelands, many of which are economically inviable for subsistence agriculture. The homelands were established de jure by the Odendaal Commission in 1964 (although the practice had existed de facto since the early 1900s). This homeland process served to ensure subsidized labor for Namibia's business sector. As agriculture in the southern communal areas was barely viable when the population density was low there, it became virtually impossible as population increased with the establishment of the black reserves. Households therefore ne_ded to send one or more members into wage employment. Employers, however, faced such an oversupply of unskilled labor that market- clearing wages were virtually zero. Payment of wages below marginal product was feasible on market- clearing terms, and was rationalized on the grounds that laborers had their family farms to supplement their income. Thus, laborers had virtually no alternative except migration. 2.40 The effects of the labor reserve system have persisted because there has been only limited productive investment in the homelands. Such investment has served neither to broaden the productive base nor to provide significant new sources of employment and income. Thus even though the northern homelands of Ovambo, Kavango and Caprivi offer much better agricultural potential, their growth has been constrained by lack of access to product markets, productive inputs, and services. Rapid population growth has also eroded he economic base and contributed to environmental degradation. For the most part, these investments (most of which were executed by the FNDC) have consisted of enclave investments, which benefit from state capital subsidies and access to services and inputs unavailable to the local population, to produce superior products at competitive prices, thus undermining local subsistence producers. Health regulations, which are barriers to the movement of livestock, have also limited the competitive position of the northern homelands producers and prevented them from trading with other parts of the country or exporting. 2.41 Limited access to public goods and services has blocked opportunities to improve real income in the homelands. Veterinary health, credit, agricultural extension, training, irrigation, fertilizers, access roads, and utilities are significantly underprovided compared with the commercial farm and industrial areas. The result has been neglect and actual deterioration of the homeland economies. Although traditional subsistence agriculture had been just possible in the homelands for much of the century, the lack of investment, coupled with population growth, increasing land degradation (overgrazing), and drought, has destroyed the fragile subsistence base. 2.42 The aiternative to subsistence agriculture in the homelands or in the formal wage labor market is self employment. Again, the regulatory structure and poor access to necessary inputs and services have severely hampered the growth of this sector. Micro-vendors in central Windhoek are restricted as to where they may sell and the number of vendors per location (effectively limiting entrants to the market) and are closely regulated by the health authorities (Box 2.1). Commercial credit is virtually unavailable to microentrepreneurs, although a few NGO micro-credit schemes are being developed. Demand is apparently high, since one of the few schemes that provides micro-credit can charge rates substantially above those available to larger commercial borrowers and still enjoy - 31 - better success with repayment rates.2/ As borrowers successfully build a credit history with repeated loans, they are eligible to move up to larger loans at more favorable rates. To date, however, very few have progressed beyond the initial loans. Box No. 2.1: lhawking, Windhoek Style Overseeing food hawking in Windhoek is a regulator's dream. Entry is strictly controlled -- by access to up-front capital, health inspections, regulatory standards, and favors from the town planner's office in the designation of hawking sites. The prospective vendor must submit evidence of a complete personal health examination, including chest X-ray, and a health inspection by a municipal health inspector of both the kitchen where the food will be prepared and the cart from which the food will be sold. The healtlh inspector pays a weekly visit to each cart and supply kitchen once a vendor is approved. Approved carts, imported from the RSA, are of stainless steel with gas canisters for cooking and water tanks and sinks for hygiene. Each one costs about R11,000. Once health clearance is obtained, a hawker must apply to the town clerk for a licene Getting a license (RIO per year) does not guarantee the right to hawk. Hawking sites are determined by the town planner. In the interests of maintaining the appearance and amenities of Windhoek, only 34 sites are designated as hawking sites in the central business district -- one hawker per site. Although the town authorities allegedly allocate these sites on a filrst-come-first-serve basis each day, all the downtown businesses are apparently owned by four or five entrepreneurs. The Bank mission observed that the same carts return to the same sites day after day. These are not microenterprises -- they are small-to-medium-size businesses that hire employees to manage retail carts on commission. 2.43 The second feature that has sustained labor market segmentation is the white population's monopoly on access to skills. Blacks have enjoyed few of the advantages available to whites, to acquire education, develop skills, and compete with whites on equal terms. This monopoly has been 21 Hawkers are eligible for FNDC's mini loan scheme. Loans are granted on the basis of a brief conversation with the borrower, display of some form of identification, and the filing of a form containing the borrower's name and address. No collateral is required. Terms for the smallest loans of R200 for one month, are RIO payable up front as service and interest fees--which on an annualized basis is equivalent to 86 percent interest. Borrowers may take and repay such loans three times before being eligible to move up to the next category of loan, up to RSOO, with R32 payable up front, for 90 days, equivalent to an annual rate of 30 percent. Rates on loans drop to 18 percent as loan sizes grow and a successful credit history is established. Repayment rates exceeded 90 percent before independence (although no borrower has yet graduated from the scheme to the commercial market). Since then, they have averaged 70 percent. - 32 - further enforced by the manipulation of -Jb categories and classifications to cxclude even those blacks who manage to gain some job skills.3/ 2.44 Finally, the ILO found evidence of clear wage discrimination--blacks being paid less than whites for the same job. One private sector survey cites differentials as great as 20-25 percent; the ILO suggests that in practice the differentials may be far greater. 2.45 A history of systematic economic and employment segmentation has left Namibia with a growing supply of unskilled labor, rising unemployment, a stagnant economy (which creates few jobs even when it grows), and a labor market that still clearly discriminates against blacks. These features are reflected in the labor market's grossly unequal structure of wages and salaries and in the significant proportion of black households living below the poverty line, with little prospect of escaping. Winners and Losers During the 1980s 2.46 Namibians as a group are poorer now than in 1980, but only the poor are poorer; the rich having managed to maintain their living standards, as Table 2.5 shows. Total per capita GDP fell by about 20 percent over the 1980s, but real incomes in the white modern sector were not affected. Incomes in the black wage employment sector fell by a third, while those in the subsistence sector fell by about 7 percent. The result was an increase in income dispersion. Blacks in the formal wage economy suffered the biggest losses, both in numbers and income. Red4ced numbers in this group conversely show up as increased numbers in the subsistence sector--as blacks return to their rural extended family base or enter informal urban activities. The Government's Economic Challenges 2.47 The Namibian authorities face four important economic challenges: (i) reactivating growth, (ii) redirecting and restraining the growth of public expenditures; (iii) reducing poverty; and (iv) generating employment. Legal or formal equality has already been established by the Constitution of Namibia, but the drive towards a more even distribution of income and public services is just beginning. Moreover, macroeconomic constraints make it difficult to do much in the short run. In particular, the country's development potential may be jeopardized by excessive speed in the pursuit 3_ Evidence from a survey of returnees conducted by NISER shows that 'While significant numbers of returnees have had some form of training, their skills levels and experience vary widely. This factor has served to reinforce the prejudices and biases of potential employers in different sectors of the economy. The uncertainty that has surrounded the qualifications of returning professionals (doctors, nurses, teachers, etc.), in particular, has caused considerable consternation. The qualifications of some professionals appear not to have been recognized as being equivalent to local qualifications. In such instances individuals are appointed on lower salaries than their local counterparts (as in the case of teachers and nurses) or are appointed to positions below their qualifications. While the issue of standards is a complex one, the seemingly arbitrary manner in which it is applied to repatriated exiles is a source of considerable dissatisfaction to many. There is also evidence that the issue of qualification standards has been used as a mechanism to discriminate against certain returnees." - 33 - of equality--leading to an overly rapid increase in consumption--and therefore becoming detrimental to the formation of domestic savings and capital accumulation. Table 2.5 Namibia: Per Capita GDP by Sector (1980 Rands) Black Year Total White Modern Wage Employment Subsistence 1980 1,140 12,830 900 59 1984 953 11,326 759 62 1988 921 12,839 585 55 Source: UNDP '?opulation and National Accounts of Namibia, 1989." 2.48 A possible short-term approach to the pursuit of equality--minimizing the possibly negative effects on saving and investment--would focus on reallocating public expenditures to even out the level and quality of public goods ar.d utilities for all Namibians. Over the medium and long term, the equity issue may be tackled most effectively by increasing the rate of growth of the Namibian economy, since a larger output of goods and services can support higher and more egalitarian sta"dards of living. Reactivating growth 2.49 There is scope for improving the growth performance of the Namibian economy. In the short run, economic recovery is likely to be led by the increased income generated from mining, agriculture and the fisheries sectors. Over the medium to long term, economic growth will take place only with higher investment rafes. Foreign investment and repatriation of Namibia capital would help--and there are ample opportunities for foreign investors in Namibia--but Namibians will also need to consume less and invest more. Public sector savings will be a key variable influencing the overall investment rate. There are limits to the Government's domestic and foreign borrowing. Excessive domestic borrowing runs the risk of "crowding out" the private sector in financial markets. The perils of excessive foreign borrowing are well known. 2.50 Mission estimates indicate that if Namibia is able to exploit its vast fisheries resources and capture the ensuing income, GDP may grow at about 3.5 percent per year during the next five years, barely above the population growth rate. If attained, these growth rates would make Namibians as a group some 3 pere?- icher by 1996. The extra income would give the Namibian authorities some elbow room to im;'kovc the standards of living of the poorer segments of the population without *34 - making any particular group worse off. The design, proper implementation and enforcement of the policies adopted for the two key subsectors are, therefore, extremely important for Namibia's economic growth and social development. Suggestions to accelerate growth constitute main theme of Chapter IV-VII. Restraining and redirecting public expenditures 2.51 The second challenge, redirecting public expenditures, must be met if the health, education, and housing services for the poor are to improve rapidly. Namibia inherited a highly competent public administration and a fiscal situation that while in balance, was too short on public investment and social services for the majority of the population. Bank projections indicate that for the next five years, at least, the Namibian Government will have to follow more stringent fiscal policies than the previous administration because fewer resources will be available. The analysis of Chapters IX and X shows that the problem with social program expenditures is not so much their volume, as their direction. The challenge is to meet the new priorities within a fiscal framework that does not endanger macroeconomic stability. Another challenge is to enlist Namibia's capable corps of public employees to meet the new Government's priorities, taking care not to render them ineffectual. Chapter III provides an assessment of the fiscal constraint, and Chapters IX-XII provide same suggestions for re-directing public expenditures. Reducing poverty 2.52 Success in dealing with the third challenge, poverty alleviation, will depend crucially on economic growth. Economic growth is the only sustainable medium-term solution to poverty. But the nature of growth also matters. It will be necessary to emphasize the efficient use of labor, the most important asset of the poor. These policies include fot example, eliminating subsidies now largely enjoyed by the rich (such as below-market interest rates). Regulatory controls that limit factor and product market competition also need to be eliminated. Public action is also needed to provide public goods, services and infrastructure to the poor, as well as to overcome market failures that hurt or exclude the poor. Examples of such actions include pricing social services (e.g., medicine), now offered basically at the same price to the rich and the poor alike, according to income levels. It is also important to provide more and better health, education, housing, transport, and agricultural services to the poor. Finally, some system of safety nets for the poorest is critical to stabilize their welfare. The design of a safety net system is beyond the scope of this report, but some suggestions to improve the present system are possible and offered below. 2.53 Efforts to include women should be a particular part of this strategy. Women are at a significant disadvantage in economic activity. While they hold primary responsibility for family maintenance and welfare, they have the least amount of discretionary time to avail themselves of social services and supports. Urban and rural women should be among the primary target groups for credit, skills training, and social serlices. - 35 - Creating employment 2.54 The fiiial challenge, employment creation, will probably be the most difficult. No single sector is likely to provide dramatic employment gains. Rather, the outlook is for incremental gains across all sectors. Fast economic growth will make the task easier, but the Government needs to facilitate the process by removing unnecessary barriers to employment creation and by training the labor force in the skills that it needs to make it more productive. The first priority in improving employment and wages is the removal of impediments to labor absorption. Policies that distort the relative price of labor, such as capital subsidies, targeted credit and tax credits, need review. The authorities should also examine the relative prices of other important factors of production--land, water, and technology. Underpricing these inputs may also be detrimental to the potential absorption of labor. 2.55 To ensure that the poor can participate in employment opportunities, small business regulations and labor market codes must also be reviewed. Competitive small and informal sector businesses offer prospects for employment growth. These businesses need access to input and product markets. First, overly restrictive regulations governing small businesses and services, such as vending and transport, need to be relaxed. These regulations tend to protect formal sector businesses against competition, and impose high employment and equity costs on the economy. Second, relative prices need to be free of distortions. Third, credit fot small business needs to be available on market terms, as discussed in Chapters V and VIII. 2.56 A competitive structure will be critical to the development of a sustainable small business sector. Again, overly restrictive regulations need to be modified or eliminated. For example, if their aim is to safeguard public health, that objective may be better pursued via preventive health campaigns that have wider economic and social benefits, rather than through regulations that effectively restrict the market and protect the formal sector at the expense of the informal sector. 2.57 Professional skills and skilled labor are scarce in Namibia--and can command premium wages--but unskilled labor supply far exceeds the number of jobs available. Thus, wages for this group remain low. However, introduction of a minimum wage at this time would be counterproductive and like;y to segmcnt Namibia's labor market further and slow employrnent creation. To be sure, a minimum wage might preserve wage gains for a few, but at the expense of those excluded. 2.58 As an alternative, negotiated wage settlements may be pursued under arbitration if necessary, and the results made public. Expanded access to the Ministry of Labor's program of certification could lower barriers in the skilled and semi-skilled labor markets. Government should continue to set standards for training and certification, and it should consider subcontracting training services to the private sector. Nevertheless, efficient creation of employment opportunities through economic growth is the most important labor market poliky. - 36 - IlM. FISCAL POLICIES Introduction 3.1 Fiscal Policy is the Government's main tool for addressing the inequalities in income and access to social services. Namibia inherited a capable and experienced public administration that is well placed to help meet the country's social and economic challenges. The new Government needs to capitalize on the experience and expertise of the public service while re-directing i;s efforts to serve the previously disenfranchised and neglected majority. Full use of this pool of ,,sututional expertise would expedite the establishment of a system to implement the new policy strategy. Structure of the non-Financial Public Sector 3.2 Prior to independence Namibia's public administration consisted of a Central Authority, 11 Representative or Second-Tier Authorities, an equal number of municipalities or Third Tier Authorities, numerous other local authorities, and several statutory entities. 3.3 Formally established along ethnic lines, the Second-Tier Authorities were to provide a measure of self-government to various population groups. They included one Administration for Whites and ten administrations for other ethnic groups and delivered most social services until independence. Although charged with the provision of health, education and welfare, they lacked the necessary human and financial resources to do so effectively. Except for the Administration for Whites, the Second-Tier Authorities depended heavily on financial transfers from the Central Authority. Their only other significant revenue came from the personal income taxes paid by each ethnic group. Central Government transfers to the Second-Tier Authorities are estimated to have covered at least three-quarters of their expenditures, on average. 3.4 Until independence, the Government of the RSA retained ultimate executive power, in the hands of its representative, while the Legislative Assembly had only limited power. Until April 1, 1989, the second tier governments were run by their own executive committees, but on this date the Administrator General--the representative of the RSA Government--assumed the executive power for all three tiers of administration until the establishment of a government for Namibia. 1 3.5 The Constitution abolished the Second-Tier Authorities in 1990 and provided for the eventual establishment of regional and local units of government. It left open the determination of regional and local boundaries, functions, powers and sources of revenue. Until this structure becomes fully operational, the Central Government will perform the functions of the Second-Tier Authorities. The status of the rest of the general government and of the non-financial public enterprises remains unchanged until repealed or amended by Act of Parliament or declared unconstitutional. 3.6 During the 1980s the public sector of South West Africa was expanded to include some decentralized agencies of the Central Authority and various enterprises taken from the South African - 37 - public and private sectors. As a result, South West Africa's public sector became responsible for a wide range of public services, including electricity and water supply, transportation (road, air, sea, and railway), and post and communications (telephones, postal services, radio, and TV). flhe public sector also comprises the Academy, which manages the University of Namibia, Tecnicon Namibia, and the College for Out of School Training; the Namibian Broadcasting Corporation (NBC); TransNamib Ltd., a transport company that owns the national rail system, and the nationial airline, runs a road transport enterprise, manages Luderitz harbor, and provides shipping services; and South West African Water and Electricity Corporation (SWAWEK). 3.7 At present the Namibian Government consists of: (i) a Budgetary Central Government, which comprises 18 ministries, 2 offices, and the regional offices of former Second-Tier Authorities; and (ii) several special funds, including the Redemption Fund of the Central Government; and (iii) several agronomic marketing boards (discussed in Chapter V). Departmental entities consist of the Construction Division of the Transportation Department and the Department for Water Affairs, the budgets of which remain an integral part of the Central Government's budget. In addition, the Central Government's Budget includes the Post Office and the airports, which are nonfinancial public enterprises. Included in the Central Government are various municipalities and townships and their associated departmental enterprise. In addition, the public sector includes three large nonfinancial public enterprises, and some smaller enterprises, mainly commodity boards, which have a significant influence on pricing and marketing decisions. 3.8 The Academy does not run on commercial principles. Instead, as a decentralized agency of the Central Government, the Academy receives approximately 85 percent of its revenue as a subsidy from the Government. In addition, the Government also provides long-term financing and guarantees other Academy loans. 3.9 NBC is not run on commercial principles either. It receives approximately 80 percent of its revenue as an operating subsidy from the Government. The remaining revenue derives from license fees and advertising. NBC's capital expenditure is financed from the budget of the Ministry of Information and Broadcasting. 3.10 The two major public enterprises, TransNamib Ltd. and S WA WEK, are fully Government- owned but are run commercially, both are in strong financial condition. TransNamib Ltd., in rail, road, air and sea transport, took over NTC as established in the National Transport Corporation A'xct (1987). The corporation has operated only since July 1988. but registered both a consolidated operating and overall surplus, 'nough end-March 1990, and has transformed the railroads' heavy losses into a strong operating surplus. TransNamib's financial position is further strengthened by the virtual absence of debt. 3.11 SWAWEK's financial posit.on is similarly strong, with overall surplus rising. In the past two years it paid dividends to the Gc 'ernnment. However, SWAWEK is only providing electricity to nmajor centers, where this is a profitable business activity. Because of the country's vast size, and sparse population, most Namibians live without electricity. - 38 - 3.12 The First National Development Corporation (FNDC), created in 1978, is a Covernment- owned holding company for the Government's equity investments in slaughterhouses, mining, manufacturing, agriculture, rural development, cattle ranching. Aistribution services, and service stations. FNDC is authorized to raise capital in private markets, but so far has relied on annual Government budget replenishment. FNDC's financial accounts show a small operating income relative to turnover, although the performance of its enterprises varies dramatically. Agronomic enterprises and rural development ventures have shown losses consistently, while most of its other enterprises hlave shown some profit. Its loan portfolio is small. Its leniing has been primarily to its own companies, at subsidized rates. FNDC also has a small portfolio of loans to black entrepreneurs, at rates of over five percent per month. FNDC has paid no taxes and, so far, no dividends. Recent Fiscal Performance: A Summary Central Govemment 3.13 Government finances in the 1980s were dominated by four factors: (i) the expansionary impact of the three-tier Government, especially in the early part of the decade; (ii) the decline of budget support provided by the RSA, especially after 1986/87; (iii) the decline in revenue received from the RSA in lieu of customs revenue (SACU receipts) relative to total revenue; and (iv) the Namibian policy response to the three preceding factors--seeking to reduce the fiscal deficit and reducing the burden of public debt incurred in the early 1980s. At independence Namibia had a relatively high revenue-to-GDP ratio, equivalent to 39 percent. There was a more even distribution between taxes on income and profits, on the one hand, and domestic and international transactions, on the other, than at the beginning of the decade. The tax base, however, was still narrow and heavily dependent on diamond and uranium revenue, which meant that fluctuations in the prices of these commodities still had a marked influence on overall revenues. While overall expenditure had been reduced, the adjustment had been accomplished mainly by cutting investment, with little effort to improve efficiency. A cumbersome bureaucracy and attendant inefficiencies were reflected in an excessive wage bill for the General Government (estimated at 18 percent of GDP in 1989, or triple the average for the third worid), high current expenditure, and low-quality service for the majority of Namibians. Revenues 3.14 In the early to mid-1980s, revenues averaged about 26-28 percent of GDP (Table 3.1). Payments from the RSA in lieu of customs and excise duties (i.e., SACU receipts) accounted for the bulk of the Central Authority's revenues. Other sources (mainly company tax, special diamond taxes, a general sales tax, and administrative fees and charges) contributed, on average, less than one-half of the total. Income taxes accrued to the Second-Tier Authorities until 1989/90, when all individual income taxes became payable to the Central Authority. 3.15 In the latter half of the 1980s, revenues rose relative to GDP by about eight points, to 38.7 percent. Small declines in SACU receipts were more than offset by successive hikes in the sales tax rate, the recovery of the mining sector, and higher receipts from taxes on income and profits. - 39 - Income tax yields, according to the Central A-thority, rose in the mid-1980s, when withholding began to be passed from the Second-Tier to the Central Authority, and again in 1989/90, when all personal income taxes became payable to the Central Authority. Expenditures 3.16 Central Authority expenditures reached a record 49 percent of GDP in 1983/84. Current expenditure went up particularly fast in the first half of the decade, as employment in the public sector expanded and interest payments rose on the mounting debt. Current transfers (mainly to the Second-Tier Authorities for expenditures on health, education, pensions, and welfare) rose more slowly but still faster than GDP. Capital expenditure declined sharply, both in nominal terms and relative to GDP, from 12.1 percent in 1981/82 to 8.4 percent in 1984/85. 3.17 The Government's wage bill rose from 4.6 percent in 1980/81 to 9.3 percent in 1983/84 and remained around 10 percent of GDP until 1987/88. The wage bill declined to 8.5 percent of GDP in 1989/90. The rise in thie wage bill until 1987/88 reflected a sharp expansion of employment and an attempt to attain parity with Government wages in the RSA. The latter objective had to be abandoned in the late 1980s owing to tightening fiscal conditions. 3.18 After fiscal 1984/85, overall expenditures declined relative to GDP. Capital expenditures were cut by half relative to GDP, from 8.4 percent in 1984/85 to 3.5 percent in 1989/90. Current expenditures were cut by about 4 percentage points relative to GDP, mainly affecting transfers to the Second-Tier Authorities. Interest payments, however, also declined in nominal terms over several years. Relative to GDP, the wage bill and expenditure for other goods and services remained stable until 1989/90. 3.19 In the second half of the 1980s, about 40 percent of total expenditures was allocated to the protecfive and administrative services (until 1989/90 when expenditure for national defense dropped). About one-third was spent on community services (education, training, health, and welfare), and about one-quarter on infrastructure and economic services. Financing the Deficit 3.20 During the first half of the 1980s, the Government deficit averaged about 20 percent of GDP, most of it financed through budget support from the RSA, as Table 3.1 shows. Commercial bank borrowing (with RSA guarantee) financed about six points of GDP, and as a result, Namibia's public debt rose from less than 6 percent of GDP in 1980/81 to 32.7 percent of GDP in 1983/84. 3.21 In the second half of the decade, a significant reduction in budget support from the RSA forced a sharp decline in the overall deficit to an average of 9 percent of GDP, roughly equal to the volume of transfers received. The reduction of the deficit was achieved through an average increase in revenues equivalent to 8 percent of GDP and an average reduction in expenditures of about 3 percent of GOP is Table 3.1 shows. A small annual surplus (after budget support) together with drawdowns of accumulated cash balances were used to reduce public debt from 34.9 percent of GDP at end March 1985 to 13.9 percent at end March 1990. - 40 - Table 3.1 Namibia: Summary Financial Operations of the Central Authority, Fiscal Years 1981/82-1989/90 (As percent of GDP) Average 1981/82-84/85 Average 1985/86-88/89 Prel. 1989/90 Revenue 26.3 33.8 39.0 Taxes on Int'l. Trade 14.4 11.3 10.1 Other Revenue 11.9 22.4 28.9 Expenditure 45.9 43.2 28.9 Current 35.7 35.7 35.2 Capital 10.1 7.5 3.7 Surplus (- =Deficit) before RSA budget support -19.6 -9.x: 0.1 Surplus (- =Deficit) after RSA budget support -5.6 0.8 2.9 Financing 5.6 -0.8 -2.9 Borrowing, net 8.6 0.2 -3.4 Increase in cash balances (+) 3.0 1.0 -0.5 Source: Statistical Appendix Table 111.026 Central Government Performance for 1990/91 and Budget for 199V92 3.22 The budget for 1990/91 reflects the transition to independence and the attendant new claims on the Government's scarce financial resources. The Central Government is being restructured to incorporate new institutions and to integrate and rationalize old ones (such as the Second-Tier Authorities). Various affirmative action programs seek to provide employment for groups that previously did not have access to government jobs. Finally, in the interest of national reconciliation, all pre-independence civil servants have been guaranteed job sta'.ility. 3.23 The budget targeted a deficit (before budget support) equivalent to 6.5 percent of GDP. After budgeted donor country support, the deficit was targeted at 3.8 percent of GDP. To finance - 41 - the deficit and heavy debt redemption, the budget incorporated a drawdown on cash balances of R186 million, leaving unfinanced a gap equivalent to 3.4 percent of GDP. 3.24 The budget anticipated a drop in revenvu equtivalent to 7.2 percent of GDP, from 39.0 percent to 31.8 percent, reflecting a decline in taxes from mining, and a slowdown in economic activity after the departure of the UNTAG Group and the RSA defense forces. No new revenue measures were included, but the Government believed that revenue performance could improve through better tax administration. 3.25 Complete information on the outturn of the operations of the Central Government for 1990/91 is not vet available. Preliminary information, however, indicates a deficit equivalent to 5.2 percent of GDP before budget support, or 3.5 percent after budget support. The lower outtum relative to the budgeted deficit reflected lower-than-budgeted revenues and expenditures. Revenues from SACU were 60 percent lower than budgeted, but debt-service payments, subsidies, transfers, and capital outlays also came under budget, more than compensating for the revenue shortfall. The preliminary outturn for 1990/91 illustrates the uncertainty associated with SACU revenues and the difficulties that this creates for fiscal management. 3.26 The budget for 1991/92 shows a sharp rise in the deficit, to 6.2 percent of GDP after budget support (7.7 percent before). The budget is to be financed by new loan disbursements equivalent to 4.5 percent of GDP, and a drawdown of cash balances (including the amortization fund) equivalent to 3.7 percent of GDP. Were the budget to be realized, it would be reflected in a serious drawdown of the Government's cash position that would hamper its ability to sustain even the projected medium-term expenditure level and it would raise Namibia's Central Government debt significantly. Total Central Government outstanding debt at end-1990/91 was estimated at 12.3 percent of GDP. 3.27 It should be noted that while the level of the deficit projected for 1991/92 is comparable to that of previous years, budget revenues and expenditures are overstated by identical amounts, because previous years include operating surpluses of some departmental enterprises on a net basis, while the 1991/92 budget treats them on a gross basis. There is insufficient data to make the conversion, but it is estimated to amount to some 2 to 3 percent of GDP. Even after making allowance for this difference in reporting, both revenues and expenditures are budgeted to rise sharply in 1991/92. On the revenue side, while taxes on income and profits are budgeted to contract sharply owing to the drop in mining taxation, this is more than offset by the budgeted increase in taxes on international trade, mainly from SACU receipts. Furthermore, non-tax revenues are projected to rise sharply, partly because of budgeted compensation from the RSA for the use of the rand, partly because of increased investment income, and partly because of sale of quotas and licenses for fishing activities. In total, revenue is projected to rise to 33.7 percent of GDP in 1991/92. Thus, the significant fiscal deficit arises because expenditures are budgeted at 41.4 percent of GDP, with a wage bill equivalent to 18 percent of GDP, and total current expenditure of 34.2 percent of GDP. - 42 - The Dual Challenge of Improving Equity and EMciency 3.28 Namibia was in a relatively strong fiscal position at independence. For nearly five years the operations of the Central Authority had been progressively adjusted to declining b idgetary support from the RSA and in the year before independence the budget was virtually balanced. At the same time, the public debt had been reduced to very low levels and two of the three major non- financial public enterprises which are run on commercial principles, had overall surpluses and little or no debt. 3.29 Namibia's public administration, however, confronts difficult problems and it has yet to attain a sustainable fiscal position. It has inherited a complex administrative apparatus and a narrow revenue base that is still vulnerable to changes in world market conditions. Expenditures are still extremely high, despite dramatic reductions in investment. suture SACU revenues, or customs and excise revenues, are uncertain. Finally, budget support from the RSA--down to about 2.5 percent of GDP in the year immediately before independence--is likely to be further reduced. Given the narrow tax base and the already high tax burden, there is limited room for increased taxation in the short term. However, expenditure pressure to meet both social and economic needs is strong. The challenge to the new Government is to maintain existing assets and rationalize the public administration to meet new priorities, without jeopardizing fiscal and macroeconomic stability. 3.30 The new Government has moved quickly to deal with these problems, but they cannot be resolved overnight. The inherited complex administrative structure has been dismantled, but the new administration is not yet fully in place. Because the Constitution protects the employment of "... all persons holding office... at the date Af independence..." an oversized public sector will continue to be a financial burden. The narrow revenue base reflects the structure of production and the distribution of income--conditions that are unlikely to change in the short run. Namibia will also need to develop its own customs and excise tax administration, and its own statistics on external trade to be able to claim its due share of SACU receipts. Prospects for Own Revenues 3.31 Given that recourse to financing should remain relatively limited, fiscal expenditure should be basically financed from Government resources.ii In the medium term, revenue growth remains constrained by the already high tax rates, the narrow tax base and the slow growth prospects of some of the sectors which are major tax contributors. Furthermore, Namibia's revenue performance will depend crucially on its receipts frorr. SACU, with whom Namibia (in the absence of trade statistics) did not reach agreement on its share for 1990, and has yet to reach agreement in 1991. The medium- term projections of SACU revenues are based on information obtained in late 1990.2/ _1/ Including revenue from customs and excise duties, so-called SACU receipts, but excluding loans and grants. 2 / The budget for 1991/92 contains much larger SACU receipts than those projected on the basis of information available at end- 1990. Medium-tenn projections are based on the old level of receip:s because the reasons for the newer receipts is not available. - 43 - 3.32 The following paragraphs present annual budgets for the next five years that are consistent with the overall economic growth of the economy, likely resource availabilities from the donor community, and with macroeconomic stability. The projected budgets, thus, give an idea of the resource envelope that the Namibian authorities are likely to have.3I 3.33 Central Government revenue is projected to continue to decline relative to GDP, after an initial sharp drop from 39 percent to 29.3 percent of GDP in 1990/91 explained by i) the impact of UNTAG and South African troop withdrawal, ii) low output and reduced world price s and iii) the relative decline in projected receipts from SACU. While these factors are estimated to account for a drop in revenue equivalent to 10 percent of GDP in 1990/91, the impact of the last two factors will continue to depress revenue throughout the period to 1995/96, where Central Government revenue is piojected at 29.7 percent of GDP (Table 3.2). 3.34 These projections are particularly sensitive to the assumptions regarding the depreciation of the rand and the prospects of the mining sector. The contribution of the mining sector to revenue is estimated to have declined from 5.6 percent of GDP in 1989/90 to 3.2 percent in 1990/91, and is projected to decline to 2.2 percent of GDP in 1995/96, with a further decline of about 1 percent of GDP, if the assumed depreciation of the rand does not materialize. 3.35 Prospects for customs and excise tax revenue are even more important for overall revenue performance, and even less certain than those for mining sector revenue, The projections assume that Namibia should have received R500 million from SACU in 1990/91, and that SACU receipts will grow thereafter in line with projected import volume and prices. The amount received from SACU could well vary, and in fact there is no certainty that Namibia will remain in the customs union over the entire period. In that case, the proficiency of Namibia's new customs department, and the level of dutiable imports and excise and tax rates will determine the revenue actually collected. 3.36 Upper and lower bounds for Namibia's revenue from SACU can be estimated by calculating Namibia's minimum share in the pool based on i) the available very rough estimates of Namibia's imports, excisable goods, etc., with a two year lag and applying to this the minimum 17 percent rate that is payable to all SACU members except RSA; and ii) applying the 1988/89 interim formula for Namibia's share of the pool (agreed on between the interim authority of Namibia and RSA in the absence of trade statistics). The two calculations give significantly different results, and in any case neither of them may be applied in the final negotiations. Thie chosen estimate, which would represent an increase relative to 1989/90 of 5.6 percent, falls within these two boundaries for 1990/91. By the end of 1990/91, the Namibian authorities should have a better basis for negotiating their share of the pool, based on the actual trade statistics for 1990/91. _/ 'Me projections are based on the preliminary outturn for 1989/90. partial information on revenue performance through 1990, and the macroeconomic projections of Chapter XIII. Although the budget for 1991/92 has been approved and is included in this report, the information was not sufficient to use as basis for medium-term projections. - 44 - Table 3.2 Namibia: Medium-term Financial Projections (As percent of GDP for Fiscal Years ending March 31) Prelim B3udget Projected 1991 1991/92 1992 1993 1994 1995 1996 Revenues 29.3 33.7 32.0 31.5 31.2 30.5 29.7 Taxes 25.9 27.9 29.4 28.9 28.6 27.9 27.1 Other 3.3 5.9 2.6 2.6 2.6 2.6 2.6 Expenditures 34.5 41.4 35.5 34.7 33.6 32.4 31.0 Current 30.1 34.2 30.4 29.5 28.5 26.8 25.5 Capital 4.4 7.2 5.1 5.1 5.1 5.6 5.5 Deficit (=-) -5.2 -7.7 -3.5 -3.1 -2.4 -1.9 -1.3 Budget Support 1.7 1.5 2.1 0.9 0.0 0.0 0.0 Financing 3.5 6.2 1.4 2.2 2.4 1.9 1.3 3.37 The projections assume that Namibia either chooses to stay within SACU or sets its customs and excises at rates high enough to maintain revenues from this source constant in nominal terms. The decision on whether or not to remain in SACU will clearly need to take into account the estimated fiscal revenue derived from continued membership, but will need to be based on a much broader evaluation of the costs and benefits of SACU membership to the development and trade potential of Namibia. 3.38 These projections are on the conservative side. Namibia's nominal tax rates are already high, and with the possible exception of the land tax discussed in Chapter V, it would not be advisable to raise them further. Tax administration, however, can be improved, existing exemptions tightened, and liberal write off provisions reduced. These changes would increase revenues and further the equity of the tax system. The narrow tax base is a reflection of the economic system, and tht refore, the tax base will automatically widen with broader-based economic development. Revenues can also be increased through the implementation of the recommended system of user charges and cost recovery policies in the social sectors, and improvements in user charges for transport, as discussed in Chapters IX-XII, and for postal services, airports, and water affairs. The major public enterprises, which are run generally on business principles and are in sound financial condition, might be subjected to company taxes. Also, there is no economic reason for exempting them from paying dividends to their shareholder, the Government. Furthermore, the status of FNDC, which every year is a drain on the Central Government, needs to be examined with a view to reversing this position, or liquidating it. Finally, the projections do not take into account revenues from fishing licenses, and - 45 the land tax, which could add some 2.5 to 3.5 percentage points of GDP to fiscal receipts. Under a more optimistic scenario, then, total revcnues might amount to some 32-34 percent of GDP. Donor Funding: Rand and Non-Rand Borrowing Policies 3.39 With independence Namibia lost RSA as an important source of budget support, but donor support is expected to replace it, at least partially. RIOO million arc estimated to have been disbursed in 1990/91- -somewhat less than RSA budget support to Namibia in the last year before independence. The base case medium-term projections assume an increase in budget support disbursements for 1991/92, before tapering off in 1992/93 as Namibia's budget becomes sustainable and donor funding changes from budget support to project support. To finance the deficit, Namibia will need recourse to debt-financing in an amount equivalent to about 2-3 percent of GDP, as shown in Table 3.2). In addition, the Government will need to drawdown its cash balances (including its amortization fund and the funds inherited from the Second-Tier Administrations). 3.40 So far, Namibia has maintained that non-rand denominated loans on even highly concessionary terms may become onerous as a result of the depreciation of the Rand, over which Namibia has no control. The donor funding disbursed in 1990/91 was in the form of grants. The projections assume maintenance of this policy. Expenditures 3.41 Meeting the challenge of poverty alleviation wi'l inevitable require an increase in expenditures, but the major part of the real gains will come from the elimination of inefficiencies in spending and improvements in the quality of services, not from increased budget allocations. Total expenditures of the Central Authority ranged between 40 and 50 percent of GDP in the 1980s and are estimated to have been reduced to about 35 percent of GDP in 1990/91, despite an increase in the wage bill from 9.1 percent of GDP in 1989/90 to 15.4 percent in 1990/91. This increase is in large measure due to accounting methodology reflecting a re-organization of the Government. Only the expansion of the Central Government (for new ministries, embassies, etc.) entailed an increase in total expenditures. The remaining increase in the wage bill reflects a change in the structure of Government and was accompanied by a corresponding reduction of transfers from the Central Government to other Government entities. For the future, the projected expenditures shown in Table 3.2 decline as a percent of GDP owing mainly to a lower real wage bill. Until the Government achieves a sustainable fiscal position, it would be advisable to keep the wage bill constant in real terms and, if possible, to lower it. Table 3.3 shows an alternative projection with a wage bill constant in real terms. Although compared to historical levels, the projected wage bill in both cases seems low, this is due to savings made possible by the cessation of hostilities. A functional breakdown of Central Government expenditures for the five years before independence shows that about 40 percent was spent on protection and administrative services. The projections incorporate a significant reduction in the share of protective services. - 46 - 3.42 The projections also incorporate an assessment of what is possible in the short run. An efficient redirection of resources requires good information, proper project preparation, and the ability to implement projects. The present administration did not inherit a ready-made portfolio of projects reflecting new Government's priorities, nor a data base that would enable it to make optimal, or in some cases, even good decisions, as discussed in Chapters IX and X. The data base as well as the project portfolio have to be created even though there are already efforts in this direction. At present, however, the scope for these improvements varies between sectors. For example, it is clear that past expenditures on health and education were disproportionate to the services received, but it will take time to reorganize the health system and train teachers to provide quality education. On the other hand, within a much shorter period it may be possible to (i) improve the housing situation; (ii) provide extension services to communal farmers; and (iii) construct feeder roads in .nIe north. The disparities in information, planning, and implementation capacity among the various sectors suggests that one of the most urgent tasks is to improve the data base, properly prepare projects, and enhance implementation ability; strengthening of these functions should be concentrated in the first instance in the high priority sectors of health, education. 3.43 There is also some scope for savings and for efficiency gains. The constitutional decision to abolish the second-tier governments offers hope for a radical streamlining of expenditures in the medium term, even if the constitutional provision that all government employees be retained EImits the scope for immediate streamlining. More efficient use of resources is possible in many areas. For example, using different building materials and standards for low cost housing, as suggested in Chapter XI, would permit lowering construction costs by 30 to 40 percent. Lowering road maintenance standards, as suggested in Chapter XII, would also bring some savings. Finally, subjecting expenditures to strict economic analysis, as suggested be done in road construction, for example, and undertaking only those that can be justified on economic and social grounds, would improve resource use. 3.44 Savings and efficiency gains are always difficult to take into account explicitly in any projections. In the case of Namibia, where a major re-direction of resources is also to take place and the data base permits only a superficial analysis, it is even more difficult. Nevertheless, some rough estimates of global availabilities and general direction are possible. With resources available from taxes and other income plus expected budget support, the authorities would be able to finance expenditures amiounting to 36 percent of GDP in 1991/92, and about 31 percent in 1995/96, as Table 3.2 shows. Such an expenditure level would allow an increase in the purchase of goods and services and in capital expenditures of 25 percent (real terms) in fiscal 1991/92 and 5 percent per year thereafter until 1995/96, provided that the wage bill declines about five percent per year in real terms. The latter is a crucial pre-condition and a difficult one to meet, because the Government has few degrees of freedom in this regard. Under this scenario, the Government would be able to finance 30 percent to its capital expenditures from current savings in 1991/92 and about 76 percent by 1995/96. It would have to rely on grants and concessional financing for its long gestation projects, and on domestic financing for the rest. Looking further ahead, Namibia would need to strengthen its fiscal position, as the authorities cannot continue to rely on external concessional project financing for the medium term. Table 3.2 is based on conservative assumptions about revenues and on a 5 percent real annual decline in the wage bill. - 47 - 3.45 Were the wage bill to remain constant in real terms, the authorities could siil! provide the same level of goods and services and levels of investment if revenues from the sal of fishing licenses attain their potential level and if the donor community increases its annual support ovei the next five years by an amount equivaient to R640 million (US$255 million at 1989 prices), as the projections shown in Table 3.3 suggest. Borrowing additional amounts on commercial terms at a time when the public administration is still undergoing re-organization and the data on which to base solid decisions is still wanting, might not be as efficient a usc of resources as borrowing in three to four years. Since borrowing now would reduce the scope for borrowing later, the authorities need to use this instrument with care and only for projects where the social and economic returns, as well as the preparatiorn and implementation capacity, are satisfactory. Fiscal Policy Recommendations 3.46 axpenditure rationalization and streamlining of the public administration must be at the center of the efforts to bring Namibia's public finances to a sustainable position. In particular, the constitutionally mandated reorganization of the public administration should contribute significantly to restraining expenditures relative to GDP. Restraining expenditures would require a reduction in the wage bill, a rationalization of expenditure in th- social sectors, and a redirection to the social and economic priority sectors. The base projections incorporate a reduction in the wage bill to 11 percent of GDP by 1996. This projection already makes allowance for the new functions undertaken by independent Namibia and is still about twice the aveiage for developing countries. Government options to attain this goal are lowering employment (or real wages. The first option has serious limitations because of the constitutionally-enshrined job guarantee for public employees; attrition and early retirement might be the only feasible alternatives. The second option would probably not be in Namibia's best interest, as the more capable employees are likely to seek employment in the private sector, if public sector wages are not competitive. Efforts to streamline the public sector through attrition and early retirement need to be made as earlv as possible so as not to perpetuate the inefficiencies inherited frorn the previous administration. Meanwhile, and in the irterest of a rapid establishment of a wore efficient civil service, it would be higlhly desirable to make intensive use of the experienced civil servants who have remained after independence, to advise, work with, and train more inexperienced staff. 3.47 As for the division between capital and current expenditures, Namibia already has a fairly large capital stock. By comparison, Namibia has under-invested in human capital, which at this time is more important for the country's future development. It would be advisable, therefore, that fiscal policy be modified to take into account the need to allocate funds for current expenditure in prioricy sectors, such as health and education. This is not to say that investment in physical assets should be neglected, but Namibia needs to exercise caution in its choice of investment projects and take into account (i) avaiidble financial resources and implementation capacity; (ii) the opportunity cost of capital; and (iii) the recurrent costs inevitable generated by investment programs. Accordingly, the investment program needs to be maintained within limits that ensure that future recurrent costs do not become excessive and threaten the envisaged fiscal balance. -48 - Table 3.3 Namibia: Central Government Financial Projections, Alternative Scenario (As percent of GDP) Item 1991/92 1992/93 1993/94 1994/95 1995/96 Total Revenues 35.2 34.3 34.0 33.2 32.5 w¢which: fishing licenses 3.2 2.8 2.8 2.7 2.8 Current Expenditures 32.0 31.2 30.7 29.5 28.5 of which: wages 16.3 15.8 15.3 14.7 14.0 Current Savings 3.2 3.1 3.3 3.7 4.0 Capital Expenditures 5.1 5.1 5.1 5.6 5.5 Budget Support Required 1.9 2.0 1.8 1.9 1.5 3.48 Were Namibia to introduce its own currency, fiscal and financial discipline would be crucial prerequisites for price stabilitv ^. 4 a strong currency. A public sector deficit financed with central bank credit may have dele *us effects on price stabiiity, growth. and probably income distribution, as iinflation is like' _,;ct lower income groups harder than the rest. A public sector deficit, financed with commercial c. 'k credit, may crowd out the private sector and slow economic growth. Experience in Africa and Latin America shows that fiscal and monetary prudence is Namibia's best option for stable prices, sustained economic growth, and a strong currency. 3.49 Namibia begins its independent life lightly indebted. The challenge to the authorities will be to maintain the country's macroeconomic stability and creditworthiness while laying the basis for using resources more efficiently in the future. The world is replete with countries that have borrowed only to invest poorly or to sustain short-lived bonanzas. They are now undergoing paintul adjustments. Namibia does not need to repeat these mistakes. At this time in Namibia's life it would risky to seek commercial financing because a large proportion of the country's expenditures are for social projects and programs with long gestation periods and far-into-the future pay-offs. Moreover, in at least two of the most important social sectors the data for informed decisions is wanting. The prudent course would be to seek grants and loans with a strong grant element to lay the basis for effective programs that can be implemented in two or three years and to concentrate in the more populous and poorest regions of the country in the areas of agriculture, health, education, sanitation, and housing. Such a focus would utilize the Government's limited implementation capacity in high priority areas and prepare the ground for more active programs in the near future. As Namibia's new administration consolidates its position and the data required to make better decisions becomes available, the authorities might consider financing public sector projects with non-concessional external loans. - 49 - IV. MINING Structure and Composition of the Sector 4.1 Mining is by far the most important productive sector of the Namibian economy. On average, over the past 10 years it has accounteu for: * 31 percent of the Gross Domestic Product; * 18 percent of the Gross Domestic Fixed Investment; * 18 percent of the Cash Remuneration paid to Employees; * 76 percent of the Export Earnings; and * 38 peii[ent of the Tax Revenues (last eight years). Although mining employs only about 5 percent of the labor force, it accounts for nearly 13 pel ent of wage remuneration, suggesting that it is a complex capital-intensive sector requiring highly skilled labor. 4.2 Diamonds, uranium, and metals (copper, lead and zinc) contribute more than 95 percent of the value of mineral production while industrial minerals such as marmor, lithium, fluorspar and semi-precious stones make Lip the rest. Large scale operations 4.3 Eight foreign-owned operations account for 98 percent of the sector's production vaiue. Two of the 40 mines currently operating in Namibia employ more than 2,000 people and genierate a gross anniual revenue of more than R500 million each. Another six mines employ more than 200 employees and generate a gross annual revenue above R10 million. With the exception of Rossing Uranium in which the Government holds a small share, these operations are owned by major foreign mining companies. 4.4 Two of the Namibian mining companies are significant by world standards, Consolidated Diamond Mines (CDM) and Rossing Uranium account fo, 75 percent of the production value of the mining sector. CDM ranks sixth in production volume of near-gem and gem diamonds worldwide. Xossing ranks fifth in western world "ranium production, with a share of 9.5 percent of world output. Gold Fields of Namibia, a majority owned subsidiary of Golds Fields of South Africa is the country's main base metals producer operating four mines ano the Tsumeb smelter complex, while Iscor (the iron and steel c )rporation of South Africa) operates the Rosh Pinah lead/zinc mine. The sixth larger operation is the Navachab Gold Mine which was brought into production in December 1989. - 50 - Medium and small-scale operations 4.5 The mid-sized category inc!udes three operations with a labor force of more than 100 employees. The small-scale category comprises some 30 mines, each employing a work force of between five and 75 people. With the exception of one copper mine, one gold-silver mine and two mines, small-scale operations extract non-metallic minerals. Four of these operations produce diamonds. the others mine a variety of industrial minerals and semi-precious stones. 4.6 Informal artisanal mining has been active in Namibia for many years. It encompasses local individuals extracting comparatively high-value minerals from surface or near surface mineralizations. An estimated 750 individuals are engaged in tin ore extraction, for instance. Ore is recovered from shallow pits by a unique method of dry hand panning developed because of the shortage of water. In addition, several hundred 'idividuals mine semi-precious stones throughout Namibia. Recent Performance 4 7 Real value added in the mining and quarrying sector declined during most of tne 1980s, falling about 27 percent in that period. Mining's relative contribution to GDP also decreased, from 43.6 percent 1r. 1980 tco 31.7 pcr:ent in 1989, principally as a result of two factors: the depletion of high-grade diamond diLposits - which affected the production of diamonds - and the imposition of economic sanctions against the RSA - which affected the demand for utaniurn. As a result of diamond depletion, the average carat content of ore fell from 9 to 5 carats per 100 tons. Consequently, overall carat production fell by 50 percent, from 1.6 million in l980 to 0.8 million in 1990. Meanwhile, uranium production had to be cut back by 20 percent as a result of sanctions and their cffect on demand. 4.8 The mining sector also experienced a sharp decline in its contribution to Gross Domestic Fixed Investment. At 1980 prices, investmeiit dropped from Rl 12.4 million in 1980 to R70.6 million in 1989 - during 1982-1986, investment in the sector was only R15 to R40 nmillion a year. The drop in investment activity resulted principally from depressed mineral prices .nd economic uncertainty. The 1988-1989 turnaround was caused by an improvement in the prices for minerals/metals. However, new investment went primarily to sustain existing capacity and :)nly to a lesser extent for expansion. 4.9 Employment in the mining sector declined from about 19.8 thousand in 1980 to 12.8 thousand in 1989, equivalent to 5 percent of the total labor force. Mining's share of the total cash remuneration to emplovees (at current prices) declined from 17.8 percent to 12.8 percent over the 1980-1989 period. This decline in employment and share was gradual, with a small improvement in remuneration during 1987-1989 from a 10.5 percent to a 12.8 percent share in total remuneration. Improved efficiency, through the use of advanced technology, is the principal reason for the decline in employment, subsequently resulting in higher labor productivity. - 51 - 4.10 During the same period, mining's share of total exports fluctuated between 69.4 percent (1981) and 82.5 percent (1986). In current terms, mining exports increased from R908 million in 1980 to R2,026 million in 1989. Almost all mining products are exported to Western Europe, North America, Japan, and South Africa. Namibia is regarded as a reliable supplier of diamonds, uranium, and base metals in the world minerals' markets. 4.11 The mining sector's contribution to tax revenue fluctuated between a 26 percent share and 47 percent share of Namibia's total tax income during the 1983-1989 period. These figures represent the Corporate Tax as direct tax ane the Diamond Export Duty as an indirect tax. Additional tax revenues derive from the mining sector through a general sales tax, a non-resident shareholders' tax, and fuel levies. Hence, over the last eight years, the mining industry generated 36 to 57 percent of total tax revenue annually. Because tax revenue is based not only on the operating income generated by the mining companies but also on their capital investment programs--since capital expenditures can be deducted against the operating income--it is difficult to assess the figures for a trend. 4.12 In addition to its economic contribution, mining gives a major impetus to the regional and infrastructural development of Namibia. It is estimated that the mining sector uses 35 percent of Namibia's railway services and requires approximately 50 percent of Namibia's total power capacity. Growth Potential 4.13 Mining has been the Namibian economy's mainstay since the turn of the century. However, the sector's output has been stagnant for at least 10 years, and at present its growth potential is modest at best. Despite good geological potential, there has been a lack of exploration and mine development because of general uncertainty about the business environment. Before indepenuence, investors stoou on the sidelines awaiting the resolution of internal conflicts, since independence, they have been awaiting the new Government's articulation of economic and investment policies. 4.14 Looking to the future, the lack of exploration will result in a continuation of the stagnation over the next 3 to 5 years. Whereas CDM is confident that dia..ond production will reach once again a level of I million carats per year because two new mines will come on stream, the outlook for uranium is less encouraging. Although sanctions no longer hinder Rossing sales, Eastern Bloc sales of surplus material has depressed prices. Under these circumstances Rossing does not see an opportunity to secure additional contracts at acceptable prices and further production cutbacks might be necessary. With respect to base-metal production the future is uncertain, as production is not only dependent on exploration and development efforts to replace depleted deposits but also on the economics of the operations, which presently are marginal. 4.15 This is not to say that the long-term outlook is also bleak. Compared to other countries with a long mining tradition, Namibia is relatively unexplored. The country's geological structure, its vast land area suggert thai there is still considerable potential for the discovery of important new - 52 - mineral deposits, although perhaps not on the scale of the unique, world-class uranium and diamond deposits. 4.16 Also, Namibia is in an excellent position to take advantage of its potential. First, in addition to good sectoral policies, the country has a well established mining industry and an experienced and organized mining sector administration. Second, all of the large- and medium-scale mines and many of the small-scale operations use state-of-the-art technology and equipment. Third, due to their affiliation with major foreign mining companies, the larger Namibian companies, in particular, have first-class management and an intimate knowledge of global mineral markets - an essential ingredient of successful commodity marketing in a competitive world. Finally, the principal mining centers are served by an adequate transport infrastructure and a high-voltage power supply system. Electric powi-r supplied via a 7,900 km high-tension grid is among the least expensive in the world. The railroad network comprises almost 2,400 km of lines along a central north-south axis, linking the mining town of Tsumeb with both the Walvis Bay port and South Africa. Moreover, good road links serve all the existing mining districts. 4.17 However, in order for the country to realize its mineral potential and attract private investment funds, especially the high risk exploration funds, the authorities need to strengthen the business environment by providing a legal ftamework competitive with other mineral producing countries. There is some urgency in this endeavor, because the long lead times between mineral exploration and production suggest that even if higher investment rates were to take place now, the pay-off would not come before the middle of the decade. Suggestions for Strengthening the Business Environment 4.18 Namibia already has a business environment that is conducive to private sector activity. Also, some world-class players are already present in Namibia and have been for some time. Nevertheless, because Namibia is a new country without a "track record" and some of its neighbors have at times adopted policies inimical to private sector av Iivity, a strong policy statement would reassure the international business community of Namibia's intention and economic orientation. Already a lot has been done in this direction. The Constitution has clear statements, in February 1991 the Government organized a private sector conference, and in the mining sector the legislation is in the process of revision. The authorities recognize that the development of the sector demands careful and special treatment. 4.19 The authorities are quite aware that mining sector development requires, first and foremost, a stable economic environment to attract high-risk capital required. Second, that the Government guarantee the security of this investment to all miners alike--independent individuals and small, medium and large mining companies. And third, that the Government prepare a mining policy and strategy, which defines the role of Government and private industry in the sector and presents clear 'rules of the game" with respect to the applicable legal and tax framework. At present, the Government has promulgated a new foreign investment act, which addresses the security issues and i' reviewing the mining code and tax regime. - 53 - Mining legislation 4.20 The existing mining code and other legislation affecting mining, forms basically an appropriate legal framework to support mining and is adequate to ensure the health and safety of mine workers and the protection of the environment. However, to encourage high density prospecting and to eliminate delays in resource utilization, provisions should be introduced to eliminate the blocking of land for speculative purposes. To this end, both mining claims and mining areas should be limited in time. For mining claims renewable terms of 2 years appear to be appropriate, while terms of mining areas should be determined based on mining schedules to be submitted. Another change in this context is the limitation of the number of mining claims per prospecting license. In addition, mining claims should be tradeable, transferable to other parties subject to review only by the mining comnmissioner. Moreover, minimum work obligations combined with periodic reporting requirements should also be introduced for mining claims and mining areas. In legislation and practice, prospecting and mining grants she,, in each case be controlled in size and restricted to specific minerals. Furthermore, access to land by potential investors should be maximized by minimizing Government restrictions of land use and by enforcement of work obligations in licensed areas. Informal, artisanal mining should be legalized. Licensing assistance could be offered by temporary field offices of the mining commissioner with reporting rediirements kept to a minimum. Mining taxation 4.21 Tax regimes are a critical and highly sensitive aspect of the investment environment. Although a detailed examination of the tax regime is beyond the scope of this report - and producers consider Namibia's tax regime reasonable - the authorities should compare the competitiveness of the tax regime with regimes in other mineral exporting countries. The upcoming review of the tax code also should include an assessment of incentives to attract high-risk exploration funds from both local and foreign investors. Govemment Services 4.22 The authorities can stimulate the growth of the mining sector by providing appropriate services to the industry through the technical departments of the Ministry of Mines and Energy and other specialized institutions. Government services that would enhance, the sector's pe.formance include: * provision of infrastructure; a geological and topographical data base; * an inventory of dormant and abandoned mines, together with an assessment of remaining mining potential; and * manpower development programs. J.23 Energy and transport infrastructure, while excellent in urban centers and mining districts, is lacking in remote raral areas. Road density is particularly low in the northem and northeastern regions - Damaraland, Kaokoland, Ovambo, and Kavango. Low road density adversely affects - 54 - exploration and mine development, and construction of such infrastructure would accelerate the development of the mining sector. Of course, all such investments must havy the potential for adequate rates of return before being undertaken. 4.24 Comprehensive information on the mineral potential of the country is a key factor in attracting prospective mining firms. The Geological Survey's role is to generate, compile, interpret and disseminate relevant geological and resource-related information on Namibia. Its mandate should provide for the installation of a documentation center, including an up-to-date geological and topographical data base and a mineral inventory. Publication and distribution of geological maps of the country should be part of this information process. 4.25 The Directorate of Mining should continue to maintain unbureaucratic procedures for issuing permits while enforcing regulations related to work obligations and reporting requirements of all permits. This would ensure better access to mining rights for potential investors. The Directorate of Mining should develop appropriate environmental standards, including a set of regulations for their enforcement, and coordinate implementation with various public sector institutions. Any general statistical data base on mining industry activities should include an inventory of dormant and abandoned mines, and the properties listed have to be assessed with respect to environmental liabilities and their remaining mining potential. 4.26 Government support is required for manpower development to alleviate the nresent lack of skilled and professional personnel in the miriing sector. Despite a long mining tradition, skilled manpower is limited. In the informal segment, lac1; of training is one of the main reasons for inadequate productivity and unsuccessful product marketing, notably of semi-precious stones. In the formal sector of the mining industry, expatriate personnel hold a large share of the professional and technical management positions. In view of the shortage of trained manpower, the leading mining companies, notably CDM and Rossing, have established training schemes, primarily for their own needs. For example, more than 10,000 Namibians have completed special courses at Rossing, and CDM allocates 3 percent of its annual budget to training and education. 4.27 The establishment of a School of Mining technology at Arandis, a private initiative by Rossing with Government support, is a valuable contribution. The Government might consider providing scholarships at institutions in neighboring countries. 4.28 Government services that would enhance not only the sector's growth performance but also its contribution to employment and poverty alleviation include (albeit in a limited way): * technical assistance to small-scale entrepreneurs; * formation of producer organizations in areas of high density artisanal mining; * geological support to improve skills of small-scale miners in identifying target areas; * provision of equipment in the form of plant-hire schemes on a cost-recovery basis; and training in marketing of semi-precious stones. 4.29 Although technical assistance to small-scale mining in general is difficult and often ineffective, in the case of Namibia this type of technical assistance is justified in view of the lack of - 55 - job opportunities in other mining segments. A technical assistance program should iaclude on-site geological support to improve the skills of miners at identifying promising target areas. Where geological indications are favorable, the introduction of basic equipment should be encouraged to enhance labor-productivity. This has to be complemented with an on-the-job training program in the use and maintenance of the equipment. The equipment should be used by members of the producers association on a co-operative basis or individually according to a rotating schedule. Provision of equipment should preferably be according to a plant-hire scheme, on a cost-recovery basis, and administered by a Small Mining Services Unit established in the Ministry of Mines and Energy. 4.30 One of the major constraints on small entreprerieurs is their limited access to commercial bank loans. Technical assistance to assess workable reserves as a basis for the preparation of a report acceptable to banks would improve the position of entrepreneurs in obtaining project financing or attracting equity capital. 4.31 Artisanal miners extracting semi-precious stones require additional assistance in product marketing. This should be primarily basic training in the valuation of gemstones, as well as in providing independent price recommendations. With this assistance, miners will be able to market their products through established gemstone traders at a fair price. 4.32 The Government needs to strengthen the institutions that provide these services. The Geological Survey and the Directorate of Mines, in particular, will require additional staff and budget to implement and enforce Government policies. - so - V. AGRICULTURE Introduction 5.1 Agriculture is by far the most important employer in Namibia, supporting directly or indirectly some 70 percent of Namibia's population. Communal agriculture provides employment to about 300,000 people, more than half of the economically active populat;1.000 NA Medium Coat. 10. Detours & SmaBer Woris 200,000 NA NA NA NA NA Medium I1. HP817 Katima Mutll- 240,000 28,240,000 60 31.46 15% 70 13.0% Medium Ngoma Feasibility Study-Coat. 12. TR814 Rutdu-Divundu 4,000,000 20,000,000 70,000,000 147 27.90 11% 250 10.1% Medium Other Proiems from Gweral Overview Study 1,000,000 NA NA NA NA NA High 13. Maintenance MgL"ut Sytem (2 ym) 14. Road User Carge Study Namibia: Annex Table 5.2 (Continued) 1990/1991 Approved Budget Total Cost Length of Road Ratio of Costs to Rate of Growth First Year Internal Rate of Priority (Kms.) First Year of Benefits ADT Economic 199091 1991192 Benefits Return 15. Replacement of Obsolete 9,000,000 25,950,000 NA NA NA N.A NA Medium Graders9,000,000 100,000 35,250,000 103 19.22 12% 260 14.4% Medium 16. Paving of Main Road 55 Gobabis-Buitepos 17. Study of Roads in 300,000 NA NA NA NA NA Medium Herreroland 18. Bridge over the Zambezi 450,000 31,650,000 N.A. 67.50 15% 50 9.7% Low River at Katima Mullilo 19. Bridge Over Chobe River 3,150,000 N.A Not Estimated Not Estimated 20 Not Estimated Low 20. Feasibility Study/Master 200,000 NA NA N.A. N.A NA. Medium Plan in Caprivi 21. Divundu-Kongola (Trans- 90,600,000 195 53.02 15% 75 9. 70 Medium (costs Caprriv Highway) must be lowered) 22. Paving of Trunk Road 4/1 36,750,000 103 17.40 6% 75 9.2% Low Goabeb-Aus 23. Improvement of Main undetermined NA N.A N.A N.A NA Low Road 44-Swakopmund-Henties Bay 24. Improvement of Road 2301 undetermined NA N.A N.A N.A N.A Low Henties Bay-Terrace Bay 25. Alternative Route undetermined NA NA N.A. NA NA Low Windhoek-Walvis Bay 26. High Standard Road Walvis undetermin2J NA NA N.A. NA NA LOw Bay-HentiesBay-Uis-Xhorixas- Kamanjab-Ruacana NA hiotes information not available for benefit or cost estimation purposes. - 172 - Road Transport Allocatious 5.6 This section compares road infrastructure expenditures to user tax revenue contributions of light and heavy vehicles. Because of data limitations on the avcrage daily traffic of several types of light and heavy vchicles or, Namnibian roads, it has been necessary to restrict the analysis to solely two vehicle types: light (autos, vans and utility vehicles) and heavy (buse,s ries, and articulated trucks) vehicles. Allocation of Road Expenditures 5.7 Road maintenance expenditures are the single most important item in road transportation expenditures presented in Table 5.4. The maintenance costs are to some extent a function of the vehicle axle loads that the roads mus support. Following the american cost allocation practice, :/70 percent of the road maintenance costs are allocated proportional to equivalent single axle 18,000 lbs. loads (ESAL) for a variety of vehicle types §/ whose specifications are presented in Annex Table 5.5. The remainder 30 percent are incurred as function of weather and/or the mere passage of time. Tiese weather and/or time dependent maintenance costs are allocated in proportion to equivalent daily traffic volumes, where following conventional capacity assumptions heavy vehicles are equivalent to 1.5 light vehicles. Annex Table 5.5 presents the estimation of the ESAL factors for vehicles and traffic compositions representative of Namibian conditions.2/ 5.8 The allocation of road construction costs presented in Annex Table 5.6 distinguishes pavement costs from other costs, such as clearing, grubbing, earthwork and dra; ,ge costs. The pavement costs are assumed to represent 70 percent of the road construction budgets and are allocated in proportion to the ESAL factors presented on Annex Table 5.5. The other road construction costs are assigned in proportion to the equivalent average daily traffic. 5.9 Allocation of all the other road expenditures in the budget are presented in Annex Table 5.5. Expenses on control of road traffic are assigned in proportion to the number of transport 5/U. S. Department of Transportation. Federal Highway Administration. Capital Cost Allocations and User Charge Structure Options. Highway Cost Allocation Study Working Paper No. 12. Washington D.C. July 1981, page 73. /The vehicle specifications recommended by the Namibia Department of Transportation come from: H. W. du Plessis and U. A. Rust. A Vehicle Operating Cost Model for Southern Africa: Draft User's Manual. Report No. DPUT-C23.1. National Institute for Transport and Road Research (CSIR) Pretoria, South Africa. September 1988, pages 26 and 27. /Te Namibia Department of Transportation's traffic counts show that light vehicles account for 85 percent of traffic on Namibian roads. Assuming a vehicle equivalence factor of 1.5 light vehicles per heavy vehicle, light vehicles account for 79 percent of the equivalent average daily traffic. - 173 - vehicle permits issued. 'he number of vehicle permits was estimated as 553 taxis and 558 trucks, buses and lorries. This later figure was developed from the SWEC7O Report.5/ Allocation of Road User Tax Revenues 5.10 The two main sources of user tax revenues are the fuel levy and the vehicle licenses and fees. Tie revenuc from fuel levies are allocated in Annex Table 5.3, following the assumption that light vehicles are 85 percent of the average daily traffic (ADT) on Namibian roads, and that articulated trucks are 30 percen. of the heavy vehicle traffic. The allocat-on of revenues from vehicle license fees is nresented in Annex Table 5.7, where the revenue contribution of heavy vehicles is assigned as a residual Annex Table 5.8 presents the allocation of all the Transport Departmental revenues incidental to road transportation. Annex Table 53 Namibia: Allocation of Fuel Levies Financial Year Ending 31 March 1991 % Average Average Fuel % Total Fuel Fuel Levies Daily Traffic Consumption Per Consumption Paid Kilometer (Litters) (Rands) Light Vehicles 85% 210 70.55% 84,660,000 Heavy Vehicles' 15% 500 29.45% 35.340.000 100.0% 120,000,000 "Assumes that articulated trucks account for 30 perce.t of the heavy vehicle traffic, a figure that is supported by the estimates of numbers of vehicles presented in Annex Table 5.7. Cost Recovery by Vehicle Class 5.11 The percent cost recovery by vehicle class is presented in Annex Table 5.8, which shows a cross-subsidy between vehicle types. Light vehicles are overpaying their fair share of costs, /SWECO. Transport and Communications in Namibia. Prepared for the Ministry of Works, Transport and Communications of the Republic of Namibia. March 21, 1990, page 85. - 174 - paying 136 percent of their allocated costs, whereas heavy vehicles pay only 53 percent of their share of allocated costs.2/ 5.12 This analysis of costs and user taxes supports the conclusion that light vehicles are subsidizing heavy vehicle traffic, with concomitant adverse effects on road/rail transport competition. Either the user taxes on heavy vehicles are significantly increased, perhaps doubled, or the level of road maintenance activities are reduced to a level in balance with the user tax contribution of the heavy vehicle sector. Annex Table 5.4 Namibia: Estimation of Transportation Expenditures Financial Year Ending 31 March 1991 (in Rands) Current Expenditures Road Transport Civil Aviation Other 01 Transportation Administration 14,984,000 02 Construction of Roads and Airports 1,491.500 03 Maintenance of Roads and Airports 66,519,800 04 Control of Road Traffic 5,032,500 05 Control of Civil Aviation 7,863,900 06 Control of Water Traffic 100,000 07 Provision and Maintenance of Equipment 33,614,800 08 Provision of Meteorological Service 1,733,600 09 Planning and Design of Roads and Airports 2,584,800 10 Government Garage 9,400,000 133,627,400 7,863,900 1,833,600 Capital Expenditures Eros Airport-Erection of Plane Sheds 235,000 Road Construction Projects 17,897.000 151,522,400 8,098,900 1,833,600 Source: The budget figures come from State Revenue Fund. Emeof revenue nd eqxndim for the Financial Year ending 31 March 1991, pages 201-212. 2/Ibis aliocation uses vehicle fleet figures th;at come from the Naimibia Department of Economic Affairs. Econ Info 1990, page 22. If the larger 'v.'icle fleet figures contained in the SWECO report (page 83) are used, the cost recovery from heavy vehicles is less than 53 percent. Annex Table 5.5 Namibia: Estimate of Equivalent Single Axle 18,000 lb. Load Rates (ESAL) Vehicle Types Tare Payload Total Average Average ESAL Percent Proportion ESAL Percent (Kg) (Kg) Weight No. of Weight Load Vehicles Average Loads Allocation (Kg) Axles Per Axle Factor by Class Daily Per Km ESA Load Traffic of Road,Vehicles Krms Small Car 960 400 1,360 2 680 0.038 34.4% N.A. N.A. N.A Medium Car 1,200 400 1,600 2 800 0.044 34.4% N.A N.A N.A Pickup & Minibus 1,430 1,400 2,830 2 21,415 0.079 31.2% N.A N.A. N.A. Total Light Vehicles 2 950 0.053 100.0% 0.85 0.090 31.0% Bus 6,050 4,500 10,550 2 5,275 0.293 4.6% N.A. N.A. Medium Truck 5,020 11,000 16,020 2 8,010 0.445 36.2% N.A N.A. Heavy Truck 6,400 16,000 22,400 3 7,467 0.415 36.2% N.A. N.A. Artic. Truck 14,700 32,000 46,700 5 9,340 0.519 23.0% N.A. N.A Total Heavy Trucks 3 7,994 0.444 100.0% 0.15 0.20 69.0 'Estimated as the product of the number of axes times the equivalent single axle 18,000 lbs. load factor times the proportion of average daily taffic. NA denotes information not available. Annex Table 5.6 Namibia: Road Expenditure Aflocation Summary Financial Year Ending 31 March 1991 (in Rands) Expenditure Items Budget Costs Allocation Basis Light Heavy Vehicles Vehicles 02 Construction of Roads and Airports a. Pavement Costs (70%) 1,044,050 Equivalent Single Axle I c,us ,;,r 720,390 b. Clearing, Earthwork & 447,450 Equivalent Avg. Daily l'raffiL 353,490 93,960 Drainage Costs(30%) 03 Maintenance of Roads and Airport a. Dependent on Axle Loads (70%) 46,563,860 Equivalent Single Axle Loads 14,434,800 32,129,060 b. Dependent on Time & Weather (30%) 19,955,940 Equivalent Avg. Daily Traffic 15,765,190 4,190,750 04 Control of Road Traffic 5,032,500 Vehicle Permits Issued 2,516,250 2,516,250 07 Provision & Maintenance of Equipment 33,614,800 Equivalent Single Axle Loads 10,420,590 23,194,210 09 Planning & Design of Roads and Airports 2,584,800 Average Daily Traffic 2,197,080 387,720 10 Government Garage 9,400,000 Equivalent Single Axle Loads 2,914.0(30 6,486,000 Capital Expenditures for Road Construction a. Pavement Costs (70%) 12,526,500 Equivalent Single Axle Loads 3,883,220 8,643,280 b. Clearing, Earthwork & 5,368,500 Equivalent Avg. Daily Traffic 4,241,120 1,127,380 Drainage Costs(30%) 01 Administration 14,984,000 As Percent of the Sum of All 6,293,280 8,690,720 Other Costs 151,522,400 63,342,680 88,179,720 - 177- Annex Table 5.7 Namibia: Allocation of Revenues from Vehicle License Fees Financial Year Ending 31 March 1991 No. of Vehicles' License Feeb Total Revenue (Rands) From License Fees (Rands) Light Vehicles Motor Cars 13,445 72 986,040 Panel Vans 4,745 84 398,580 Minibuses 553 84 46452 19,538 1,413,072 He Vehicles Buses 398 N.D. Lorries, Trucks and Truck Tractors 6,214 N.D. 10,586,928c Trailers & Semi-Trailers 1,783 N.D. All Other 194 N.D. 8,589 12,000,00 "The vehicle fleet figures come from Namibia Department of Economic Affairs. Econ Info 1990, page 22. These figures conflict with a 1986 survey quoted in SWECO. Transport and Communications in Namibia, 21 March 1990, page 83. If SWECO's vehicle fleet figures are used, the cost recovery from heavy vehicles becomes lower than 53 percent. biTe license fees come from the Namibia Ministry of Finance. Office of the Receiver of Revenue. CDetermined as a residual. N.D. denotes not determined due to lack of data on the number of vehicles in each vehicle weight category. Annex Table 5.8 Namibia-. Road Transport Revenues Allocation Summary Financial Yeaw Ending 31 March 1991 (in Rands) Revenues Allocation Basis Light Vehicles Heavy Vehicles 30.01 Tax & Duties 12 Levy on Fuel 120,000,000 Fuel Consumption 84,660,000 35,340,000 30.03 License 05 Vehicles & Related Fees 12,000,000 Vehicle License Fees 1,413,070 10,586,930 31.21 DeRartment Revenues - Transport 02 Road Transport Board 300,000 Permits Issued 150,000 150,000 03 Traffic Services 100,000 Average Daily Traffic 85,000 15,000 04 Lost Equipment & Stores 200 Average Daily Traffic 170 30 05 Obsolete & Worn Out Equipment 400,000 Equivalent Single Axle Loads 124,000 226,000 Total Revenue Allocation 132,800,200 86,432,240 46,367,960 Total Cost Allocation 151,522,400 63,342,680 88,179,720 Surplus (Deficit) (18,722,200) 23,089,560 (41,811,760) % Cost Recovery 88% 136% 53% - 179 - STATISTICAL APPENDIX - 181 - STATISTICAL APPENDIX TABLE OF CONTENTS I. NATIONAL ACCOUNTS 01. Gross Domestic Product by Industrial Origin (Million Rands) 02. Gross Domestic Product by Industrial Origin (Million 1980 Rands) 03. Gross Domestic Fixed Investment by Kind of Economic Activity (Million Rands) 04. Gross Domestic Fixed Investment by Kind of Economic Activity (Million 1980 Rands) 05. Expenditure on Gross Domestic Product (Million Rands) 06. Expenditure on Gross Domestic Product (Million 1980 Rands) 07. Savings and Investment (Million Rands' 08. Gross National Product (in Million Ra:.ds and Million 1980 Rands) 09. Gross Domestic Product by Industrial Origin (Million Rand) (Revised Data published May 1991) 10. Gross Domestic Product by Industrial Origin (Million 1980 Rands) (Revised Data published May 1991) II. BALANCE OF PAYMENTS AND TRADE 01. Balance of Payments 02. Exports by Commodity 03. Exchange Rate, Rand/US Dollar 04. Foreign Trade: Indices of Value, Volume and Prices III. PUBLIC FINANCE 01. Structure of the Non-Financial Public Sector 02. Public Accounts A. Corsolidated 1st, 2nd and 3rd Tier Government Expenditures, Fiscal Year 1980/81-1986/87 B. Central Authority Financial Operations, Fiscal Year 1981/82-1991/92 C. Central Authority Revenue Receipts, Fiscal Year 1981/82-1991/92 D. Central Authority Revenue Receipts (Percentage Shares) Fiscal Year 1981/82-1990/91 E. Government Approved Establishments, June 30, 1983 to August 1990 F. Functional Distribution of Central Authority Expenditure, Fiscal Year 1985/86-1990/91 03. Summary Accounts of Major Public Sector Entities A. The Academy B. Namibian Broadcasting Corlj..ration (NBC) C. TRANSNAMIB Ltd. D. South West African Water and Electricity Corporation (SWAWEK) E. First National Development Corporation (FNDC) 04. Namibia: Medium-Term Fiscal Projections 05. Central Government Financial Operations: Medium Term projections 06. Central Government Debt and Debt Service: Medium Term Projections - 182 - IV, MONEY, BANKING, CREDIT AND_PRICES 01. Indices of Consumer and Food Prices, 1980-1989 02. Assets of Commercial and Genera. Banks, 1980-1989 03. Liabilities of Commercial and General Banks, 1980-1989 V. EXTERNAL DEBT 01. Outstanding Debt and Debt Indicators of the Central Government, 1981182-1989/90 VI. SOCIAL AND DEMOGRAPHIC DATA 01. Demographic Data A. Population Estimates by Population Groups, 1980-1988 02. Education A. Primary and Secondary Teachers According to Qualifications, by Education Administration, 1988 B. Revenues and Expenditures, Including Education, by Administration of Representative Authority, 1986/87 C. Education Expenditure in Rands per Pupil, 1986 D. Education Profile: Summary 1988 E. Education Profile: Summary 1988 (con't) F. Educational Institutions 03. Health A. Expenditures on Health Administrations, 1988/89 B. Distribution of Health Facitilities as of March 1989 C. In-patient Capacity in the Administration for Whites Health Facilities (1 April 1988 - 31 March 1989) D. Medical Personnel, 1989 VII. SECTORAL OUTPUT INDICATORS 01. Agriculture Sector A. Agricultural Production B. Cattle Sales and Slaughter C. Agricultural Exports and Imports D. Distribution of Land in the Communal Agricultural Sector 1982 E. Population and Agricultural Activities in Communal Areas 1989 F. Recent Trends in Agriculture (1980-1989) G. Agricultural Production, 1989 (Commercial Sector Only) H. Livestock Market Flows 1979 to 1989 I. Agricultural Credit: Outstanding Loans to the Commercial Sector by Source and Year (1981-1989) J. Subsidies on Agricultural Credit (1980-1990) - 183 - K. FNDC's Mini-Loan Scheme: Interest Rates Charged L. Maize Price Trends (1985-1990) M. White Maize: Namibian Import Parity Prices with Zimbabwe And the Rest of the World and Their Nominal Protection Coefficients N. Namibia's Import and Export Parity Prices for Maize (1985-1990) 0. Production Cost of Pearl Millet Per Hectare P. Agricultural Growth Projections (1990-1995) 02. Fishing Sector A. Retail Prices for Fish Products (Windhoek, June 1989) B. Raw Material Input and Utilization in the Fish Processing Industry, 1985 C. Total Catch in Namibia (1977-1987) D. Lobster Landings (1950-1988/89) 03. Mining Sector A. Mining Production According to Commodity, 1983-88 B. Operating Mines and Quarries, 1989 C. Index of Physical Volume of Mineral P7oduction, Summary; for Selected Years, 1950 to 1988 (1975=100) D. Value of Mining Sales by Commodity, 1988 E. Volume and Price Indices of Mineral Exports, 1970-1988 F. Employees and Salaries in Mining Industry 1975 to 1988 a/ G. Profits, Tax and Expenditure of Namibian Mining Companies; For Selected Years, 1980-1988 04. Transport Sector A. Estimates of Vehicle Operating Costs in Namibia (Mid-1990) B. Estimate of Equivalent Single Axle 18,000 lb. Load Rates (ESAL) C. Estimation of Transportation Expenditures, Financial Year Ending 31 March 1991 D. Estimation of Revenues -- State Revenue Fund, Finan(.al Year Ending 31 March 1901 E. Road Expenditure Allocation Summary, Financial Year Ending 31 March 1991 F. Allocation of Revenues from Vehicle License Fees, Financial Year Ending 31 March 1991 G. Aircraft Movements and Passenger Activity at Selected Airports VIII. EMPLOYMENT AND WAGES 01. Manpower Survey, 1988 02. Manpower Survey, 1984 03. Employees and Salaries in the Mini.ig Industry, 1980-89 04. Employment and Number of Manufacturing Industries by Type of Industry, 1989 - 185 - Table I.01: NAMISBA - GROSS DOMESTTC PROOUCT-Y rNDUSTRIAL ORrcrI DN CURRENT PRICES (Million Rands) -------- ------- ------- ------- ------- -------------------__ _ _ _ -____---_-- -----_-_*-----"----__---____________ 1l8a 1981 1982 1983 1984 1986 1986 1997 198l 1989 Agriculture a/ 168.3 217.3 204.8 188.4 167.4 108.7 228.7 J82.6 489.6 489.6 Mining and Quarrying 830.0 464.4 485.6 473.3 610.4 908.1 1681.2 767.2 1061.8 1265.7 of which: Diamond mining 364.6 186.3 143.1 174.9 Uranium mining 189.0 188.4 243.7 190.5 Other mining 96.4 79.7 78.8 107.9 Monufactur;ng 66.6 87.2 82.7 93.6 102.3 113.2 182.0 156.6 179.3 210.3 Electricity A Water 28.3 38.4 38.6 52.1 48.6 49.6 63.9 63.0 76.7 77.2 Construction 60.8 87.3 89.8 84.6 61.0 71.3 80.1 83.7 99.4 111.3 Trado, Hotels, etc. 166.3 204.9 228.4 234.9 266.6 282.8 328.4 382.7 449.4 632.8 Transport A Communications 78.7 78.3 83.8 107.8 137.2 139.6 175.2 204.1 229.7 286.0 Finance a Real Estate 77.0 88.2 111.8 127.S 163.0 176.9 184.8 217.8 283.7 811.2 Community Services 18.6 24.1 2e.8 36.1 41.3 46.9 64.1 62.7 72.6 86.1 Govornment 138.8 227.1 316.3 368.8 427.3 479.3 666.6 716.1 764.8 856.7 Other Producors 37.0 40.9 49.5 FA.3 84.6 74.4 83.7 97.7 111.8 129.4 GDP at Factor Cost 1444.1 1506.1 1879.8 1779.0 1969.7 2640.6 2927.6 3112.6 3787.2 4326.2 Not Indirect Taxos 117.4 103.6 114.6 100.0 142.9 201.1 268.6 289.1 640.6 664.2 GDP at Market Prices 1681.5 1609.7 1794.2 1879.0 2112.6 2741.7 8186.1 8401.7 4307.8 4980.4 NOTES: Voluoo shown oxclude Walvis Bay. a/ lncludee fiching. SOURCE: 0Stotisticel/Economic Review: Naemblaw, Department of Finance, Namible. - 186 - Table 1.02: NAMIDIA - GROSS DOMESTIC PRODUCT BY INDUSTRIAL ORIGIN (MiI lion 1980 Rand.) 1980 1981 1982 1983 1984 1986 1988 1987 1988 1989 Agriculturo a/ 166.3 171.8 166.6 121 1 107.8 118.7 116.8 149.1 161.1 166.9 Midning 6'd Quarrying 630.0 669.0 608.8 499.3 483.2 487.6 499.7 488.2 493.0 461.6 of which: Diamond mining 364.6 177.7 120.1 134.1 Uranium mining 169.0 179.7 204.6 146.1 Other mining 90.4 78.0 86.1 82.7 Manufacturing 66.6 56.4 81.2 02.6 62.1 69.9 60.6 81.4 62.2 67.9 Electricity & Water 26.3 27.8 29.2 30.6 31.6 32.3 32.9 33.2 34.9 38.1 Construction 60.6 80.2 63.0 48.1 88.2 88.4 32.1 $8.2 33.9 81.8 Trade, Hotels, ete. 168.3 175.6 180.8 166.6 186.6 188.7 167.6 178.6 180.4 186.9 Transport A Communications 78.6 70.3 86.8 70.8 77.8 77.8 82.0 83.7 83.4 92.1 Finance A Real Esta+, 77.0 74.3 75.7 77.8 7906 86.8 82.8 86.S 88.6 88.0 Comunity Services 18.8 22.8 23.8 25.0 26.2 26.6 28.6 27.4 28.0 28.4 Covernment IA.S8.R 183.1 218.6 229.8 236.7 241.7 247.4 253.8 260.9 26e.4 Other Producers 3'7 d 36.0 37.1 38.4 89.9 40.8 41.9 43.8 44.7 46.9 GDP at Factor Cost 1A44.1 1438.3 1409.6 1384.8 1848.8 1346.1 1390.6 1432.4 1467.6 1469.9 Net Indirect Taxes 117.4 156.9 107.8 106.2 84.8 188.0 244.0 177.6 248.1 175.0 CDP at Morket Pricee 1601.6 1692.2 1616.9 1469.6 1481.1 1629.9 1634.6 1616.0 1706.1 1684.9 GDP Deflator (X) b/ 1.U 1.0 1.2 1.8 1.6 1.9 2.1 2.2 2.6 8.0 NOTES: Valuea ahown exclude Walvis Bay. u/ Includef tfshing. b/ Computed using current GDP %octor cost divided by conetonnt GDP at factor coat. SOURCE: OStaetitical/Economic Revlova: Naablao, Deporsttnt of Finonco, Nomiblo. - 187 - Table 1.08; NAMrSrA - GROSS DOMESTIC FIXED INVESTMENT BY KITND OF ECONOMIC ACTIVITY (Million Rands) 1980 l981 1982 1983 1984 1985 1988 1987 1988 1989 Agrtculture */ 22.2 24.2 27.9 30.0 29.0 30.7 36.6 43.0 46.6 67.6 Mining wnd Quarrying 112.4 74.8 47.8 40.8 31.9 31.9 76.3 94.6 170.8 249.3 of which: Diamond mining Uranium min;ng Manufacturing 15.8 23.0 8.0 9.9 10.0 9.6 9.0 8.7 9.0 18.1 Electricity A Water 14.1 38.8 30.4 21.4 6.4 6.9 9.6 6.1 .0.8 14.0 Construction 15.5 1a.4 18.2 10.0 10.1 6.3 6.5 7,6 10.1 11.8 Trade, Hotels, etc. 12.0 17,2 18.6 12.0 14.3 17.3 17.7 19.8 26.0 33.3 Transport A Communications 26.9 82.2 39.6 37.3 25.7 3656 31.9 39.2 34.0 32.3 Finance A Real Estate 13.2 12.8 20.7 26.7 38.7 32.8 34,8 68.9 97.8 140.1 Community Services 3.7 8.2 9.6 6.4 6.8 8.o 8.8 6.0 11.9 12.2 Government 202.8 194.8 199.8 168.4 1665. 198.7 193.8 21..9 240.3 238.3 Gross Dom. Fxd. Inv. 437.1 437.2 420.8 380.9 326.2 377.6 422.0 501.2 666.2 806.2 NOTES: Values shown exclude Walvis Bay. */ Includes fiching. SOURCE: StatistIcal/Economic Review: NamtMaO, Department of Finance, Nauibia. - 188 Table 1.04: NWIWXA- - GM& DOMESTIC-F!XD WINESTMENT BY KXNI OF ECONVC ACTIVITY (MillIon 1980 Rondo) _-____--_ ------ _-_------- _- ------ ----------------- ----------------- ----------------- ----------------- 1980 1981 1982 1988 1984 1986 1988 1987 1988 1989 ------------------------------------------ -- _-- -------------------- __--------- ---------------------------- Agriculture a/ 22.2 21.3 21.1 20.2 18.1 18.3 16.8 18.4 16.8 16.8 Mining and Quarrying 112.4 68.0 36.6 27.8 19.8 16.8 31.8 36.3 68.1 70.8 of which: Diamond mining Uranium mining Manufacturing 16.8 20.3 8.7 6.8 6.4 6.1 3.8 3.3 8.0 4.6 Electricity & Water 14.1 31.9 22.7 14.0 8.2 8.8 4.3 2.4 8.6 4.2 Constructlon 16.6 12.0 14.1 6.9 8.6 3.3 2.2 2.8 8.1 3.0 Trade, Hotels, *tc. 12.0 16.2 14.1 8.1 9.1 9.1 7.4 7.6 8.3 9.6 Transport A Communications 26.9 28.0 29.6 24.2 16.2 18.2 13.0 13.6 10.4 8.4 Finance A Real Estate 13.2 11.1 16.3 16.7 28.0 17.1 16.7 23.5 83.7 41.2 Comunity Sorvices 3.7 7.3 7.4 8.7 8.7 4.2 8.8 2.6 4.0 3.5 Government 202.3 188.8 148.6 109.6 92.1 103.4 07.9 86.6 82.9 70.4 Gross Dom. Fxd. Inv. 437.1 381.9 316.9 237.9 197.1 197.1 186.6 194.9 222.4 232.0 GDI Deflator b/ 1.0 1.1 1.3 1.8 1.7 1.9 2.3 2.0 2.9 3.6 Values shown exclude Walvis Bay. o/ Includes fishing. b/ Calculated by taking Gross Domestic Fixed Investment In current terms divided by Gross Domestic Fixod Investment in constant terms. SOURCE: 0Statistical/Economic Review: Namib;a° Department of Finance, Windhoek. -- 189 - Toble 1.05: NAM181A - EXPENDITURE ON GROSS. DOMESIC PROWT (Million Rands) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 -_ --------------_-_---_----------~--------- -------^ -----_ ----_ ---_ -__ --_ -__ ---__--_v__------------------- Total Consumption 974.8 1422.3 1679.7 1821.3 2026.f 2299.2 2858.1 3272.8 3738.8 4213.6 Private Consumption 717.1 1017.6 1189.3 1264.3 137E.0 1623.1 1719.2 2130.2 2431.4 2798.7 Gov. Consumption 267.7 404.7 490.4 657.0 660.0 778.1 938.9 1142.6 1307.2 1414.9 Gross Dom. Fxd. Inv. 437.1 437.2 420.0 380.9 328.2 377.8 422.8 511.2 666.2 006.2 Public Authorities 239.6 236.2 261.2 210.6 186.2 233.6 223.2 263.2 268.9 267.0 Cen. Departments 202.3 194.8 199.8 168.4 156.3 198.7 193.8 216.9 240.3 239.3 Pub. Businoe Ent. 37.3 41.4 61.6 42.2 29.9 34.8 29.4 36.3 2e.C 19.6 Public Corporations 20.4 62.1 6016 35.6 20.3 26.6 30.6 29.1 49.0 53.8 Private 177.1 148.9 119.1 114.8 120.1 118.6 189.0 218.9 339.3 493.e Chango in Stocks 80.9 69.1 -6.7 -27.3 37.6 6.4 -16.7 38.4 214.4 22.1 Total Investment 618.0 498.3 416. 383.8 383.7 383.0 406.1 630.6 889.6 827.3 Gross Domestic Expenditure 1492.8 1918.6 2094.8 2164.9 2388.7 2682.2 3004.2 3812.4 4608.2 6040.9 Exports CNFS 1148.9 983.8 1081.9 979.6 1144.7 1621.8 2028.3 1827.3 2177.7 2731.4 Imports ONFS 1080.2 1292.7 1362.5 1265.4 1420.8 1682.3 1906.4 2288.0 2478.1 2791.9 Resource Balance 68.7 -308.9 -300.0 -276.9 -276.1 69.6 121.9 -410.7 -300.4 -60.6 Expenditure on GOP 1681.6 1609.7 1794.2 1879.0 2112.8 2741.7 3186.1 3401.7 4307.8 4980.4 -----------------------------------------__-_0____0____________________________________________00 -- SOURCE: OStatistical/Economte Review: Namible, Department of Finance, Windhoek. - !90 - Table .06! NAMIBIA - EXPENDITURE ON CROSS DOMESTIC PROOJT -------_________------------------------------- (MilI;on 1990 Rands) 1990 1981 1982 1983 1984 1986 1998 1987 1988 1989 ;onsumpt;on 974.8 1220.6 1242.0 1201.1 1216.8 1235.4 1254.0 1348.0 1389.2 1368.2 -;nte 6Consunmption 717.1 886.4 898.9 861.3 848.8 844.6 863.0 943.0 947.6 961.1 (,cv. Consumption 267.7 334.1 346.1 349.8 368.8 390.9 401.0 403.0 421.7 406.1 'vk.ov DOn.. Fxd. InV. 437.1 381.9 315.9 237.9 197.1 197.1 186.6 194.9 222.4 232.0 Kh.blic Authorities 239.6 206.1 187.5 137.3 110.3 121.4 100.1 99.6 91.4 76.9 Public Corporations 20.4 45.4 37.9 23.4 12.6 13.4 13.5 11.4 18.5 16.3 rf ivnto 177.1 131.4 90.6 77.2 74.3 62.3 71.9 83.9 114.6 140.8 Chctro 'in Stocks 80.9 P7.7 -9.7 -19.8 30.1 1.9 -7.6 18.9 96.6 6.0 'otrl Investment 618.0 449.6 308.2 218.1 227.2 199.0 178.0 213.8 318.9 238.0 (,r1 Total Investment 618.0 496.3 416.1 833.6 363.7 383.0 406.1 639.6 869.'6 ti 3 Domwstic Saving 606.1 427.3 448.2 499.9 616.4 728.0 966.7 648.6 716.2 92G.0 Personal Saving 71.8 62.9 66.6 64.? 6.6 86.3 69.6 91.4 86.11 80.2 Corporate Saving 207.0 178.9 148.8 222.1 109.4 270.1 242.7 86.1 212.S 982.1 Government Saving 130.9 77.9 130.9 86.8 207.6 281.2 604.8 208.7 238.. 303. Proy. for Depreciation 96.4 107.6 118.0 126.8 182.9 140.4 149.6 162.4 1809. 20k.7 Not Foreign Borrowing 12.9 69.0 -38.1 -166.3 -162.7 -846.0 -660.6 -9.0 16s.o ..P('.7 Total Sevings 618.0 496.8 416.1 838.6 868.7 888.0 406.1 639.6 Of ; 3 SOURCE: Statistical/Economic Reviow: Namibia", Department of Finance, Windhoek. (Mill iou Ihudi' ru2 ITI I I "N U llOflhiCfrAlPflt 0< cnurapIov 0! ci n1. o . : 63. y (,jo I I1 I YIW' . U I IU I .1. 7?A ' : 1>6. >04, tL 221W .0 ojjc't i ~>.,( : , &1. Vv o. CIO0. .o, Ž;, :'.e0'I1909. NMot mi u 71f,-jP0.? X '/,. 6y 211 0< ',:. "'br, Gosm01( Nkt i umli Pvu'duct ),P,4108 L;.,I 0;0o5 s 2 .vS( 7 i' Volt t394 GNP (19501 conotont.) 193, 4, :o3 22>' .' 0 ..t. o S. . [' 1 200. r. / ttem,unoro,I on oC cus yc Wt C . I 031 ~Sn5ot~ can I /Fl'onoa n I a R vi c I]: 1. on. i I!~¾ is L.A\ (' AH i .w1 ' YIt 1b cl.0): t'-A>1IIlIA - Of)SC> 151140A ICIf..',,c0:ji. (Qli L I i1ai 1T-U 1991,t, 1931 192v7 19Fs If 1M35 W9& 193? 1'? 193 (. ,-.atirki, 4.xl $t"pl . !ii,,? '8.i Zst X,). '42 . 65. 1 7 ,; ir 1214.8 1 6%v.: I". t v (Ia fl; ff cut o / 1r '¼.. 1./' ,' 5/.' 1 5' t2) I's8.0 29O0, 358? ; .i' Pxwis ic/f9D- -U. riat n 93.4 11.6 1155.3i l26). 1 'i 110.4 149.6 16S.4 13.3 .A.f - :llil'' . 1/' 5i,., , '. 2 -, :. .?. :25 26 .e ',Ž.^: I'1rc i.Th^ i.t . <. 15 / i1->>> 3 ^J 25;y 22; 9-3775-3.ts at.', > ' ?at Itou Oc.t. 12?1. 14034 154.9 '707.6 18P7. ,2279 2607.9 291b.9 5S36. 324.0 U at twrketi fnrirc, 1561.S, 1609.7 1794.2 1379.0 2112.6 2741.7 3186.1 :4 l401.7 /307.8 49.'k50 tnt Fcztoa- Irczac -152.2 0 I 152. 16.4 -19.0 -2Yf, 31087 19,5.7 i99.8 -32c., Cnxa ift P'JV;C%-DL rccf-mx (@2) 1,433.7 1507.0 'I42'.1.5 ' 9 4 V&; 1 291 0 2 . 6. 3260.0 3960.0 4608.? Eci [X(srzl-;ai ic of u0ployacs_ ' 4 02ja :rJ SUO p)la. 9S CtC'; "Statistica'/Eauninc RP.viLvo: SVM-lm'.ibul'; Oqrtnnt4 ri. I in- A 2:. - 194 - Table 1.10: NAMIBIA - GROSS DOMESTIC PRODUCT BY INDUSTRIAL ORIGIN -----------------------------.----------------------- (Million 1980 Rands; May 1991 Update) …----------------- ----------------- ----------------- --------- __------- ---__------------ ----------------- -PROJECTIONS- 1983 1984 1986 1988 1987 1988 1989 1990 1991 1992 AgriCulttUrO 118.7 109.4 113.0 117.0 147.1 143.7 160.8 165.6 163.9 170.2 of vhsch: Commormial 100.9 91.. 94.1 97.5 127.0 123.1 189.4 134.7 141.4 147.2 Subeoltonco 17.8 18.8 18.9 19.6 20.1 20.6 21.2 21.9 22.5 23.0 Fishinf! 20.2 18.2 22.6 19.8 22.1 27.9 17.6 74.4 81.8 85.1 Mining nrc (t-rrying 499.8 483.2 467.6 499.7 488.2 493.0 481.6 416.2 401.3 416.0 of vhich- Diamon6 rir;ng 237.7 .48.0 212.7 236.3 240.7 227.7 217.7 177.9 198.7 233.7 Other 0 ior. 281.6 286.2 264.8 288.4 247.5 265.3 243.8 238.3 202.6 182.3 Manufacturing 82.6 62.1 69.9 60.5 61.4 62.2 64.8 68.1 70.8 73.7 Fish Procoosine (Walvis Bay) 16.0 11.3 18.4 14.8 20.9 24.1 14.6 28.7 30.7 32.2 Electricity 8 Weter 30.6 31.6 82.3 32.9 33.2 34.9 36.1 38.0 39.6 40.7 Construction (contractors) 43.1 38.2 88.4 32.1 33.2 33.9 31.8 28.6 30.9 32.1 Whotosalo & Retail Trads a/ 166.0 186.6 163.7 167.6 173.6 180.4 186.9 188.3 193.0 197.8 Transport & Communications 70.8 77.8 77.8 82.0 83.7 83.4 92.1 96.7 103.0 108.1 Financo & Real Estate b/ 77.8 79.6 80.8 82.8 86.6 88.8 88.0 87.9 89.7 91.5 Community Services c/ 26.0 26.2 28.5 28.8 27.4 28.0 28.4 28.7 29.3 29.9 Generol Government 229.8 235.7 241.7 247.4 253.8 268.9 286.4 274.7 281.6 287.2 Other Producers 38.4 39.9 40.8 41.9 43.3 44.7 46.9 46.6 48.0 49.4 CDP ot Frctor Cost 1397.1 1378.4 1383.4 1424.8 1473.4 1601.7 1492.5 1533.5 1563.6 1613.9 NOTES: a/ Includes catering and accomodation. b/ Includes Insurance and business services. c/ Xncludes social and personal services. Estimates of the real CDP Include real value added emanating from subsistonce agriculture, as well to the real value added resulting from fish process ng in the enclavs of Walvis Bay. As from independence *al value added resulting from fishing in Namibia's extended EEZ is includod in GDP. Data for 1987 to 1989 are preliminary and subject to revision, while data for 1990 to 1992 should be regarded as tentative. SOURCE: "Economic Reviev Budget 19910. Ministry of Finance, Republic of Namibia, May 23, 1991. - 195 - Tablo 11.01: NM4IO!A - BALANCE OF PAYPUITS ----------------------------- (MFilion Rands) _____o ______-__-----___-_--- -_________-_---- -- -- -- -- --- -- -- -- -- -- --- -- -- -- _ _ --- -- -- -- _ _ _ -- -- -- -- -- - 1960 1981 1982 1983 1981 1965 1988 1967 1988 li Mrchandifao Eaportci 1138.0 948.7 1009.2 041.3 1101.1 1594.4 1994.0 1796.4 2140.9 267i Morclmnd;aO Itoorts -901.9 -1082.5 -1124.5 -1024.4 -1176.4 -1272.2 a S82.4 -1862.4 -2076.6 -2339 Trade lalance 238.1 -135.8 -115.3 -83.1 -75.3 322.2 441.6 -86.0 64.3 332 Not Nm-Factor Serv. -167.4 -173.1 -185.3 -192.8 -200.68 -262.7 -319.7 -304.7 -384.7 -39, Resounrce BalancO 68.7 -308.9 -300.6 -275.9 -276.1 59.5 121.9 -470.7 -300.4 -6G S Not Trrnamfre 71.2 342.6 466.4 518.8 541.4 SW8.2 756.4 616.4 546.8 531 Notb Factor Pejy.ent." -152.8 -102.7 -132.7 -76.4 -112.6 -297.7 -819.7 -198.7 -399.8 -37c,. Current Aect Salonco -12.9 -69.0 33.1 166.3 1S2.7 348.0 580.6 -51.0 -153.4 'e. Exchange Rate (R per US$) . 0.8 0.9 1.1 1.1 1.4 2.2 2.3 2.0 2.3 2 …--_------_---------__ ---_----_----------_--------_ ---------------------_ ----------------------------- SOURCE: Statistical/Economeic Review - Namibia 1990. - 196 - Table 11.02: NAM11!A - EXPOMTS BY CO4WrY (MillIion Rands) ________--..------------------------------------------------------------------------------------------------ 1980 181 1982 1968 1964 195 1966 1967 1980 1909 4ineral Eaporte 906.3 687.0 75.11 715.0 651.1 1264.4 1648.3 1306.9 1554.7 2026.8 Diarnds 44J.7 231.0 21'.9 234.7 231.6 409.0 615.5 431.2 6W3.5 814.0 Other Minerals 461.6 420.0 587.2 460.3 619.5 875.4 1029.8 875.7 901.2 1212.8 AQricultural Exporta 131.6 174.1 110.$ 77.7 98.1 127.5 156.0 241.9 258.4 293.7 Cattle 72.8 119.0 74.3 48.0 51.6 64.7 83.2 136.9 148.9 154.9 Small-Stock 9.1 25.8 22.2 10. 15.8 30.8 40.7 53.0 57.6 95.4 Karakul Peltw 42.8 20.1 13.3 10.2 16.2 19.7 18.4 34.6 34.6 25.0 Other Agric. Importe 7.4 9.2 10.7 8.8 11.8 12.6 14.6 18.4 17.3 18.4 Fiah Exports KUnprc..a.d) 12.9 23.2 30.8 31.8 25.1 44.8 38.7 63.1 94.1 64.9 Manufactured laport. 53.2 52.4 5s.6 67.6 68.3 78.8 80.2 97.6 119.7 134.5 All Other Exoortg 32.0 40.0 44.2 49.2 61.5 63.2 72.9 80.9 114.0 151.7 Totai Exports 1138.0 946.7 1009.2 941.3 1101.1 1593.0 1994.0 1796.4 2140.9 2671.6 SOURCE. Statistical/Eeonooic Review: NMmibia 1990. - 197 - Table 11.03 NAMIBIA - EXCHANGE RATE ----------------------- (Rand per US Dollar) YEAR NOMINAL EXCHANGE RATE 1980 0.780 1981 0.870 1982 1.081 1983 1.112 1984 1.438 1985 2.191 1986 2.268 1987 2.035 1988 2.261 1989 2.617 1990 2.586 Source: IFS. - 198 - Table 1I.04: NAMIBIA - FORfZCN TRAOE: INDICES OF VALUE, VOLUWE AND PRXCEs (1900 * 100) 1980 1981 1982 1983 1984 1965 1988 1987 1988 19*1 EXPO1rS Value 100.0 85.6 92.4 85.3 99.6 141.2 176.5 159.0 189.5 237.7 Volume 100.0 93.1 89.2 80.7 79.1 03.1 92.9 81.4 78.0 78.1 Price 100.0 92.0 103.7 105.6 125.9 169.9 190.0 195.3 243.0 304.3 IMPORTS Value 100.0 119.7 126.1 116.2 131.5 144.6 176.5 207.2 229.4 254.1 Volume 100.0 106.2 97.7 81.2 Q5.3 79.6 60.1 82.7 80.8 78,0 Price 100.0 112.7 129.1 143.1 154.3 181.8 220.4 250.8 264.0 325.9 Trx OF TRADE 100.0 81.6 80.3 73.8 61.6 93.5 60.2 77.9 85.e 98,4 'Statiatical/Eecnomic Review: Naihbis 1990. Department of Finance, Windhoek. - 199 - Table III.01: $AMIBIA --STRUCTURE OF NONFINANCIAL PUBLIC SECTOR I. General Government 1. Budgetary Central Government a. 18 Ministries including regional offices b. Departmental enterprises of Central Government * Transportation Department, Construction division * Department of Water Affairs c. Public enterprises * Post Office * Airport 2. Extrabudgetary Special Funds 3. Decentralized agencies of Central Government a. The Academy b. The National Broadcasting Corporation 4. Municipalities and Townships, and associated departmental enterprises II. Nonfinancial Public EnterRrises S.W.A. Water and Electricity Corporation (Proprietary) Ltd. (SWAWEK) TransNamib Ltd. First National Development Corporation (FNDC) S.W.A. Oil Exploration Corporation (SWAKOR) Agronomic Board The Meat Board SWAMEAT The Karakul Board The Diamond Board SOURCE: Official Goverment Sources. - 200 - Table Ilt.02.e: NADZBZA -- CtNU L3AT O lof, 2nd ADM 3rd T1F O0Vet4NWT EXtPIrTURE3. FISCAL YEAR 1960/81-190/S7 ----------------___O ------------------------------o_ _- - _---- ----_- - -- - -- - --_-- - ---------_----__ _ _ _O _ _ _ _ _ _ _ _ _ 1980/61 1981/82 1962/68 198/84 196/6 198/66 19"/S7 (Inta i I I ion of RSA Rand) CAirfnt Expenditures InteroOt....................... --- 1C. I SO. $e.9 114 4 120.2 113.3 Tr.nafre ........................ 62.3 72. 8 116.0 116.3 136.6 206.6 172.2 Othee current *-p.nditue. .. 432. 400.0 629.0 700.7 t3.9 969.4 1247.0 Sut-totel cunrrnt expenditures . 494.6 867.9 797.6 9O.9 1076.9 1296.2 1582.5 Caoptal *wpenditurge TEaanaf o.a.. 37.6 74.8 43.1 S9.4 36.9 62.9 69,5 Other capital expenditures... 100.6 207.0 161.4 145.8 174.7 170.3 172.0 Sub-total capital *upenditueo .,. , 2954 261.6 204.5 165.2 213.6 283.2 241.5 Toett expendituree ,, 72..0 6 9.7 1002.1 1106.1 1290.5 1549.4 1774.0 Of whicht Central authority .--- 744.2 796.4 948.9 1037.2 1241.4 1608.2 (In portent of fiC6DI year MP) Current Expandi urge Snt re.t --- 1.0 2.6 8.3 5.0 4.2 3.5 Transfer .4 0 4.4 6.5 6.1 6.1 7.2 5.3 Other current aspenditure.27.. 80.1 84.6 40.5 386. 34.0 38.5 Sub-total current .p.enditure. 3.. 4 35.5 48.9 30.2 47.4 48.4 47.3 Capital eIapeoditur Tr.n.fer. 2,4 4.5 2.4 2.0 1.Y 2.9 2.1 Other caital easpndituree. 12.0 12.5 6.9 7.5 7.7 Y.0 5.3 Sub-total capital expenditure .14.4 17.0 11.3 9.6 9.4 0.9 7.5 Totel expenditure .45.6 8 52.5 .2 59.6 56.9 84.8 64.8 OW which: Central authority.-- 44.9 "4.0 40.$ 48.7 91.8 48.4 Memorandum item: (In millions of RSA Rand) PiaceD year gre. doeseti product .1878.5 1665...1,7, .4 1937. 2. 2S080. 8240.0 (In percent of total 4".renent, egoendituree) Control authority peditur. ....79.7 01.7 60.4 0.1 79.2 Swouce: Aditor anerul 'e Report. afl4 Webl iehd Material for Master'. F"i eThe f R.ltter. *;acel year runs ArI I threu,h paph. -201- Table XII.02.b: NAM4IBIA - CENTRAL AUTHORITY FINANCIAL. OPERATIONS, FISCAL YEAR 1981/82-1990/91. Prel Est 1981/82 12/3 13/4 18/5 15/8 18/7 17/8 1889 1989/90 19g0/91 (Is millions of RlEA_Rand) Total revenue (excluding loan,.n. rasee 431.2 453.3 513.4 626.0 948.6 1133.6 1215.0 1404.1 2010.7 1927.7 Tease on income and profits ..... 78.8 55.6 107.3 165.9 293.9 395.1 410.5 451.81 824.9 746.0 Prpopety taxes ............ 3.2 2.0 2.7 2.4 3.0 5.2 9.0 8.8 14.5 11.3 Taxes en domestic t,ransations ... 55.4 76.0 85.3 121.7 162.2 204.7 261.7 338.5 441.6 453.0 Taxes on intxrnptional trade..... 275.5 271 7 273.1 271.1 338.6 400.2 391.3 450.5 521.4 557.6 Leaps: payments 1to SWFC....... 6.9 5.8 8.3 6.6 15.6 20.7 12.1 20.9 23.5 0.0 Sub-total tan ronen j.. ....... 406.0 399.5 460.1 554.6 782.3 984.5 1065.4 4236,7 1779 1 1767.9 No-tan revnu...,......... 25.2 513.8 53.3 71.4 166.3 149.1 149.6 247.4 231.6 159.8 Total enpanditt,ree.......... 744.2 798.4 945.9 1037.2 1241.4 1405.2 1669.0 1790.3 2003.2 2142.5 Curaret enpand,tures a.. ....... 543.9 W8S 7 786.81 847.0 994.8 1193.7 1346 3 1524.6 1612.2 1892.5 hiageoe.. ....-........ 100.7 151.9 179.6 224.9 235.3 334.4 372.3 432,4 469.6 1000.0 Goode end Serni x............ 105.4 117.1 158.3 160.9 255.5 321.6 392.5 440.6 43-5.0500 Interest ... ........... 20.9 37.9 62.8 112.9 118 9 113.3 109.3 114.3 89.8 118.6 Other borrowing costs....... 1,0 12.9 1.1 1.4 1.3 4.6 3.2 20.8 84.9 37.7 Subsidies .............. 36.9 56.4 39.4 33.3 72.8 77.3 71.6 51.3 . Current transfers.271.0 209.5 347.7 313.8 311.0 342.5 397.4 465.2 732.9 a 236.2/ Capital Expenditure ..... ... 200.3 212.7 159.1 190.2 246.6 211.5 322.7 2857 191.0 h/ 250.0 b/ Acquisition of fined capital assets 105.0 93.5 87.7 116.4 115.3 117.3 141.9 1453.1 116.3 Purchases of land etc ........ 8.2 2.0 0.0 0.2 3.1 0.2 0.3 0,8 0.0 Capital transfers .......... 82.1 112.8 67.7 61.1 112.1 95.7 177.2 119.0 77.5 Net lending ............. 5.0 4.6 3.7 12.5 18.1 -1.7 3.3 -7.2 -2.7 Deficit before budget anpport,(-) ... -313.0 -345.1 -432.5 '.411.2 -.292.8 -271.6 -454.0 -306,2 7.5 -214.8 budget eupport............ 214.0 215.0 285.0 372.0 316.7 469.2 308.0 313.0 141.9 106.0 Deficit after budget support (-) ... -99.0 -130.1 -147,5 -39.2 25.9 197.8 -146.0 7.6 149 4 -108.8 Financing .............. 99.0 130.1 147.5 39.2 -25.9 -197.6 146.0 -7.6 -149.4 108.8 Net borroaing ............ 141.9 206.9 182.3 113.9 8.6 -48.9 5.3 80.4 -177.2 Loan diebursemeents.......... 142.0 207.0 199.7 162.8 97.2 0.1 68.5 190.8 93.7 Loan redlemptions........... 0.1 0.1 17.4 48.9 88.6 47.0 61.2 110.4 270.9 Change in cash balancex (decline - 42.9 76.8 34.8 74.7 34.5 150.7 -140.7 88.0 .-27.8 Memorandum itenms; (In percent) Revenue/GDP ............. 25.0 25.0 26.5 27. 6 33.3 &z 1) 33.5 33.2 39.0 32.5 Expenditure/GOP......... 44.9 44.0 48.8 45.7 43.5 43.4 46.0 40.0 38.9 38.1 Deficit before budget eujpport/GDP.. -18.9 -19.0 -22.3 -18.1 -10.3 -8.4 -12.5 -6.8 0.1 -3.6 Deficit after budget support/GOP . .. -6.0 -7.2 -7.6 -1.7 0.9 6.1 -4.0 0.2 2.9 -1.8 (In millions of RSA_Rand) Fiscal year gross domestic product . 1653.8 1615.4 1937.4 2269.8 2852.8 3240.0, 3628.2 4476.0 5151.4 5930.6 Source: Auditor Generol and Ministry of Finance. a Includes budgoetry central government except 2nldhtier authorities prior to 1990/91. Includes 2nd tiera in 1990/91. Includes redemOption fund for the full Pe riod. Thi icoan extrebudgetary fund. ea The wage bill end other currant expenditure excludes those for departmental enterprises as the net operating su rplus of thus. are included u nde rnontax revenue. The wage bill also includee contributiones to pension funde, to the medical eid scheme, and emprovemente in conditions, of service, axe Not comparable to previous yea: 0 becouse of methodology differences. Covornmont estimated Piecel Year GOP at factor coat. af Include subsides. hi InCcluudeo notolendin9. .. 202 - Tablu lIT 02.c: NAMIDIA - CENTRAL ALIHIIORTTY REVEMJE RECEIPTS, FISCAL. YEAR. 1981/82-1990/91 Budgeted Pr.l Eat. 1981/82 1982183 1983/84__1984/85__1985/86__1986/87__1987/88__1988/89__1989/90 1989/90 1990/91 (In millions of RSA Rand) Total Revenue........ 431.2 453.3 513 4 626.0 948.6 1133.6 1215.0 1484.1 1530.7 2010.7 1Q27.? Income and profit texen . 78.8 55.6 107.3 165.9 293.9 395.1 415.6 451.8 624.0 824.9 748.0 Individual incomo tax .. 0 0 0.0 3.3 1.3 4,5 19.4 21.2 20.5 109.0 298,6 875,0 Co. tax on siemond mines 25.5 17.6 13.6 38.1 19.5 81.5 99 0 44.6 07.0 288.8 a/ 187.0 a/ Diamond profit tax on co. 9.6 6.7 12.9 8.7 30.4 39.3 15.1 32.9 20.0 Co. tax on other minces 2.0 2.3 37.0 65,4 163.2 146.0 154.9 180.1 135.0 Tea on non-mining co.* . 4.3 21,9 28.7 38.7 57.3 80.7 91.2 129.3 130.0 172.6 139.0 Non-resid. shareholder's 17.4 6.9 11.8 13.7 29.0 48.2 30.1 44.2 33.0 66.1 46.0 Other........... 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 Property ten........ 3.2 2.0 2.7 2.4 3.0 5.2 9.0 8.8 8.0 14.6 11.3 Transfer ten ....... 3.2 2.0 2.7 2.4 3.0 5.2 9.0 8,8 8.0 14.5 11.3 Tee on dom. goods and sear 55.4 76. 85.3 121.7 182.2 204.7 261.7 338.5 868.9 4.1.6 453.0 General sales tax 5... 0.9 70.6 78.8 112.0 139.7 173.9 205.9 258.5 254.0 311.4 311.0 Fuel lev ies........ 0.0 0.0 0.0 3.0 12.9 18.8 41.3 62.2 100.0 110.0 120.0 Licensee,......... 2.9 3.4 4.3 4,4 7.3 8.9 10.7 14.9 11.9 165. 13.8 Steep duties end fees ... 1.8 2.0 2.2 2.3 2.3 3.3 3.8 4.9 3.0 4.7 6.5 Toe on international trad 275.5 271.7 273.1 271.1 338.8 400.2 391.3 458.5 501.8 521.6 557.8 Diamond export duty ... 17.7 21.7 23.1 21.1 38.6 50.2 41.3 64.3 54.0 73.8 57.6 Customs and excise texan (customs union receipts) 257.8 2,50.0 250.0 250.0 300.0 350.0 3150.0 394.2 447.8 447.8 600.0 Le"autransfer of tan to S 6.9 5.8 8.8 6.5 15.8 20.7 12.1 20.9 14.9 23.5 0.0 Total tee revenue...... 406.0 399.5 460.1 554.8 782.3 984.5 1085.4 1238.7 1387.8 1779.1 1787.9 Non-tee revenue ...... 25.2 53.8 53.3 71.4 166.3 149.1 149.8 2A7.4 142.9 231.6 159.8 Entrepren. and property i 5.8 8.7 18.4 32.4 54.9 61.2 85.5 92.6 61.9 94.8 57.0 Operating surplus of departmental enterprises 4.5 1.4 4.2 4.6 9.3 14 9 22 0 41.7 23.1 48.4 41.8 Other property income I. 1 7.3 12.2 27.8 45.6 48.3 43.5 50.9 38.8 46.4 15.2 Admin. fees and charges 17.1 23.2 33.8 35.1 41.9 51.4 77.8 88.3 72.8 78.0 92.8 Fines, and forfeitures ... 1.4 2.0 2.2 2.2 2.2 2.? 3.2 3.2 3.0 4.4 3.5 Sales of stocks, & fxd ass, 0.3 0.2 0.5 0.8 0.8 2.9 2.7 2.9 2.2 3.2 1.7 Other eon-tax revenue ... 0.8 5.0 0.4 1.1 0.5 0.5 0.4 0.7 5.0 30.4 0.6 Grant from rep. author.e 0.0 14.7 0.0 0.0 88.0 30.4 0.0 3.5 0.0 0.0 0.0 Receipts from exchange co 0.0 0.0 0.0 0.0 0.0 0.0 0.0 586.2 0.0 20.8 0.0 Fiscal Year CDP...... 1655.8 1815.4 1937.4 2289.8 2852.8 3240.0 3828.2 4478.0 5190.1 6151.4 5930.6 Source: Auditor General and Ministry of Finance. e Fiscal year runs APril through March. For coverage, see table0 S.02.b. B* udget 1991/92 figures are not comparable with previous ye ar because of methodology differences. see Not comparable to previous years because of methodology differences. eace Authorities, estimxted Fiscal Year CDP at Factor cost for Budget 1991/92. s/ Includes company taxes on mining end diakmond profit tax. -203 - Table 1I1.02.d: NAMIBIA - C84TRAL AUTIOPrTY REVe&A RS=2PT5, rP!SCAL YWe* 1981/82-190/Os1 ---------------------------------a------ 1961/62 I98/68 1983/64 1/ 19846/66IS 198116/67 167/66 1986/89 1st89at0 1u90/41 (In percent of fiscal yvee GODP) Total Revenue.......... 26.0 25.0 26.5 27. 88. 3.0 33.5 38.2 86.6 31.0 Income and profit t,ane .... 4.6 3.1. 5.5 7.3 10,.3 12.2 11.5 10.1 15.9 11.5 Indiviidual income tax.... 0.0 0,0 0.2 0.1 0.2 0.6 0.6 0.5 5.6 4.7 Co. taxn an diamond mines 1. .5 1.0 0.7 1.7 0.7 2.5 2.71 1.0 1.9 1.2 Diamond profit tarn on co-*s 0.6 0.4 0.7 0.4 1.1 1.2 0.4 0.7 0.7 0.2 Co. tern co other imins ... 0.1 0.1 1.9 2 9 5.4 4.5 4.4 4.0 3.0 2.1 Tomn on non-mining co. .. 1.5 1.2 1.5 1.7 2.0 1.9 2.5 2.9 8.3 2.5 Non-resid. eheretholder's taxn 1.1 0.4 0.6 0.6 1.0 1.5 0.6 1.0 1.3 0.71 Other ............ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Property tarn.0.2 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.8 0.1 Transfer tar.0.2....0.1-- 0.1 0i .1I . 0.2 0.2 . 0.3 0.1 Tarn on doe. goods and serv.* 3.8 4.2 4.4 5.4 5.71 6.3 7.2 7.6 6.5 7.2 General isle, ----tarn-- 8.1 8.9 4.--1 4.-9 4.--9 5.-4 5.7 5.7_ 6.0O 4.9 Fuel levies ......... 0.0 0.0 0.0 0.1 0.5 0.6 1.1 1.4 2.1 2.0 Licenses........... 0.2 0.2 0.2 0.2 13.8 0.5 0.8 0.8 0.3 0.2 Stese dutieis and fees .... 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Torn on' international trade 16.6 15.0 14.1 11.9 11.9 12.4 10.6 10.2 10.1 10.0 Ojamond eaportd-uty 1.1----1.2_ -1.2' 0._9 _1.4_ 1.5- _1.1 1.4 -1.4 71. Customs and erneime tamnes (custom union receiptso) .. 15.6 18.61 12.9 11.0 10.5 10.6 9.6 6.6 6.6 6.9 Lsee,tresofer of torn to s.- 0.4 0.3 0.4 0.81 0.5 0.6 0.8 0.5 0.6 0.3 Total tarn revenue..... 24.5 22.0 23.7 24.4 27.4 80.4 20.4 27.6 84.8 26.4 Non-tern rev'enue ....... 1.5 8.0 2.6 8.1 5.8 4.6 4.1 8.5 4.5 2.6 …9 -- - - - - - - - --. - . . 8treee.and ropeorty inom Operatin eurplus of Jaeortmeta enterprimos 0.8 0.1 0.2 0.2 0.8 0.5 0.6 0.9 0.9 0.7 other Propenty enc ..e 0.1 0.4 0.6 1.2 1.9 1.4 1.2 1.1 0.9 0.2 Adami. fee adcharges.. 1.0 1.8 1.7 1.1 1.5 1.6 2.1 2.0 1.5 1.5 Pines end fofitures ... 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 SaI es at stocks A fand ameets 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.0 Other non-tarn revenue .... 0.0 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Grant from rop. author.6.. 0.0 0.6 0.0 0.0 2.8 0.0 0.0 0.1 0.0 0.0 Reei;pts from ernchan@e cower, 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.3 0.4 0.0 Aregae dandcoaytr 8.2 2.5 2. . .1 5.8 4. 82 40 25 Aggreoate mining s"etr ternx 8.8 2.7 4.8 6.9 6.5 9.6 6.7 7.2 7.0 4.6 Source: Auditor General end Ml ni&try of Finane. ePleco;l year ruvne April through March. Par cimorop, mes tible 8.02.b. - 204 - Table 111.0..e: NIJ4ISIA - aDVERN APPROV ESTAULWITS. JAN45 80. 1968A-MAT 1990 June S0 June 30 Juen 80 June 30 August 1990 196 196 167 196 Aeprov Einloyed _____ -....- __._____.______ .--,. ...........................................*, .....___________.................................................._ I Centrol Authority Department Office of the President 0 0 0 0 104 62 Offico of the P.'ei 4inistar 0 0 0 0 S6 507 Auditor General 5s 48 4e . .e . Aaric.and notur, cons. (Aorta rural dew.) 2.127 2.042 2.143 2.416 248 2312 water affairs (F;aherie. and Water) 1.487 1,970 1.975 1.977 201 1627 Civic affeir & annower (Lebor and mnpower) 319 56 700 65" 74 65 Local govt. nd howeing 0 0 0 0 to00 936 Cov.rnental affairs 259 292 297 266 ..e Economic affairs 244 141 148 17 ..e. Mines and Energy 0 0 0 0 67 79 Trade and Industry 0 0 0 0 54 41 Fi nance 268 331 870 391 766 Ws Justice 51 54 510 687 271 248 Nati. health A welfare (health and ame.s"rv. 268 4.165 4,133 4.050 7809 7026 National intelligence O 1 1 1 ... ... National education 1,20 1,040 I,m 2.117 201t 21410 Lands, Roe tleenOt and Rehabilitation a 0 0 0 66 47 Hme Affeirs 514 698 Pol;ce (civil poIts) 26" 162 16s 168 Post. and tesecomnications 2,406 2.36 2.411 2,470 1oi7 65 Transport 4,148 3,726 3.780 3.68 .$ . Information and broadeasting 1 O .1 0 17 521 ODfen (civil posts only) t. .71§ 1,10 1,9U 2170 am Wildlife. conservat;on and tourism 0 0 0 0 16 1491 Foreign Affai rs S6 0 0 0 60 6t Ce nral Pereannel institution 20 24 24 4 0 Total: Central Authority 15.6 20.102 20,648 21.744 84018 $7l' --.--- --- --- ---------~ 1. Rer.aentative Authorities Wh.tais 6,89 4.689 4. 81 4m772 Ca.riieins 1.88 1,876 1,868 1,984 Oumara. L.80 1.469 1,572 1,70 lieroee 2.440 2.36a 2. 0 2.175 Kaangos 2.,86 8,120 2.791 2.73 Coloeread 66 1.194 1 248 1.35 Name 93 1.03l 1,161 1.117 O,ambae 7.610 9.406 8,716 6,941 Tewims in 2Zl 257 2 Total: Re"s,sntative Authorities 2a.5 25,0o0 24,11* 25,.01 0.0 0.0 Total: Government Estebliaheets 42,240 4,107 44,756 7 4,63 544118 5 ..._00 ... ._~................ .. ._ .............. .- .__0_ _ _ _ . _._.____ _____ ____--................... - --- - - - - -........................................................................ *____ Sore: Unpublished materil from incomlsted thesi, by R. Ritter end Annual Report of the Gvernment Service Cmemiisieo, I9710 For 1990/91 includes total Central aovernuW . * No longer independet enti ties. - 205 - Table I.02.f: NM41O9A - FR8CrZWML 0ZSlIhNLOFN OF C Et4RA4. AHoRTTY E)PMMTMm9, -------- - ------- -- 6.-o- o-- -- -- -- -- -- -- -- -- .- - -- -- -- - - -- -- -- -- -- --- FISCAL YEAR.. 1985/86-1990/91 1905/56 l"/67 1967/" l96/09 1969/90 1990/91 (Zn mil ione of RSA Rand) Total government *sienditsjre 1126.9 1324.1 1696.8 7. 16 909 2259.5 Economic etor ev;c ............... e0.0 72.5 154.4 7S1. 55.4 100.9 Totai coewrmity Service me. . 8 1 400.1 497.6 S 87.4 662.0 904.5 Education and treinin . 187.0 210.6 276.6 848.2 386.7 476.1 l4Oath and social *elf136,9 140.0 1".6 169.2 22416 348.7 Other vi¢ ........ ........... 37.2 41.3 50.6 58.0 54.3 62.7 Total infrastructure services . 26.1 302.8 S7.1 362.4 360.6 40. 6 Transport ........... ............. 94.8 141.0 152.4 151.0 146.2 151.1 Water supply ..................6. -9.0 67.7 76.5 69.5 66.8 90.8 Other aervice .9................... 92.8 93.6 106.2 141.0 157.1 1110.9 Total protection and admin. "sviess 452.9 547.1 707.6 701.6 701.4 614.9 Law and order ....... ............. 64.3 144.5 164.1 164.0 196.2 194.7 National defense ...... ........... 150.6 166.7 196.8 225.S 125.7 113.1 Other ev e .......serie............ 218.0 233.0 845.2 292.1 370.5 507.1 Reserch .............. ............. 1.6 2.1 1.6 1.6 0.6 0.4 --------,.-....--,-.-.--_-.-..-,-.------_-------------.---.--__.-..--_.-----._.-.------.-_ (In percent) Shere of total ependiturse --------- Economic etor ervicee .....5.5...... 5.3 .8 9.1 4.6 8.1 4.0 Total comany servi;ce 0. .......... 81.7 80.2 29.8 33.8 U8.6 40.0 Ed tee oioand taaining... 16.6 1S.0 16.4 19.7 21.2 21.1 Health and socil welfe ::::: 11.9 11.2 9.9 10.6 12.4 15.3 Other services .......8............ .3 3.1 3.0 8.0 8.0 8.7 Total infr.tructure services ...... 22.7 22.0 19.0 21.6 21.5 19.1 TransPrt .........0...... *.4 10.4 9.0 6.6 6.1 6.7 Water supply ..........6..... ,.1 5.1 4.5 &.1 4.6 4.0 Other services ........ ........... 8.2 7.1 6.4 6.1 6.7 8.4 Total protection and admn. services 40.1 41.8 41.7 40.1 0.6 36.1 Law and order ........ ............ 7.5 11.1 9.7 10.6 10.6 6.o National defense ...... ........... 1.S 3.46 11.7 13.0 0.9 5.0 Other ee.'view ....... ............ 19.8 17.7 20.8 16.7 21.0 22.4 R_eearc............................ 0.2 0.2 0.1 0.1 0.0 0.0 (In percent) Share of fiscal y 7e 0P Total g ^overnssn eupee,diiure 89.6 40.9 4S.6 89.1 84.9 87.1 Economic etorve .....2.1 2. .07....... 1.1 1.62 Total co_mnity services ..... ...... 12.6 12.8 18.7 18.1 12.6 14.9 Education and training.6.6 6.5 7.7 7.7 7.4 7.8 Health and sooial el .4.7 4.6 4.6 4.2 4.3 5.7 Oth servier s ........sr........... 1.8 1.8 1.4 1.2 1.0 1.4 Total infreetructure serviese ....9.. .0 9.8 9.8 0.6 7.5 7.1 Traensrt ......0.... 1. 4.4 4.2 8.4 2.0 2.5 Water s ............ 4. 2.1 2.1 2.0 1.7 1.5 Other servec .8......... 2.2 2.9 8.0 8.2 8.0 8.1 Total protction and adin. services 18.9 16.9 19.6 18.7 13.8 18.4 Low and order ........ ............ 6.0 4.5 4.5 4.1 8.6 8.2 National defes .. ................ 5.8 5.1 5.8 5.0 2.4 1.9 Other services ........ ........... 7.6 7.2 9.5 *.5 7.8 0.3 Resarch ............. .............. 0.1 0.1 0.0 0.0 0.0 0.0 Source: Annual adala sit the Cental ftweue, Pued. *Bmdgetd amounts, an not metal expendlture. Ealudee statutory exapendi ure. i.e. eninly debt aetveln. - 206 - Table IIZ.Was NAMIBIA - THM ACADEMY --________---- ._-----¢_0h (In million* of RSA Rends) --------OOO------------------------------------------------------------------- eat eat 196 t196 1968 1969 1996 (Ot!ratinq revenue 18.7 28.2 32.0 30.7 30.4 - --------------------f --- ---- ---- ---- o7 which (Govt. subsidy) 16.1 20.8 27.7 26.2 25.8 Utonr revenue 0.3 6.6 6.5 I.5 0.6 OO. ------o--- 0Ureratinq Expenditure 12.4 16.2 20.9 25.0 27.0 lP2ulersati oa 9.1 11.5 14.6 ... Wi(Op a *3.8 4.7 6.1 ... UthNr Exponditure 3.1 8.8 4.6 4.0 4.0 of which: interest ... ... ... e. to Govt. porasting Surplus/deficit (e) 6.8 7.6 11.1 6.7 3.4 coonoemfa eemmmeeo cccmccce 0000 OCS 0___ _on mm__ Ovoe'll Surplus/deficit (-) 8.5 8.6 7.1 2.2 6.6 Financing 8.6 8.6 7.1 -2.2 6.1 oWrs t 0.6 6.0 6.0 ... ... Pc*c:ptieona 1.6 2.4 8.6 .. Go neGse8 In coah balance 1.9 1.4 4.1 ... ... Souw'ee: The Acedmy, Annual Finanoial Statmenso end mission estimates - 207 - Table 11.08.b: NAMIBIA - NAMIBIAN BROADCASTING CORPORATION (NBC) --------e e--------s--b--- - --_____Q- (in millions of RSA Rends) Oudget 1936/67 1997/" 19,6/g9 1969/99 ISN/01 Operating revenue 26.9 81.8 35.9 44.6 47.0 Liconse fees 2.2 2.8 .20 8 8 3.2 Advertising services 2.1 2.0 4.2 6.1 6.3 Government subsidy 21.2 26.1 28.4 86.1 37.6 Other O.1 6.1 9.8 06. 1.6 Operating expenditure 283. 29.9 82.8 43.6 563 of which; interest to Governmont 0.8 0.8 0.8 0.8 0.2 Operating surplus/deflcit(-) 2.8 2.8 8.6 38 ,.0 __ ___ _ _ __ _ _ ------ -_ ---- ---- -- -- ---- Other Revenue 7.6 5.9 6.1 7.6 6.1 _______________--- --- ___ ___ _ Transfer from Govornmnt 7.2 5.8 650 6.8 6.1 Investment Income .6 6.6 1.1 1.8 . Capital expeiture 7.5 4.1 6.8 3.8 . ________________--- - --- --- ___ ___ _ DC Overall surplus*s 2.6 4.1 8.4 2.8 1.6 _______________5--- --- - -O Flnancing -2.6 -4.1 -8.4 -2.8 '4.6 _______O_--- __ _ee eec _o Improved cash position(-) Ce -2.6 -4.1 -e.4 -2.8 -1.4 _____-_se__fte-e_---secs-----ecccss----------sffeocsOsCOO Source: Namibian Broadcasting Corporation, Annual Financial Statemeto for 1986/07 - 1909/90 and budget for 1960/91 e The financial year Is April 1 - March 81. eeTransforred to various funds, such as redemption and dpreciation fund. which here treated as an Integral pert of the NBC. Pro!f OW IIt.o 17F.L0J Equ ivaolt mfitn 7 0 I O 18.(3 Soev eVo 2.13 8 . 8 OC3$1fit Cr0 npdtfit t G e1~9.&4 ci Mitoe ooeso eeco o c9o Ae,i)i i if; cti i Doprct; I i. i. . U.u a Po i Li 'ICt - : e Group oIo~ ooprc i Ot 1 I. 4; .8 AA R 7 r i o . 2. Dop3WXtfcl f3i Gl cwit; ' ctleoeZpc 10.0 Cn i . Z . Xne9fio co tlt 70 t(. fzt ho.GC3tR. t{C ( OUtor c i(c;l Iv 4.1 , I l 4 PFP06.e.y rcA'O I%l1£. . G locdop or,z c... . ;. 3 e . F. C. 47. I&7ntV0"@3PSo 8.2 7.4a IntaC3PC59 r-t.i^' 0-4 ia3efloufEtef>C .. ......r,'3.icn o.e 0.. . . o .o ¢80t) r3t^3eg38t36f-;J4}G[t i-, ~~~Tt.y -70.£0 eEloi fR)FYC 0 [;0 113 7 3 L=on tnr. =r !, _or S00 - $etf38Os ic lc6.lI '4 ..'ln(u' Co ieS.ot L AnuoIl epv"t 10I9 o ---- ---- - .-i-. Q.Z. . 1 _ _ 1. I oc-r^ rt 1 I D> --------- 'f -- -------------- cuEd t -3 t J Cl t ci '3t'.r.t-.f t ' c' ( C¢ ! t. rf .......... i -- t \ r - 209 - Table II.".d: NAMIBIA - SOU5 WEST AFRICAN WAIER AND ELECTRICITY COMOfATION (SWAWIK) --_-_----------____------__.-----------------___-___-----__------------ (In millions of RSA Rands) 19"/37 1987/86 193/$9 1969/M9 Operating rovenues 77.7 BS.6 1U4.1 122.4 SaIes of sod NW vso?vices 77.7 ".65 14.8 122.4 Oporating expenditure 6.6 .6 64.9 96.5 Mano_ment anod Acin1etration a.0 4.1 6.7 7.6 Generation and distribution 43.4 51.6 47.8 69.1 Dereciation 10.2 10.1 10.9 11.7 aes 1o I reair, 6.6 6.6 6.0 2.1 Operating surplus/deficit 21.1 22.1 19.4 31.9 Adjustment for noneach itee 9.9 11.4 11.9 11.2 depreciation 10.2 16.3 16.9 11.7 other -4.7 .6 0 .60 9.0 incr"" In accounts payable 0.4 1.1 1.6 -4.6 Internal caah eeraetion 31.6 8U.9 61.8 48.1 _________-------------__ _ -- -- -- -- -____-____ ........___ Nonoperating revefues 19.5 22.6 31.6 389. Interest A other prop.inc. 19.5 22.6 S1.6 89.3 Nonoperatino expense 13.6 14.8 S2 88.7 interest 4.6 6. . 8 0 6.1 Fixed asete acquired 9.1 11.It .3 381.1 Sol. of fixed assets .4.6 -0.4 -1.2 -4.6 Chang In stocke 5.9 i .9 1.7 1.9 Lending 9.4 1. 6.7 1.6 Cos% surplus 8".4 42.2 5,1 40.7 FI-nerdcng -86.4 -42.2 °C0.1 -40.7 Trnnsfor :o F'und Inv*tm"ta -8U.2 22.0 ^'6.7 loan repayment -;t,. G - . V -'9.9 banst fInane) 9.0 -1.1 -14.0 -2.5 Capit! eontr,butlone by consumers &.# 2.9 2.2 4.9 Dividend aid 6.0 9.0 -5.6 -6.6 Souvee: Sweawk, Annual lepwrts 1967 to 1996 * SWAWK'e fiscal yeer runs from July 1 through J.Junc S - 210 - Table M.ft..: NAISIA - fPR NATIONAL DV3PWIT C011TION (t Is elIIlo" of RIA Reeds) tt167/ *16WU 11W/U" Operating Noweo 1m6. 186. 1in.? Slaoeto goode end serviesee 117.5 124.6 187.0 Subsidie 1.5 1.2 6.3 interest 7.6 0.3 13.5 operating Expenditure 116.7 186.8 144.6 Operating Surpiuc/defielt (-)6. 4.6 4.? Adju5tX et for so**ee Item 2.2 1.2 8.2 deprIcietlo. 2.1. 8.5 4.8 proit. Ols disposel of eseeto 4.1 4.0 4.6 welte offt 0.8 0.2 6.0 Incre In t ecosete resivable -4.1 -1.2 4.4 Intornel cash sosereti.. 6.6 6.6 g.e Invoestet supeedlitre 10.6 16.6 4.6 Purehes of fixed iep.eents 6.6 11.6 6.1 Ima..p.seeee sold -1.6 -2.5 4.0 e lesroesee to looms -3.4 -1.5 5.4 Ietabi I Insit cob 6.6 6.2 3 .8 Change In *"ckg 2.? 8.6 -5.6 Ovorell m1 surpc e/dsetX () -1.6 -4.8 8.@ Financing 1.6 4.8 -8.6 Shares* Govt. 11.1 7.6 1.9 look fiteecin, set -6.5 -2.7 -6.7 Seuros Fir"st Nti el .i.mt Corperote Asofl Rv"ort S6W eNW Peaeeil Stetemes for 16w. e1i1mal par ruse frm ApiI 1 to March 81a - 211 - Table 111.04 Namibia: Central Government Medium-Term Financial Projections, 1991/92-95/96 (Million Rands) Prel. Est. Projections 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 Revenue 2,010.7 1,734.9 2,257.7 2,637.8 3,102.1 3,630.4 4,2633.P Income and Profits Taxes 824.9 740.7 818.3 944.5 1,092.0 1,273.3 5Q0.7 Individual Income Taxes 298.5 373.8 444.1 527.6 626.7 750.8 301.0 Company Taxes on Mining and Diamond Profit Tax 288.8 163.1 187.6 202.6 218.8 236.5 271.9 Company Tax on Non-Mlning 172.5 167.6 148.7 174.5 204.6 240.0 281 a Nonresident Shareholder's Tax 65.1 36.2 38.0 39.9 41.9 44.0 46.2 Property Tax 14.5 12.7 12.0 14.0 16.0 17.0 18.0 TransferTax 14.5 12.7 12.0 14.0 16.0 17.0 18.0 Taxes on Dom. Goods and Serv. 441.6 500.8 588.6 686.3 799.5 930.8 1.088.4 General Sales Tax 311.4 359.3 425.6 504.1 597.1 707.3 837.8 Fuel Levies 110.0 120.0 140.0 157.6 176.3 196.0 221.6 Licenses 15.5 15.4 16.0 17.0 18.0 19.0 20.0 Stamp Duties and Fees 4.7 6.1 7.0 7.5 8.0 8.5 9.0 Taxes on International Trade 5211§ 283.8 66 775.5 936.1 1.099.4 8. Diamond Export Duty 73.8 60.3 65.6 75.5 86.1 99.4 112.7 Customs and Excise Taxes (Customs Union Receipts) 447.8 223.5 590.0 700.0 850.0 1,000.0 1,169.8 Less Transfer of Tax to SWFC 23.5 0.0 0.0 0.0 0.0 0.0 0.0 Total Tax Revenue 1.779.1 1,538.0 2.074.5 2.420.3 2.843.6 3,320.5 3.89.6 Non-Tax Revenue 231.6 196 9 183.2 217.5 25. 309.9 373.7 Fiscal Year GDP 5,151.4 5,930.6 7,045.2 8,364.7 9,942.1 11,920.1 D43720 Source: Ministty of Finance; .nission estimates. - 212 - Table 111.05 Namibia: Central Government Medium-Term Financial Proiections, 1991/92-95/96 (Million Rands) Prel. Est. Projected 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 Total Revenue 2,010.7 1,734.9 2,257.7 2,637.8 3,102.1 3,630.3 4,263.3 Tax Revenue 1,779.1 1,538.0 2,074.5 2,420.3 2,843.6 3,320,4 3,889.6 Income and Profits Tax 824.9 740.7 818.3 944.5 1092.0 1273.3 1500.7 Property Taxes 14.5 12.7 12 14 16 17 18 Taxes on Domestic Transactions 441.6 500.8 588.6 686.3 799.5 930.8 1,088.4 Taxes on International Trade 521.6 283.8 655.6 775.5 936.1 1,099.4 1,282.5 Less: Payments to SWFC 23.5 0.0 0.0 0.0 0.0 0.0 0.0 Non-Tax Revenue 231.6 196.9 183.2 217.5 258.5 309.9 373.7 Total Expenditure 2,003.2 2,044.0 2,504.5 2,899.2 3,343.3 3,865.0 4,458.9 Current ExpendIture 1,812.2 1,784.5 2,144.5 2,469.2 2,831.3 3,195.5 3,662.8 Wages 469.6 912.7 1,035.0 1,182.5 1,300.8 1,430.8 1,573.9 Gods and Services 435.0 644.6 724.5 874.8 1,056.4 1,275.6 1,540.2 Interest 39.8 21.4 125.6 142.1 159.1 173.1 184.9 Other Borrowing Costs 84.9 0.0 1.4 0.0 40.0 0.0 0.0 Subsidies and Expenditures 732.9 205.8 258.0 269.8 275.0 316.0 363.8 Capital Expenditure 191.0 259.5 360.0 430.0 512.0 669.5 796.1 Deficit Before Budget Support -7.5 309.1 246.8 261.4 241.2 234.7 195.6 Budget Support 141.9 100.0 150.0 75.0 0.0 0.0 0.0 Deficit After Budget Support -149.4 209.1 96.8 186.4 241.2 234.7 195.6 Financing -149.4 209.1 150.7 261.6 406.1 360.8 326.2 Net Borrowing -177.2 ... 96.8 186.4 241.2 234.7 195.6 Loan Disbursements 93.7 ... 194.3 150 150 150 125 Loan Redemptions 270.3 ... 151.4 38.8 73.7 41.5 60.0 Change In Cash Balance, Increase (-), or additional fin. nee 27.8 ... 53.9 75.2 164.9 126.2 130.6 Source: Ministry of Finance; Mission estimates - 213 - Table 111.06 Namibla: Projected Central Government Debt and Debt-Service, 1991/92-95/95 (Milion Rands) Actual 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 A. Existing Loans 1. Debt Outsanding end of FY 714.1 582.4 539.1 500.3 421.6 375.1 315.1 Stocks 549.5 497.5 466.5 439.6 403.6 368.6 308.6 Local Loans 35.6 25.0 20.0 15.0 5.0 0.0 0.0 Loans from RSA 39.0 32.5 26.0 19.5 13.0 6.5 6.5 Term Bonds 19.0 0.0 0.0 0.0 0.0 0.0 0.0 Foreign Loans 71.0 27.4 26.6 26.2 0.0 0.0 0.0 II. Schedule Redemptions in FY 131.7 43.3 38.8 78.7 46.5 60.0 Stocks 52.0 31.0 26.9 36.0 35.0 60.0 Local Loans 10.6 5.0 5.0 10.0 5.0 0.0 Loans from RSA 6.5 6.5 6.5 6.5 6.5 0.0 Term Bonds 19.0 0.0 0.0 0.0 0.0 0.0 Foreign Loans 43.6 0.8 0.4 26.2 0.0 0.0 Ill. Scheduled Debt Service 426.0 265.5 118.7 106.8 181.2 100.5 107.0 Interest 89.8 96.1 74.0 68.0 62.5 54.0 47.0 Discounts and Forex. Loses 84.9 37.7 1.4 0.0 40.0 0.0 0.0 Amortizatlon 251.3 131.7 43.3 38.8 78.7 46.5 60.0 B. Projected New Loans Projected New Loan Inflows 150.0 194.1 150.0 150.0 150.0 125.0 Projected Interest on Loans 22.5 29.1 2.5 22.5 22.5 18.8 Cumulative Interest on New Loans 22.5 51.6 74.1 96.6 119.1 137.9 C. Projected Outstanding Debt and Debt Service Interest and Forex Costs (A+B) 174.7 156.3 127.0 142.1 199.1 173.1 184.9 Amortizatlon 251.3 131.7 43.3 38.8 78.7 46.5 60.0 Debt Service 426.0 288.0 170.3 180.9 277.8 219.6 244.9 Debt Oustanding, End FY 714.1 732.4 883.2 994.4 1,065.7 1,169.2 1,234.2 D. Debt Service Ratios (As Percent of GDP) Debt Service 8.3 4.9 2.4 2.2 2.8 1.8 1.7 - 214 - Table IV.01: NAMIBIA - INDICES OF CONSUMER AND FOOD PRICES (19S0=100; ANNUAL AVERAGES) ------------------------------------------------------------__----------- ----------------------------------------------------------------__-----------__---------------------------------- 1980 1981 1982 1988 1984 1985 1986 1987 1988 1989 1990 -------------------------------------------------------------------__--------__---------------------------------- Namibia - CPI (Windhoek) 100.0 114.8 132.6 148.6 182.0 181.4 206.7 231.6 261.4 300.9 337.1 # Chango in CPI 14.8 16.6 12.0 9.1 12.0 13.4 12.8 12.9 16.1 12.0 Food Price Index Windhook 100.0 126.8 148.1 188.8 186.8 198.0 227.2 288.8 302.8 365.8 418.0 X Change in FPI 28.8 17.0 14.0 10.7 8.0 14.7 17.4 13.6 17.7 17.3 SOURCE: OStatistical/Economic Review - Namibia 1990' and *Economic Reviow Budget 1991' - 215 - Table IV.0@: NMEZDA - ASSTS OF COMCLAND QA.. SAC . . .. ....... ................... ....... ............... . Rand millions (As st 31 Deceok.) 1960 1911 190 190 1964 19o 196 1967 196 199 Liquid Ae ts 61.4 99.1 108.7 91.8 67.3 76.9 98.9 99.2 208.4 263.4 Coin, bullion & bani notes 9.6 14.2 14.2 16.9 20.8 24.0 27.8 27.0 S6.5 44.9 Call eney V/ discunt houe. 3,2 6.7 19.0 15.8 $0.9 22.7 22.0 15.6 44.5 07.8 sills discounted or purchasod 2.7 7.0 9.4 13.7 2.4 1.7 15.7 0.0 01.0 46.4 Short-term r oernment stesh 26.4 25.4 39.0 8.6 3.5 11.7 17.8 21.5 21.4 50.0 Other I iquid asets 39.5 48.6 24.1 38.6 20.0 16.6 12.9 36.1 20.0 26.6 Prescribed Inveouenits 6.? 10.6 11.6 11.8 19. S5.3 MA NA NA NA Othor 1nv.t~Ot. a/ 0.5 4.5 4.3 16.2 29.5 97.2 64.4 114.2 124.8 281.1 Advances & Non-Liquid Discounte b/ 108.0 225.4 290.3 836.5 409.6 862.6 444.7 567.9 960.6 1801.1 Wire-purchase discounts A vndvance 39.1 50.6 72.7 98.6 96.8 98.6 116, 126.2 200.8 261.7 Leasing A deeds of "le 20.1 16.9 28.0 29.7 26.9 22.1 23.9 24.6 35.1 58.0 Other loons and *avances 12.6 18U.9 194.6 21..2 2".4 244.09 84.3 486.9 724.7 961.4 Other a*st c/ 161.7 150.2 286.1 391.4 264.0 865.0 809.0 316.2 166.7 185.1 TOTAL ASIT 486.3 490.0 650.2 5.09 610.0 t7.2 964.0 1117.5 1457.5 1960.7 -_---_-___--_-_-__--------------- ------. ._.._.... ..._..___..._._...______T______0_ .._.____..........._X._ Notes: Oo.estic5 andi:Forelgnai in this cwontet refers to residents inside and outside the Common lMonetary Area raespet vely. a/ Includino differences beteen tho aerkt values (as for reporting liquid assts and presribed investent) bond the book value of inv steets. h/ Including disgount bi I ll. pomisesory notes and a ccPtancs that doe ot qual ify as Iiquid assets but excluding loons to disount house and bills of advances to the Land Znk. UntIl 1O1. awdvnces and disaounts are stated before deidut ion of unearnoe finance charges; ao from lo they are stated after accounting for unerh*ed finance char,.. /' Including cuetonr' I ability on acceptances outstanding, per cctrnt and including head office balances of South African bed" banking institutions. Source: Sbataistlcal/Ie ofi Review: MNtacbis lowgl, Depertset of Finance. Windhoek. - 216 - Table YV.08O NANIBZA - LIA3ZLrrIE OF' COIWCIAL AND WBOAL BANKS ...................._................_______.....___.. Rand MilIIone (As at 31 Oeer) _ __._...........__ .__...__..........- --------- - ---------------------------------------------------------___---------______.___________----......................................... *v. 1960 1o1s 196 1o" 1084 106 l" 1Q07 1096 1954 Totfl Oouftl O ...ts S89.1 414.7 568 .8 Y13. 718.5 S21.9 652.2 1000.4 1163 1658.7 DO_ nd 134.1 130.3 200.2 213.2 257.8 244.2 247.3 252.9 487,6 616.4 Sew asg 101.0 116.8 117.4 129.0 188.6 1560.6 174.7 202.2 223.9 247.3 FiX64 and Notice 162.1 166.1 245.7 871.8 322.4 420.9 480.2 448.3 476.6 590.0 Short-Tere 16.0 13.6 87.4 67.4 24.0 66.2 79.6 81.6 172.3 247.6 Hagd i u-Te,ra 66.1 66. 0 77.9 167.2 162.9 250.6 242.7 273.5 104.4 247.5 Lan#-Tem 60.0 465.6 180.4 117.0 115.5 124.1 107.9 120.0 109.9 94.9 Tota I fotein On o it 1.4 2.0 1.6 2.8 2.9 9.1 12.3 14.4 6.3 5.1 Total ODeosits 89.5 418.7 565.1 716.1 716.4 68.10 U4.5 1014.0 1166.6 1638.6 Other libilit;e to the public 16.4 24.4 30.8 25.5 20.0 372 27.8 44.J 162.1 161.0 Total Liabllities to the Public 415.0 441.8 595.9 741.6 738.4 661.2 691.0 1059.6 1326.7 1610.6 Capital and Reervea 6.6 11.. 14.2 10.0 18.7 22.2 25.6 25.6 56.4 65.0 Other Liwbllltl- a/ 11.6 87.0 40.1 011. 112.0 8.6 16.6 82.3 70.4 75.9 TOTAL LZAhILhTIU 436.8 490.0 680.9 66.9 610.0 9MY.2 934.0 1117.5 1487.8 1960.7 'I Including heed oflee beluneum of Somth African be.d banking institutions. lnluding unearned f innce chbrgo esntil 1SW6; unearnei finsnqe chefg" or. *e.luded *S freu 1,96. 'Statletieel/ o;ie aRvie: Neuibi. 190'. Departmset of Finane., Windhoek. - 217 - Table V.01: OUTsTAN0tDE AND OE7 IZDOCATro OF OP e C4TgRAL oaveW0e4r, 1w1/82.e90L9/9O end - - -h: 1961 19a2 se10 1964 1066 1966 1067 1066 1069 1990 (In aillione of endso) 30b0 04C^tSni ing: ~~~~...... '......'.... Debtb outst.anding: Stocks ..........*........ s.0o 173.7 328.1 458.6 564.4 623.6 604.5 869.7 549.5 549.5 Local loans ............. 0.0 0.0 0.0 0.0 0.0 28.0 22.4 10.0 41.2 38.6 RSA lo , ............... 0.7 o.6 0.5 0.0 0.0 0.0 0.0 s2.0 4O.5 39.0 Tore bonds .......... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 113.2 O9.0 oroe.gn loon ........... 8.7 86.6 114.1 174.5 222.0 109.7 16.O 160.4 141.1 71.0 Other loans ............. 0.0 0.0 0.0 0.4 0.3 0.1 0.1 1.8 1.0 0.0 Total debt outatanding ... 91.4 280.9 437.7 U18.5 737.3 640.S 795.0 &W0.4 691.5 714.1 Fiocal year: 1901/32 1942/61 1964/04 1914/61 1965/66 1900/67 1097/06 1966/69 1069/90 ________________ ________________ ______-------------------------------------------------------------___________ (In milion, of nSA tanda) Oebt flows: nrest. . 20.9 37.9 62.6 112.9 116.9 113.3 109.3 114.5 69.6 Amortizatione .0.1 0.1 5.7 6.9 66.6 45.4 61.2 97.6 251.3 Discounts and Fares. loseas ....... 1.0 12.6 1.1 1.4 1.3 4.6 3.2 20.6 84.9 Debt ervicese. . 22.0 50.6 69.6 12t.2 206.6 168.3 173.7 232.9 426.0 Now Ions.. 141.0 207.0 199.7 162.6 141.6 0.1 66.6 16.O9 73.1 (In Percent) Raties to QP, end of flical yeart Outstandingo t .............8..... 9. 24.1 82.7 84.7 29.5 24.5 22.1 19.9 13.0 Debt srvice. inl. costs end for.m. loss e ..... ..... 1.3 2.6 3.6 5.4 7.5 5.0 4.6 5.2 6.2 Mamroandum ite,03 (In millions of RSA Rand) fiseal year gros dometic product 165.9 1615.4 1987.4 911.1 260.6 3240.0 3862.2 4476.0 5166.6 Sourese *Ministry of Finance. e Include alma interest on short tarn overdeaf feal ities 4iing year and intrest oan loan levy on companies. *e Excludin redwemtion of loons guarantee by Govenment. whiach are includod in amertisation eymants of Central Govemrment. table see Includes discounts and forein eaclhange losses. - 218 - Table VI.Ol.e2 NAM11IA -- POPUSLATION WTDTS BY POKL&X?ON QULP5. 190.41111 109610 1961 1 to" t964 195 16 1"? 160 ._. __..... __.._.__,............___....... ___........._ ..__..___.__............... _..................... (In thusrand*) Totel .. . .. 1806.0 1340.0 1387.0 1426.9 1473.0 1516.0 1864.0 1611.0 1080.0 White ........... 75.3 76.4 ".6111 70.7 79.9 61.1 82.8 68.6 64.6 Non-wh ite 4utwoed by Modern economw .584.7 548. 559.4 575.2 5t.1 610.9 627.7 648.4 868.2 Non-white supported by traditional econom 696.0 722.0 750.0 7m.0 601.0 2.0 6.o 66.0 912.0 (In percent) Share of total economy: Total modern conomw 46.7 46.3 48.9 48.6 45.6 48.6 48.4 45.3 48.1 White S O S 7 S.4 S S 4 3 5.2 S I F.w.hitoeueported iy o4drn econom y 400 40.4 40.3 40.t 40.2 40.2 40.1 40.1 40.0 Non-white upprtedb4 0y traditional econW . 53. 3 53.7 54.1 84.4 54.4 54.4 54.6 54.7 54.9 Total econo. .100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 _- _ . _ _ _ _ ._.___-- --- -- ............-----...____......._ .... ..... ......---_--...._ ._ __ _.__ .r___ __ Source: iN Statistical Office/DIESA. UN Pmelgtion Oivieion/DIA. as referenced in eae Studies Go Financial. ------ Eceoic and Social AX efse for the Arrae.nt anta for Ind"endsene in Neibie: Peulatiop and Natioael Aceconto of Nanibia, (UNDt) fs. 26 and 49. *Prowisional etiatee. - 219 - Table VI.02.a: NAMIBIA - PRIMARY AND SECONDARY TEACHERS ACCORDING TO QUALIFICATIONS, …-------- ---__ -- ________- _____________- ______.________________ BY EDUCATION ADMINISTRATION. 1988 -----,-.----.-------------------- Under Un- Qualified* qualified** qualified*** Total ----------------------------------------------------------__------ Whites ........... 852 345 15 1212 Caprivians ....... 27 21 763 811 Damaras .......... 51 58 317 426 Hereros .......... 21 50 542 613 Kavangos ......... 32 44 1071 1147 Coloureds ........ 105 297 256 658 Namas .0........... S 109 373 532 Tswanas ......... 10 14 19 43 Owambos .......... 45 395 4480 4920 DNE .............. 299 321 1.78 1698 Rehoboth ......5... 1 217 197 465 Total: 1988 ........... 1543 1871 911. 12525 1987 .* ....... 1418 1734 8793 11945 1986 ........... 1268 1663 8190 11121 …-------_-_-..-.-e---------------…-------__--e-_-._-_-_---.e…_-_- Sources Statistics Office, DEA. as referenced in 'Base Studies on ----°- Financial, Economic and Social Aspects for the Arrangements for Independence in Namibias Education in Naribia,' (UNDP) Annez IV.4. *Standard 10 + 4 years or more teacher training. **Standard 10 1 to 3 years or more teacher training. ***Standard 7 or lower up to Standard 10 with little or no teacher training. - 220 - Table VT.02.b: NAMTBIA - REVENUES AND EXPENDITURES, INCLUDING EDUCATION, BY …--------____ ____ -____ -__ _____ -___ ---- __- -- v- __- _- __ ADMINISTRATION OF REPRESENTATIVE AUTHORITY. 1986/87 Revenues from: Total Educat. Educat. Own Central expend- expend- as a I (In thous. of Rand) sources Authority Total itures itures of total -----------------------------------------_--_____--___--_--_______ --__--_ _ Whites ........... 163849.4 31541.9 195391.3 199648.3 53891.0 27.0 Caprivians ....... 2558.4 25545.5 28104.0 26241.8 9836.2 37.5 Damaras .......... 3937.2 21508.0 25445.2 25908.3 9030.3 34.9 Hereros .......... 9183.8 22451.7 31635.5 37155.4 15704.7 42.3 Kavangos .......,.7044.6 37850.7 44895.3 41639.4 16973.5 40.8 Coloureds ........ 10638.1 23142.1 33780.2 34126.5 18768.4 55.0 Nams ............ 1770.0 24518.6 26288.6 25531.1 11885.2 46.6 Tiwanas ......... 1797.4 6461.0 8258.4 7930.7 1400.5 17.7 Ovambo ....... 19317.4 128641.1 147958.2 146719.8 59555.7 40.6 Rehoboth ......... 8538.8 20786.1 29324.9 28378.1 10228.0 36.0 Total ............ 228635.1 342446.7 571081.6 573279.4 207273.5 36.2 DNE ............... 77695 77796 74839.8 96.2 …--------------------------------------- ---------. -------------__ -----------___ Sources Reports of the Auditor-General for Fiscal Year 1986/87 as referenced in ------ "Base Studies on Financial, Economic and Social Aspects for the Independence in Namibia: Education in Namibia,8 (UNDP) Annex X.1. - 221 - Table VI.02.cs NAMIBIA EDUCATION EXPENDITURE IN RANDS PER PUPIL 1986 Education Pupils/ expend.. in Students thous. of Rands Rands/ 1986 1986/87 Pupil Whites ........... 16773.0 53891.0 3213 Caprivians ....... 17622.0 9836.2 558 Damaras .......... 9144.0 9030.3 988 Hereros .......... 14657.0 15704.7 1071 Kavangos ......... 31837.0 16973.5 533 Coloureds ......5.. 1773.0 18768.4 1190 Namas ............ 14667.0 11885.2 810 Tswanas ......... 850.0 1400.5 1648 Owambos 180812.0 59555.7 329 Rehoboth ......... 10388.0 10228.0 985 Subtotal ......... 312523.0 207273.5 663 DNE* ............... 41557.0 74839.8 1801 Total ............ 354080.0 282113.3 797 Source: UNZSCO mission, as referenced in *Base Studios on ------ Fin., Econ. and Soc. Aspects for the Arrangements for Independence in NamibLa: Education in Namibia,9 (UNDP) Annex X.5. *DNE (Department of National Education) figures include student of and subb-'Ay to The Academy. - 222 - Table VI.62.dy NAMIBIA - EDUCATION PROFILE: SUMMARY, 196 Number of Pupil/ Total Number of approved Teacher Teacher enrolmeot teachers posts shortage ratio District: Bothanlin .6 8................ s J 33 * 21.1 Bushmaliand 06............... 6 24 27 -8 24.9 Caprivi ................... 21068 822 881 -. 26.6 DamerIalnd ................ 10U1 462 474 -12 23.5 Cobabis .. ... . 4049 216 216 -1 23.0 Crootfontein .............. 4261 177 10 d 24.1 Hererolsnd-ast 6389..... 68 225 226 -1 20.4 Hareroland-feet 157........... ? 286 244 -6 25.9 Kaokoland 8847............... 347 122 122 * 27.4 Kreasburg ................. 2790 186 136 6 20.6 Karlbib ................... 8984 11I 11 -3 27.8 Kavengo ............*e..s 8508U 1209 1266 -59 29.b Keetmanshoop 626.............. 07 20 269 -1 21.6 Luderitz .......... a 2176 122 121 6 13.9 Maltahoho ................. 773 84 84 0 22.9 Mariental ................. 5641 262 264 -2 22.7 Namland ............-...... U905 l6 179 -S 22.1 Okahandia ................. 63"2 146 155 -7 24.1 Omaeruu ................... 1592 60 s0 * 28.1 OtJlwarono ............... 4018 211 214 -3 22.8 Outjo ................... es. le"1 so * -1 22.2 Owb. . ............... . .. . 190161 4962 4900 -3 80.1 Rahohbe ............. ... .. 11_ 411 497 -2 21.5 Swakopsund . .............. 364 294 29? -8 17.0 Teuneb ............ ........ SW 176 14 - 21.6 Windhoek .................. 31060 156 if8 -7 29.5 Total ..,.................. 374260 12526 12666 -162 29.9 Sources SWA/Nmbbil Dpartsant of Eceen i Affairs, Statistics, 1089. *Operational Inforstlon.9 Widheoek. - 223 - rable, YT.02.0t NAMIBIA - EDUCATION PROFSLE: SMWURY, 1966 ------------------------------------- T e a c h I n g R o o a * Pupil/Perm. Pupil/Tot. TotaI Other elassroom cl ssrooa onroiment Permanent Prefab. temporary Total ratio ratio Ditlet Ct: BCthrntn . .. .6 38 3C 19.0 19.9 Bushmanland C3. . 14 12 1 27 42.6 22.1 Caprivi . .21656 J4 27 336 661 59.6 3069 Domaraland 1J..1 1 89a 896 27.4 27.4 Cobabie . .4949 167 22 6 214 26.6 23.1 Croottontin . .4261 139 7 146 30.7 29.2 ber-roland-Eat .. .6Sa 176 1 6 16 35.6 34.5 Hereroland-Wet ... .61 l69 6 176 36.6 35.0 Kaokoland . . 847 71 19 6 s9 47.1 37.6 Kresburg . .2796 126 a 1 14 22.4 20.9 Karibib. . 864 167 * 115 28.6 26.6 Kovengo . . . 3C9 798 46 889 1176 45.3 306. Keeteanehoop . .6. 2 229 57 2 266 27.4 21.8 Luderit . .. 2179 ll 19 * 139 19.6 16.8 Maltahohe . . . 779 J7 87 21.0 21.0 Mariemntal . . . 5941 285 85 2 272 25.8 21.8 Nasaland U9.. . Sm 16 8 7 168 26.8 20.2 Okshandja . . . 3632 11 141 27.9 26.8 fOruru . . . 1592 4 4 2 29.5 27.4 Otjlworong . . 4916 144 U 194 33.6 24.8 Outjo . ....1958 U 6 28.5 23.6 Owmbe .... . . 19866 2641 6Su 1258 4749 78.4 40.8 Rehoboth .. .... 101U 489 6 6 451 22.6 22.2 Swakopsund .. .. . 6484 17" 2? 264 26.6 17.9 Tuseb ...804. 4 146 24 169 26.5 22.8 Windhoek . . . 81909 1249 125 S 1376 25.6 23.3 Total .8...... *74269 6187 1U 195 11718 44.7 32.0 Source: SWA/Namlbia Department of Economic Affalres Statisties. 1069. 'Operationol ------ Intormation.' Windhoek. *Ienludes clasc rooms, laboratorle, typlg roaom, handlcreft rees, ceokery room needlework room, art roomo and workshops. - 224 - Yeblo MIOM:¢V NAMYOXA - WODUATXOAL XMISTITUTXONS, i6n-0e l"S 1~8 190 7 196 Total ........... 11 1121 1120 1159 Pro-primary ............. 31 32 18 22 Ordinery echoot ........ 1o00 eYo71 198 1116 Technica l echoolc ....... I I 1 1 Agriculturel nehoole . 2 2 2 2 Technical lnatitutt . . 2 2 2 J Special schools ......... 2 2 2 2 Specialized education ... 8 8 a 8 Industrial schooln ...... O 1 1 1 Teoch*r training colle"n 5 9 6 6 Agricultural colleeg ... 2 2 2 2 0_o_00 ccc CDODOca C cOOC>O OO OOOOOC eCa-O O ecn_ ._ Source: SWA/Namibl D}irectoerte Developemnt Co-ordination, ------ OStat1atiet of SchoaleEs vearouo isouue. Windhoek. Mot,oso P eohpeooe y seheelo stih only I o'pk-ory elsesee. Ordinary ochoelo oil c(hoolo not othee defined, Includes junior peloeey, ocnTor prlP py, JufuioP oScondery, and senior oscodary eor o oe__inoe oq tho oQoro coatloned. Te4hnlcel scheelo - pvc*a toh"wicol coreens ae part of thtir usual crrieu"lunh Agricultueal sl oolIe - ° oeel ogeculturel courses as pert of their "tool gu elrs uO Technical loWtets - U~vhalcal aeftificatee are awarded at Xpeclol achaolo - aehoel In ohlch vocational or appropriate trenainn lo 1voea t" fuplo fop v4e3 peroersss Is not possible at an ordinary ochool. ?)rCf>ltele9 eSAOOOQ,1ea - P,,p)l ult-h §.-4s followiae dlipabititts ara oMo- arinna oflhW,, csatal, (or reterdation), nisprla Coa'l ehiCI fe c;ec Cit*aton dopPivetlon. Xndustprol oelo(l- 1 hl chi ldrca Ovo mGe=dSqw4 who woe, referred Nwore Ino t9tz of tho Ch idGao Ae3 IM. * 225 - T*h4e Vl.02.9: NAMIBIA: 1990/91 ESTIMATES Ot RECURRNtjI EXPENDII'r (0A lLJ.'AfTlN (Thousands of Rand) -- -- - -- -- - -- - -- -- - -- - -- -- --- - --I- - - - .. .. . .. . .. I. . . ... ........ ............ .... .. .. .. . REGION ADMIN FORMAL INFORMAL ARCH. SPORT AUX. SER. OlAIAt. OF PER PER (REG.) TOTAL CAP'TA PUPIL PO9N. (FORM) , - - - - - -- - - . . . . . ... -- -- - - - -- - ---.- - - - - - - - - - - Caprivi 5268.9 13020.0 284.9 0.0 24.0 93,0 18690.8 4.0 a.; 0.58 Kavango 3632.8 23551.3 49.0 186.9 165.5 0.0 27585.3 9 9 3.20 0.70 Ovambo 13809.6 101828.1 220.0 176.4 153.5 64.2 116251.8 24.J 0.16 0.54 Damara 4747.2 12586.3 27.0 0.0 0.0 35.0 17395.5 3i 0.1; 1.25 Herero 2741.0 25170.0 65.0 0.0 0.0 91.0 28067.0 6.0 0.21i 1.42 Cotoured 534.6 28209.0 333.0 0.0 255.5 129.3 29461.4 6.3 0.43 1.94 White 3448.0 66203.0 2818.6 1854.0 483.0 6721.0 81527.6 17.4 1.02 4.15 Tswana 233.8 2472.1 0.5 0.0 0.0 7.8 2714.2 0.6 0.04 2.49 Nama 416.7 17216.8 328.4 0.0 0.0 93.8 18055.7 3.9 0.25 1.49 Rehoboth 592.6 21235.3 7.7 70.3 198.5 121.0 2Z2B5.4 4.7 0.60 2.03 Nat. Ed. 37319.2 56980.6 2849.6 1547.6 3580.5 3324.8 105602.3 22.5 1.23 SUB-TOTALS 72744.4 368472.5 6983.7 3835.2 4860.3 10680.9 467577.0 09.8 MOE H.Q. 927.0 0.0 0.0 0.0 0.0 0.0 927.0 0.2 GRAND TOTAL 73671.4 368472.5 6983.7 3835.2 4860.3 10680.9 468504.0 100.0 EXP. AS % OF TOTAL 15.7 78.6 1.5 0.8 1.0 2.3 100.0 SOURCE: Ministry of Finance: Budget Estimates for 1990/91, - 226 - Table VI.03.as EXPENDITURES ON HEALTH ADMINISTRATIONS, 1988/89 Whites Owambos (In millions of RSA Rands) Total government allocation ....... 18.5 35.8 Central government ..... .......... 5.6 21.2 Second tier authorities .......... 12.9 14.6 (In RSA Rand) Per capita contributions to health 236 91 Central government ............... 72 34 Second tier authorities .......... 164 57 (In percent of total) Contributions to health: Central government ............... 31 59 Second tier authorities .......... 69 41 Source: Reports furnished by The Administration for Whites Estimate of ------ Expenditure and Revenue, Administration for Owambos (1988/89), as referenced in "Base Studies on Financial, Economic and Social Aspects for the Arrangements for Independence in Namibia: Health Sector Review: Namibia," (UNDP) Table 4.3.5, P.27. - 227 - Table VI.03.b: DISTRIBUTION OF HEALTH FACILITIES AS OF MARCH 1989 ________._________________________________________ Hospitals Clinics Total bedsl Population Number Beds Number Beds thous. pop. District: Caprivi ....... 46640 1 220 23 0 4.7 Damaraland .15210 2 167 11 11 11.7 Gobabis .34515 2 132 9 35 4.8 Grootfontein .34753 2 181 4 21 5.8 Korasburg .11688 2 64 4 6 6.0 Kavango .129987 10 763 34 1 5.9 Kaetmanshoop .31464 4 196 7 6 6.4 Ludeitz .13241 2 92 4 3 7.2 Mariental .35446 4 191 7 21 6.0 Okakarara .26793 1 60 6 34 3.5 Omarutu .15721 2 138 2 0 8.8 Kaokoland .20450 1 132 4 6 6.7 Oranjemund .5209 1 115 0 0 22.1 Otjiwarongo .25870 2 200 2 0 7.7 Outjo .10903 2 80 3 7 8.0 Rehoboth .34662 2 211 4 1 6.1 Owamboland .555948 12 2289 49 0 4.1 Shakopmund .22629 4 156 4 5 7.1 Tsumeb .24931 2 227 3 0 9.1 Usakos .13478 2 83 4 0 6.2 Windhoek .152479 4 1235 7 19 8.2 Total . ..1262017 64 6932 191 176 5.6 Source: Epidemiology Section of the Department of National Health and Welfare, ---_-- Windhoek, as referenced in "Base Studies on Financial, Economic and Social Aspects for the Arrangements for Independence in Namibia: Health Sector Review: Namibia," (UNDP) Table 4.1.1, P.6. - 228 - Table VI.03.c: INPATIENT CAPACITY IN THE ADMINISTRATION FOR -------------------------------------------- WHITES IIEALTH FACILITIES 1 APRIL 1988-31 MARCH 1989 --------_---------------_________------------------ Whites Non-whites Beds ..................... 603 105 Patients ................. 3841 3743 Patients per bed .......... 6.4 35.6 Patient days .............. 14277 16505 Patient days per bed ...... 23.7 157.2 Source: Epidemiology Section of the Department of National Health and ------ Welfare, Windhoek, as referenced in "Base Studies on Financial, Economic and Social Aspects for the Arrangements for Indep- endence in Namibia: Health Sector Review: Namibia," (UNDP) Table 4.1.5, P.10. - 229 - Table VI.03.dt MEDICAL PERSONNEL, 1989 ___.__________________, Medical Staff Health Practitioners* Dentists Sisters nurses Inspectors District: Caprivi ........,... 5 0 33 40 2 Damaraland ...3 0 10 21 1 Gobabis . .4 0 10 7 2 Grootfontein 6 0 18 16 3 Hereroland . .3 0 7 2 1 Kaokoland. 1 0 4 0 0 Karasburg . .2 0 7 10 0 Karibib . . 1 0 1 0 1 Kavango. 14 0 65 43 1 Kaetmanshoop 5 2 24 34 2 Luderitz . .8 2 35 7 1 Mariental 4 1 19 8 2 Omaruru . .2 0 9 6 0 Otjiwarongo 6 3 17 6 3 Outjo. 2 0 6 3 1 Owamboland . .0 0 329 208 2 Rehoboth . .5 0 16 10 2 Swakopmund . .21 3 54 27 4 Tsumeb .11 2 20 7 2 Windhoek . .124 18 426 172 21 Total .227 31 1110 627 51 Source: SWA/Namibia Department of National Health and Welfare, 1989. "Opera- ------ tional Information." Windhoek. *Includes specialists. - 230 - Table VII.01.as NAMIBIA - AGRICULTURAL PRODUCTION Crop Production (Commercial farming only) in metric tons -----------------------------------------------------------------__-- I 1985/86 I 1986/87 I 1987/88 I 1988/89 I-----------I … …-- -- --_ - -I … …------- I …_---- --- -- White Maize 7,600 | 18.289 I 6,779 I 14,415 Yellow Maize 1,100 | 4,618 I 1,000 I 1,560 Wheat - ciass A l l 306 I 1,755 | - class B 3,850 I 5,392 3,205 i 4,844 Sunflower seed I 600 I 1,162 I 524 I 833 Cotton I l I 141 I 142 Sultanas t I 1 264 Vegetables a/ l l I 3,500 I Peanuts i I l 195 Livestock Production in number of head --------------------------------------------------------------------- I 1985 1 1986 1 1987 1 1988 Beef & Veal j 301,046 j 304,084 j 348,200 I 327,002 Mutton & Goat I 747,466 I 685,247 j 786,611 j 778,688 Pork I 37.226 I 41,511 I 45,559 I 51,801 ---------------------I -- - - - - -- - - - - -- - - - - I - - - - - Other ---------------------------_-----------------_______-_-----__-------- I 1987 I 1988 Alfalfa (tons) | 4,084 | 8,361 Mohair (tons) I 106 | 112 Wool - Karakul, Merino, etc. (tons) I 2,343 | 1,878 Karakul pelts (number of pelts) I 835,321 j 793,231 Game (head) I 33,862 50,635 Eggs (dozen) I 2,737,500 3,540,500 Fresh Milk (liter) 116,494,000 1 1,549,800 Industrial Milk (liter) j I 996,000 l l a/ Estimate SOURCE: Department of Agriculture and Rural Development - 231 - Table VII.O1.b: NAMIBIA - CATTLE SALES AND SLAUGHTER ------------------------------------ (In number of head, 1980-1988) ------------------------------------------------------------__------ Year j Sold and Processed I Exported Live to Total | in Namibia I the RSA I Production 1980 226,735 I 236,435 I 463,170 1981 I 142,733 I 330,642 473,375 1982 I 138,363 j 184,954 I 323,317 1983 j 154,388 114,258 268,646 1984 156,389 I 112.501 268,890 1985 I 163,671 I 137,375 I 301,046 1986 I 161,906 142,178 I 304,084 1987 164,047 184,153 I 348,200 1988 I 166,925 I 160,077 I 327,002 -------------------------------------------_---------------_-------_ NOTE: A big percentage of the beef sold and processed in Namibia will eventually be exported to the RSA. SOURCE: Department of Agriculture and Rural Development - 232 - Table VII.Ol.cs NAMIBIA - AGRICULTURAL IMPORTSIEXPORTS -------------------------------------- Item and Unit | Imports I Exports I 87188 I 88/89 1 87/88 I 88/89 …_________________ __________I … … - - - -I … …__- - - -_I … …- - ---I ---- I Total Agric. Products (tons) I | 155200 I I 85500 Food - human consumption (tons)l | 127800 1 I 10000 I Food for animals (tons) 44100 | | 4400 Beverages (tons) j 49200 10000 | White maize (tons) I 56970 I 35663 I I I Yellow maize (tons) 10000 13000 I I I Wheat (tons) j 30041 29456 Sunflower seed (tons) I 8853 I 8847 Beef and Veal (tons) I I I 63334 I 62524 Mutton and Goat (tons) I I I 9734 | 10291 Pork (tons) | 1477 Eggs (dozen) 547500 Milk - self sufficient I _ - _ - _ - _ Vegetables (tons) I 26500 …---------------------,---------------------_--------------------------- SOURCE: Department of Agriculture and Rural Development - 233 - Table VII.01.d: DISTRIBUTION OF LAND IN THE COMMUNAL AGRICULTURAL SECTOR 1982 ------------------------------------------------------------- District Number of ownors Average farm size (he/farm) A: Mainly boof producing areas Gobabis 692 8823 Grootfontsin 461 6888 Karibib 138 10088 Okahandja 207 8918 Omoruru 118 7205 Otjiwarongo 293 8287 Outjo 387 8789 Teumeb 127 7036 Windhoek 444 7896 Total 2757 7017 B: Mainly sheep producing areas BOthani-n 187 12646 Mariental 702 8436 K-.tmanshoop 342 9618 Luderitz 66 19086 Maltaho. 188 10977 Karcsburg 249 13992 Total 1703 9165 Note: The farm size may tnclud- more than one holding. Source: Fiona Adams, et *l. 1990: The land Issue In Namibia: An Inquiry. ------ Namibia Institute for Social and Economic Research. - 234 - Table VII.01.*: POPULATION AND AGRICULTURAL ACTIVITIES IN CUMMUNAL AREAS 1989 ------------------------------------------------------------- Regions Population Agricultural Activity No. of livestock */ (000) Area LSU(000) SSU(ew) (ha millions) Kaokoland 20.6 4.9 Stock farming N.A. N.A. (20.6) b/ Ovambo 659.7 5.6 millet A stock 862.6 862 (49.86) Kavengo 142.6 4.2 maize, millet A stock 79.9 27.6 (136.2) Caprivi 65.7 1.2 maize, millet, sorghum N.A. N.A. (65.7) and draught cattle Damara- 87.2 4.8 limited Irrigation N.A. N.A. land (30.2) extensive small stock Bushman- 3.3 2.4 limited agricultural N.A. N.A. land (3.3) activities Horero- 32.6 6.9 stock 826.4 892.8 land (32.5) Rohoboth 37.9 1.2 stock and N.A. N.A. (19.1) limited cropping Namaland 84 2.2 extensive small 7.9 220.7 (13.9) stock ----------------------------------------------------_-----------__-----------__-------- Total 1022.8 82.2 N.A. N.A. (959.9) Notes: a/ LSU--Large stock unit and SSU--small stock unit. b/ Number In brackets are rural population. The population of Namaland is that for K-etmnnshoop. Sources: Populatioa--'Nam1bia: Dovolopment Information Roportg, table 2.2. ------- Others--Adams, et af. 1990: W The Land Issue In Namibia: An inquiry.' Data also assombled by the authors. - 235 - Table VII.01.f: RECENT TRENS IN AORICLJAIME Values at 1980 prices (Rand '000,000) (Includes fisheries unles- stated otherwise) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Growth Output value 166.3 171.8 155.6 121.1 107.8 116.7 116.8 149.1 151.0 156.9 -1.0 Share of total CDP (X) 11.5 12,0 11.0 8.9 8.0 8.4 8.4 10.4 10.4 10.7 -1.2 Annual change 24.5 3.3 -9.4 -22.2 -11.4 8.8 0.1 27.7 1.3 3.9 Fixed capital stock 631.0 630.0 630.0 630.0 628.0 624.0 620.0 616.0 611.0 607.0 Oros Co"etic Fixed Investment 22.2 21.3 21.1 20.2 18.1 16.3 15.6 16.4 16.3 16.6 Share of total CDFI (#) 8.1 5.6 6.7 8.5 9.2 8.3 8.4 8.4 6.9 7.2 Physical output (selected products only) Cattle sales ('000) 423.2 463.2 473.4 323.3 268.6 268.9 301.0 304.1 848.2 327.0 -4.0 Karakul pelt aele* ('000) 8006.8 1956.9 1346.3 880.6 717.7 825.2 666.5 695.0 623.", 654.7 -14.7 Small stock males ('000) 369.5 385.7 750.7 714.0 467.6 538.8 747.5 688.2 786.6 778.7 7.9 Moxse output (tonnes) 7600.0 18289.0 6779.0 1415.0 21000.0 26500.0 2.t6 Agricultural exports (lRand '000 at current prices) Cattle 72,3 119.0 74.3 48.0 51.6 64.7 83.2 138.9 148.9 154.9 8.5 Small stock 9.1 25.8 22.2 10.7 15.5 30.6 40.7 63.0 57.6 95.4 24.2 Kerakul pelts 42.8 20.1 13.3 10.2 16.2 19.7 18.4 84.6 34.6 25.0 3.5 Other 7.4 9.2 10.7 8.8 11.8 12.6 14.6 15.4 17.3 18.4 10.2 Total agricultural exports 131.6 174.1 120.5 77.7 95.1 127.5 166.9 241.9 258.4 293.7 10.1 Share of Total Exports (X) 11.6 18.4 11.9 8.3 8.6 8.0 7.9 13.8 12.1 11.0 External terms of trade 100.0 81.6 80.3 73.8 81.6 93.5 86.2 77.C 86.6 93.4 0.1 all products) lAricultural barter value 131 6 142.1 96.8 57 3 77 6 119.2 _15.2 188.4 221.2 274.3 10.2 Note: Annual growth rates estimated by log-l;near regression. Source: Stati*tical/Economnc Review, Namibia 1989. - 236 - Table VII.01.9: ACRICULTURAL PRODUCTION, 1999 (COMMERCIAL SECTOR ONLY) ------------------------------------------------------ Products Output (ton) Value (R mil.) Deficit (X lmport) Whout 4122 2.0W 89.0 Yellow malze lse 0.62 91.0 Whito maIze 22648 9691 64.0 Sunflower 707 0.64 92.0 Cotton 78 2.07 NA. Vegetables 18842 8.9W 66.0 Fruit 1605 1.46 e6.0 Source: Agronomic Board, Namibia ond personal *stimateo - 237 - Table VII.01.h: LIVESTOCK MARKET FLOWS 1979 TO 1989 ----------------------------------- ('000 Heads) Year 1979 1980 1981 1982 1983 1984 1986 1988 1987 1988 1989 The cattle market _________________ Factorio no 162.8 173.8 104.8 94.7 113.8 - - - - X 38.6 87.6 22.1 29.3 42.2 Swameat no - - - - - 118.6 120.9 112.4 116.9 120.0 18S .2 X 44.1 40.2 37.1 33.8 86.9 89.9 Oshakati abbatoir no no 12.0 8.6 11.3 5168.0 0.8 3.8 6.2 6.6 6.9 6.1 X 2.8 0.7 3.6 1.9 0.1 1.2 1.7 1.8 1.8 1.6 Butchers no 31.6 41.1 84.4 82.3 86.9 87.8 39.1 44.2 42.6 40.2 40.0 X 7.5 8.9 7.8 10.0 13.4 14.0 13.0 14.5 12.2 12.8 11.8 RSA controlled no 128.1 127.1 90.3 70.1 63.2 50.9 84.1 89.1 60.8 87.2 44.1 X 29.8 27.5 19.1 21.7 19.8 18.9 21.3 22.7 14.6 11.4 12.7 RSA open no 102.8 109.8 240.3 114.9 81.1 81.8 78.8 78.1 188.4 122.9 119.0 X 24.2 28.6 50.8 85.6 22.7 22.9 24.3 24.0 38.3 837.8 4.3 TOTAL 423.2 463.2 473.4 323.3 288.6 288.9 301.0 804.1 348.2 327.0 346.4 The emall stock markets Swameat no - - 28.2 69.6 86.6 89.7 67.8 41.1 44.0 49.0 87.2 X 8.8 8.8 14.0 16.7 7.7 e.o 6.8 6.8 8.3 Butchers no 121.5 131.7 139.8 140.0 142.8 148.8 143.4 118.2 137.6 182.1 117.0 X 82.9 89.2 18.6 19.7 80.4 27.3 19.2 17.2 17.6 17.0 11.2 RSA controlled no 82.6 80.7 186.2 178.5 118.0 89.7 148.7 142.4 244.2 248.9 814.1 X 18.9 18.1 24.7 24.7 24.8 16.8 19.2 20.8 81.0 81.7 30.0 RSA open no 185.5 148.4 898.0 888.0 143.7 212.5 402.8 398.6 880.8 860.8 629.0 X 50.2 42.7 62.9 47.8 80.8 39.4 63.9 66.0 45.9 45.0 60.6 TOTAL 889.6 836.7 760.7 714.0 487.6 588.8 747.6 685.2 786.8 778.7 1047.3 The markets for pig Swomeat no - - 0.1 0.6 0.8 0.2 0.2 0.4 0.3 0.2 0.0 x 0.4 1.7 0.8 0.4 0.8 0.9 0.7 0.4 0.0 Butchers no 818.6 816.7 83.0 a8.2 87.4 85.2 87.0 41.1 45.2 51.8 58.9 x 100.0 100.0 99.8 98.8 99.2 99.8 99.4 99.1 99.3 99.6 100.0 TOTAL 818.6 818.7 88.1 83.8 837.7 6.8 87.2 41.6 45.6 51.8 65.9 Note: *RSA controlledw rofers to exports und-r a quota agroemnt with South Africa. In ---- additlon, South African buyers operate In Nambian markets. Theos results *open ,xport *als from Nomibma. Source; *Development and Information Roport', Namibia 1990. - 238 - Table VII.01.1: AGRICULTURAL CREDIT: OUTSTANDING LOANS TO THE COMMERCIAL SECTOR BY SOURCE AND YEAR */ (1981-89, R million) ------------------------------------------------------------------__---------__----------------------------- Ysor at Ad-anced by the Bank loans Loans by Total credit Invostmont Total credit 3b March Landbank secured by government c/ (nominal terms) deflator d/ (1980 prices) mortgages over proporty b/ …-------------__ ----- --------------------------------------------__ ----------__------------ ------ _ _---- _----_ - 1981 65.2 18.4 24.2 107.8 114 94.6 1982 86 26.7 40.4 181. 182 99.8 1988 e8.6 29.6 39.8 136.6 149 91.7 1984 76.1 43.4 39.1 167.8 5S0 105.1 1986 85.9 44.8 48.9 179.1 188 95.8 1986 98.7 40.8 74.4 218.7 235 90.9 1987 102.9 49.7 88.1 240.7 282 91.9 1988 )08.2 63.2 93.2 264.6 297 89.1 1989 121.2 88 1 93.2 800.5 846 86.8 Notos: a/ Excludes leasinj *nd hire-purchase credit. b/ Excludos loans to farmers secured by other means. c/ More than 97 percent granted by the Administration for Whites. d/ Tho deflator has beon calculated by dividing domestic fixed investment in agriculture and fisheries at current prices with the corresponding invostmont at 1980 prices. o/ Tho amounts for 1988 end 1989 aro proliminary. Scirce: Development Information Report 1990. Statistical/Economic Reviow 2990 (for deflator calculations). - 239 - Table VII.O1.j: SUOSIDIES ON ACRICULTAL C.°EDIT Lons outstandang~ 1980 to 1989 Y'ar to Bank loans Cossercial Submidy Lsndbank Interest Subsidy Central Interest Subsidy Admin. Interest Subsidy Total Total 31 March ecured by interest long-tera rates Oovernment rates for rates credit subsidy form rates mortgages White- mortgage (prime) Wa (b) (c) [c(d) [ (g) -9)g) ] (i*) - R ail. (5) R oil. R il. (S) R oil. R mil. (5) R oil. R il. (S) R ail. R mil. R mil. 1980 no 0.15 0.0 60.7 0.05 6.1 na no na 1901 18.4 0.15 0.0 65.2 0.05 6.5 8.8 0.04 0.4 20.4 0.04 2.2 107.8 9.2 1982 25.7 0.15 0.0 6S 0.07 5.2 6.4 0.04 0.7 34.0 0.04 3.7 131.1 9.6 1983 29.5 0.15 0.0 68.6 0.075 6.1 6.6 0.04 0.7 32.0 0.04 3.5 136.6 9.4 1084 43.4 0.15 0.0 76.1 0.09 4.3 0.6 0.04 0.1 38.6 0.04 4.2 167.6 8.6 1085 44.3 0.2 0.0 85.9 0.1 8.6 0.6 0.04 0.1 48.4 0.04 7.7 179.1 16.4 1986 40.6 0.14 0.0 98.7 0.1 0.9 0.5 0.04 0.1 73.9 0.04 7.4 213.7 11.4 1087 49.7 0.125 0.0 102.9 0.1 2.6 0.4 0.04 0.0 87.7 0.04 7.S 240.7 10.1 19088 63.2 0.15 0.0 108.2 0.1 5.4 0.3 0.04 0.0 92.9 0.04 10.2 264.6 15.7 1989 86.1 0.2 0.0 121.2 0.12S 9.1 0.3 0.04 0.0 92.9 0.04 14.9 300.5 24.0 1990 ns 0.21 no 161.1 0.14 11.S no na no 92.9 0.01 15.8 254.0 27.1 Note- / Lsndbank interest rae: averaged wh-r- change occured during the financial year. b S Subidieo my be under timatd where ineases in the interest rates were not applied to outstsnding loans imeediately. c Comrcial prim raot data ry not be accurate in all cassa. d/ Oate for lending by the Adainistration for Whites in 1988-90 are provisional. */ Although th subsidy to th sector is significant in aggregate, the incoe by means of *ub-idioo per account *hould be seen in relation to totel fare revenue. The subsidy transfer per account is illustrated below with reference to LandbanK accounts only. Landbank No of Average Suotsidy Accounts loan per account (Rand) (Rand) 1980 3432 17694 1769 1990 1909 84376 5908 Soures: Namibia; Development Information Report; Urban-Econ (1990) ------- Annual Report; Land and Agricultural Bank of South Wnst Afric (1990) Landbank (personal comnscation) -- 240 - Table VII.Ol.k: FNDC's Mini-Loan Scheme: Interest Rates Charged ------------------------------------------------ ----------------------------__------------------ Equivalent Amount Interest Charged Interest Rate Borrowed Per Person Per Annum ------------------------------------------------ R 200 R 10 in 1 month 79.6X R 500 R 32 in 2 months 45.1X R 1000 R 80 in 4 months 24.1% R 2000 R 290 in 8 months 21.7X Average Commercial Farm Borrowing 18.0X Prime Commercial Rate 21.0X ------------------------------------------------ Note; The interest rates are calculated by ---- the authors. Source: FNDC. - 241 Tablo VII8011: MAIZE PRICE TRENDS 1985-90 1986 1986 1987 1988 1989 1990 Namibla prices (Rand) Nominal (a) 310.0 328.0 330.E 370.7 439.5 441.0 Interannual change (X) 6 0 3.2 9.S 13.8 0.a Consumer price index (base year 1980) (b) 181.4 206.7 231.6 26814 300.9 3265. 'Real' (base year 1986) (a/bs181.4) 310.0 289.3 265.1 267.2 265.0 246.7 Interannual change (X) -v;.7 -8.4 -3.0 3.0 -7.3 Exehang. rate (c) 2.2 2.3 2.0 2.3 2.8 2.e Dollar price (nominal) (d) (a/c) 141.6 144.5 166.7 163.3 187.8 172.3 World pric-c (US dollars) Yellow maize (Gulf fob) (e) 106,0 73.0 88.0 118.0 11' .0 113.8 Sea freight (f) 43.0 42.0 37.0 28.0 42.0 54.0 Dollar border price (g) = (eof) 148.0 115.0 123.0 144.0 13.0 167.8 NPC's (d/g) 0.958 1.268 1.366 1.13A 1.096 1.028 Notes: */ NPC = Net Protection Coefficient (soo Table 12 and text for discussion b/ Ministry of Agriculture economists in Namibia believe that Input cost inflation has followed the CPI closely. Changes In "realw producer price estimates shown in this table may therefore be indicative of changes in agriculture's terms of trade. Sources: Agronomic Board, Nemibia 1990 ------- FAO Global Food Information System Reports 1990 - 242 - Table VII.O1.m: WHITE MAIZE: NAMIBIAN IMPORT PARITY PRICES WITH ZIMBABWE AND THE REST OF THE WORLD AND THEIR NOMINAL PROTECTION COEFFICIENTS Year 1985 1986 1987 1988 1989 1990 Nominal domestic 310 328 338 371 440 441 vrices (R/ton) Rest of the World fob + sea freight 148 115 123 144 153 167 (US$/ton) (1) Exchange rate(US$/R) 2.19 2.27 2.03 2.27 2.62 2.56 Prices (R/ton) (2) 324 261 250 327 401 404 NPCs (1/2) 0.956 1.256 1.355 1.134 1.096 1.026 Zimbabwe Freight prices 180 180 180 195 215 225 (ZS/ton) Exchange (US$/Z$) 1.55 1.6 1.65 1.7 1.85 1.8 Prices in US$/ton 116 113 109 115 116 125 Prices (R/ton) (3) 254 255 221 260 304 320 Border prices 331 332 288 338 396 41.5 (R/ton) (4) NPCa (1/3) (a) 1.219 1.284 1.526 1.425 1.445 1.378 NPC8 (1/4) (b) 0.938 0.988 1.174 1.096 1.112 1.060 Sources: Grain Marketing Board Annual Reports, Zimbabwe Agronomic Board reports, k'amibia. Notes: NPCe - nominal protection coefficLents. a: assumes Zimbabwean exports are subsidized by the transport costs from the local market to the Namibian border. bt assumes includes transport costs. - 243 - Table VII.01.n: NAMIBIA'S IMPORT AND EXPORT PARITY PRICES FOR MAIZE (1986-1990) -----------------------------------------------------------__-- -------------------------------------------------------------------------__--__-------------------------- 1986 1986 1987 1988 1989 1990 Av Prico --------------------------------------------------------------------__-------__-------------------------- Zimbabwe export parity 126.17 92.97 98.37 121.97 133.92 148.30 120.12 Zimbabwe Import parity 170.83 137.03 147.83 168.08 172.08 187.38 183.49 Zimbabwe price 114.00 129.00 131.00 141.00 136.00 124.00 129.00 Average bordor price 141.81 141.81 141.81 141.81 141.81 141.81 Namibia export parity (Z) 108.83 121.03 128.63 133.08 124.08 113.63 120.89 Namibia Import parity (Z) 166.83 181.03 186.83 193.03 184.08 173.63 180.89 Namibia price 141.66 144.49 168.72 183.29 187.76 172.26 169.36 A#rage border price 160.69 150.89 160.69 160.69 160.89 150.89 Namibia export parity (RoW) 118.00 86.00 93.00 114.00 123.00 137.83 111.8i Namibia Import parity (RoW) 178.00 146.00 163.00 174.00 183.00 197.83 171.81 Namibia price 141.66 144.49 166.72 163.29 167.76 172.26 159.36 Average border prico 141.81 141.81 141.81 141.81 141.81 141.81 ---------------------------------------------------------------__------------__-------------------------- Note: All data are In US dollars. Sources: Agronomic Board Annual Report 1990 ------- SADCC Food Security Unit FAO Global Information System 1990 TranoNamlb (personal communication) - 244 - Tabl- VII.01.o: PRODUCTION COSTS OF PEARL MILLET PER HECTARE -------------------------------------------- Production Costs Commercial Form a/ Communal Form b/ Rand (person-days) Rand (person-days) Capital costs 262.2 84.7 Labour costs (R4/person-day) 27.6 (7) 122.4 (30.8) Management cost 20.2 (0.3) 0.0 Total 300.0 207.2 Break-even output (RB00/ton) 600kg/ho 845kg/ha Notes: */ Commercial farm: mechanized discing, planting, weeding, harvesting and threshing. b/ Communal farm: mechanized diseking - other tasks by hand. c/ Fertilizer application in both cases, 30 kg/ha. d/ Capital costs include the costs of fertilizers, seeds, machinery, services and depreciation. Source: Cost and labour data are provided by the First National C ------ Corporation experiment In Kovongo region; calculation Is done by the authors. - 245 - Table VII.01.p: AGRICULTURAL GROWTH PROJECTIONS Value In 1989 1990 1991 1992 1993 1994 1996 Exports (R '00,000) Beef 164.9 147.166 148.6265 161.6590 158.7780 162.1340 167.8729 Small stock 96.4 90.864 97.81764 98.29071 99.27862 100.2863 101.2690 Karakul 26 25.76 26.6226 27.81817 28.13772 28.98186 29.86180 Other 18.4 19.82 20.286 21.3003 22.86631 28.48868 24.86776 TOTAL 293.7 289.529 298.7826 299.6282 806.6647 814.8868 828.4610 ANNUAL GROWTH RATES 0.988 1.016 1.020 1.028 1.027 1.027 Value In 1989 1990 1991 1992 1993 1994 1996 Domostic output (R '000,000) -----------------_------------------------- -_------------------__-----------__----------- Beef 309.617 294.1381 297.0776 803.0190 315.4279 328.3447 841.7906 Small stock p1.414 122.3381 131.9537 142.8309 168.6242 166.6978 178.8208 Karakul 24.967 26.70671 28.47e88 27.2711e 28.08982 28.93200 29.79998 Maize 9.911 12.24939 16.13950 18.18740 20.89261 22.98176 24.82080 Millet 40 44.8 60.176 66.19712 62.94077 70.49366 78.9:290 Pulses 0.1 0.126 0.16562 0.196812 0.244140 0.881489 Oilas di 0.64141 0.706661 0.776106 0.863716 0.939088 1.032997 1.186296 Othor 18.4 28 26.3 27.8S 80.618 33.6748 87.04178 (inc fruit and vegetables) TOTAL 517.0404 526.2409 649.8019 678.0847 613.8209 852.4624 893.6241 ANNUAL GROWTH RATES 1.018 1.048 1.062 1.062 1.063 1.08O TOTAL (without millet) 480.4409 499.1269 621.8876 660.8801 581.988' 614.6712 ANNUAL GROWTH RATES 1.007 1.089 1.046 1.068 1.066 1.06B Note. Beof export projections include an allowance for bef exports to EEC ---- under the Lome agreoment. Source: Statistical/Economic Revlew, Namibia 1990. ------ Projection. by mission members. - 246 - Table VII.02.a: A4AMIBIA - RETAIL PRICES FOR FISH PRODUCTS (VINDHOEK, J!NE 1984) ITEH PRICE PROCESSOR/DISTRItBUTOR FROZEN FISH Fish Fingers (hake) 400 g 3.05 Irving & Johnson Hake Fillets 750 g 7.89 Irving & Johnson 600 g 4.99 Sea Harvest Hake Fillets (prime, deboned) 800 g 8.05 Sea Harvest Cape Whiting 800 g 4.89 Sea Harvest Snook Steaks 600 g 5.25 Irving & Johnson Deep Water Hake F111ets 750 g 5.99 Irvin$g Johnson Dressed Baby Soles 300 £ 10.45 Xrving & Johnson KRngclip 1 kg 3.49 Sea Harvest 800 g 14.79 Sea Harvest Oak Smlt-ed Haddock FlVlats 800 g 6.99 Irving & Johnson Seafood Cocktail Monk IFllets 400 g 5.75 Irving & Johnson CU IED flU Pilcharda- (tomato, chili' 135 0.89 ) 425 g 1.79 ) Lucky Star (brine) 423 £ 1.63 ) Glenryck (aincoed) 425 g 1.35 ) Sardines (in oil) 103 £ 265 Portugal Hackarel Fillets 190 g 3.19 BR Deutschland ___...... __ .....".......... _..___ .............. ------------------------- Sourcet Gmrundlagenstudi* Namibia. Band Ot Sektorstudie Flischvirtschaftg. 1969. - 247 - Table VIT.02.b: NAM1BIA - RAW MATERIAL INPUT AND UTILIZATION IN THE FISH PROCESSING INDUSTRY (1985) 1985 I Total I Canned I Fish Heal/ I Other I I t Fish Oil e1,---------- lo000 e ----------------- I __ __ __ _ _ _ _ _ _ _ Raw Materials ______ ______ I I I I Pilchard 5 S7 I 35 I 21 I 1 Anchovy | 51 - _ 51 I _ Stocker I 31 - _ 30 I 1 Ie--------------------- ---------------------- Total I 1391 35 I 102 2 Production Qty I I I I __ _ __ _ __ _I I I I Final Prod. 55 1 21 a/j 32 j 2 of which: I I I I Meal _ I I 26 I _ Oil g - 6 [--...---- in Millions of Rand -------------- -----------------------------------------------_ Production Coati 43.4 1 24.4 1 18.7 1 0.3 I I Ii Turnover I 55.9 1 37.7 b/I 18.2 c/! - _____ I I I I NOTES s a/ 2.4 illLon cartons. b/ 1,794 Undolton - canned pilchard. c/ 26,000 tons fish maI at 598 lands/tons and 6,000 tons at 445 Uandl/ton. SOURCIE g@rundlagenstudie Neambia, 3ad 6. Sektorstudis PLschwirtechaft', 1969. - 248 - Table VII.02.c: NAMIBLA - TOTAL CATCH ti JMABIA (FAO Estimates) … Year I Total lInshore-Fisheries I Tons (Lakefish) Tons 1977 I 42'.490 s 5o 1978 I 413,210 SO 1979 I 351,130 I 50 1980 I 252,612 I so 1981 I 278,599 I 50 1982 I 233,539 I 50 1983 I 364.728 1 100 1984 I 187,081 I 100 1985 185.520 I 100 1986 I 201.302 I 100 1987 519,518 l 130 I . I - l - -- - -- - -- - -- - -- - -------------- C SOURCEs *Grundlagenstudie Nuaibia. land 6: Sektorstudie Fischvirtschaft, 1989. - 249 - Table VII.02.d: NAMIBIA - LOBSTER LANDINGS 1950-1988/89 a/ Year Tons e. .. ..... - _ -__ __--I --------____ 1950 6.500 51 I 7,300 52 13,100 53 1(,,300 54 I 9.100 55 I 9.200 S6 I 7,000 57 7.700 58 J 4,400 59 I 5,800 1960 I 4,300 61 I 5,800 62 7 7,200 63 I 5,900 64 I 7300 65 I 7300 66 I 8900 67 I 5900 66 I 6,500 69 I 80500 1970 I 2,100 71 I 2,200 72 I 2,396 73 I 3,179 74 3,193 75 1 1.697 76 1 X,400 77 I 1.796 78 I 1,197 79 I I SOA 1960 1 X,249 6l I 2.891 2 1 X,353 63 I 1.641 $3/84 I 1.66 64165 1,.20 65/66 1 1,769 6/647 1.360 67/66 | 1,764 66/69 I $30 a/ Lu4erita Say SOURCE, 90rundl&genstudA. eAUibt. land 6G Sekto rstuwile Flchvirtschaft* 1969 - 250 - Table VII.3.a: IAMISIA - MINING PRODUCTION ACCOltG TO caOMODITY, 19s-99 __._________________ _ ______________________-__f-e---__________________________________ Units 1S0S 1964 1965 1966 1907 1906 1969 Precious Metals and Minerals: Gold (contained in blister) ..... he 296 19 194 1.4 172 240 872 Slivor (contaimnd In blister) .... tonnes 93 96 99 1" 96 1i6 leS Diamonds ......................... carets 9694" 031 92060 1U96069 1337261 974566 699776 Semi-Precious stones: (hand sorted) Agate ............................ tonnee 47 41 Of 67 I6 99 9J Amthyst ............... .......... tonnee 162 11C 21 37 199 175 149 Chrysocolla .......... ............ kg NA NA NA 1 92t9 4096 36 Dloptse ......................... ke NA NA NA 52d SO 130 190 Roma quartz .......... ............ tonne 34J "0 299 172 Us 2226 602 TourmIlIno ....................... kge 5 a" 74U 2S76 1709 41 937 Metal and mineral conc;ntrates: Arsnic trioxide (7S As) ..... ... tonne 112 25"4 2471 22 1964 2964 2399 Caelum (eofined metal) ..... ..... tonnee t1 40 so 61 51 1in s Copper conc. (3 Cu) ...... ...... tonnre 146153 136011 143761 16703 1106 101610 192662 Copper blister (993 Cu). tornne 42U 48973 47611 5145 37653 42103 37976 Lead cons. (NO Pd) ..tennee "6690 79019 0423 7775 754 90619 79664 Lad rfInd tal.o ... tonnee 35416 20039 31 40047 41634 44447 44163 Pyrite (03 S) .tnnee 11023 172315 17438" 160451 12326 220662 196531 Sodium Antimonate .. tonnee --- -- -- -- 51 16 73 Tantelite cone. (163 T) .kg 2775 6116$ l13 01Si 13m 695 60e Tin eonc. (0S7 Sn) ... tonne 1i66 149J 14U 1313 1637 1772 1519 Uranium Oxide .tonnes *-400 *-4110 *-401 *-U990 *-4175 NA NA ? Zinc cone. (23 Zn) .tonne- 56303 SW 574906 6sa1 75722 71655 70905 Industrial minerals: Aebligonite (6.53 L12) .tonanee 4 Fs 49 52 1J0 134 181 Geanite .. nne NA NA NA 71 783 12096 6490 Lepidolite (43 L12) . tonne JS 10 71 S2 61 19 41 Liesatne (calcite for flux) . tonne 16010 21633 J 2219 31*71 - - NA Marble .. tonne i 206? 27U 4215 4149 11603 Potalite (43 L12) ............... tonnee 73 62 1753 751 749 1406 1226 Salt (comon) .................... tonne 1S0356 W4AS0 147"5 12621 123571 141046 132357 Soit (table) ..................... tonnes "1 740 U 475 470 573 75 Salt (rock) ......................t en a -- a0 5611 651 9" i263 7216 Silica (.9911 Si) ................. tonnes 140 57 040 1041 2166 a 0 Silica (.063 Si for flux) ........ tonne 3071 . 125M 645 S16 2912 a 6 Woliastonita (hand sorted) ....... tonnee 11" - 173 "1 S90 0 Source: Department of Econmic Affairs. *Producte of IMorted concetrate Irclda. - 251 - Table VIZ.02.b: MMnIDA - OPEtATING MINES AN1D J IES, 19t6 I DISTRICT I OPEtATUIN MINE OR QUARRY IC0RODITY PRODUCED I NUWE OF I I I I EIELOYEESI -- -- -- - - -I - - --- - - - - - - I-- - - - - - - - - - - -I-- -- -- I I I ~~~I I I Dameraland lUIi Tin Mine Tin, tantlite 1 426 1 jGrget ontein IPletvoldt Amethyst Mine Amethyst i 1 I IKo.bet Mine ILd, Stilver, I 56 I I ICopper I I IIII I IK&raosbur SBell Ross Mine IRoe, Quartz | 12 I I IMickberg Roe* Quart Mine IRose Quartz I 11 I I ISeveri PIloers Mine IDIaomnde 7 I IYaterput: Mine lAgtO 28 1 |Kookeland ouoo Mine IChrysecolla, dieptaee I 6 I I I I I I Kriblib IChryotal Tin Mine ITin I 19 I I IJ4J o eeger Minee Iwarble, I I IKoekemo e Mino/Claim_ ITourmllne I I Malsorworke Karibib IMarble I s9 Navachab Mine Iold I 210 I lOutjua Mine IToumaline, quartz 26 Iftellioandro Marble Marble, 1I IPsukep West Tin Mine ITin I I | ISWA Lithium Mines iAmblyonite, lepidolite, U NiB I I Ipetallto, quartz, beryl I lUsakee Tourmline Mine ITourmallne 6 I I lUsakos WVllastnite Mlne IWollostnit. I 5 | |LeiX ~IC ID og *t ILuderitz ICom D Iamonde I 466 I INamlblo Wet Coast DiamndolDlamonds 6 I I 5ftoeh Pinah Mino ILad, sinc, silver 41 ISIncller Mine Rose Quartz 7 I I ISeonnber Diasants IDioonds I *2 ITidl Diamlods IDI _nd 1 10 I ~~~~I II lOtJlweroeao lOkerueu Flourepar Mine Ifluoreper 100 IRehoboth IGoldsn Valley Mlne IGold, silver I 54 |Swakepsand lNoffnwngetrohl Mine IRose Quarts 11 I INmIbIa Granite Quarriee lGsanite I n2 I 'Roesing Uranium Mine JUrnium 2401 1 ISaoft Coupy lSIt I s I I _ ISaSalsGoes 5si I 4* I iSnoo Solt halt 1 245 Ilnc end LJed Nlbi Lad, sine, stvr 140 Tumab iTumb Mlno iCoppr, lod, silvelr, I 2 t I I Ilareenc, cadmium, alntlmnyl I 1Windhok I. Jo Ne Mcoiene IOtJihaes mine ICopper, pyrite, silver, I 571 1 I I bold I I I _ I _ _ __ _ I IO I I Mueo o abiI total Number of Employees 18641 __ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _. _ _ _ _ _____ _ I Source: 1. 'N'eiblon Mlning Enterprises, Mine and Employmnt¶, S. Galloway, 1909, Windhoek. 2. *Labeur Statisties, ISO", SUA/hNaibli Depertment of Eeonomic Affairs 1069. Wlndhoek. 8. VoNnibia: Develeoipnt Informtlo Report, I9M, DepartmOnt of Ecomemic Affairs, Winhek. *j SI I a * .0 .P . SP . S SO ..z4 Wo, 'I n I *4Z EW , ................~- ... * a l o- 02 I 0 ~~~ : ~ .. .. . 4. . . .. .... . 4.4 . ~: . *.4eq.4qmS @e4"*e 5"~~ "B t*!*e*a"°^ 0 S 45.4. 5_ 0 .4.4.4 ..4.4.4.4 W5 S a, 14 o I : I.t. -S 0J z61 ... . . .. . . . ...... 0a -I I _ . S 6: .4 - * "r"^***""^* * - I - - - - - - - .4053 6 1W 4 a1, I1 V 0' 55 *_ *9"mii*Siiom832iS.ii5 3 5 laI S I-I 0. S Wet I j _ * I ! . oe s .£ ^~~~~I 35*1 e***O_**o_ztX" *~~~~~~ - -° -¢ - -e"ii -iX"iinjo -d CL1 5 :.: ; : 5 4 e to ~~* a ------------_ t mg , ~~~~ is .4~~ --. -U. --- I , ILl S ,' WW a, * ,~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ I. - 253 - Table VII.03.ds NAMIBIA - VALUE OF MINING SALES ____ ___ .._ ___ ___ a__e._e-- BY COHKODITY, 1988 I COMMODITY I SALES ICONTRIBVTION I I I (R'000) I (t) IDiamonds 1 653500 1 38.1 ICopper 1 228641 1 13.3 1 ILead I 62860 1 3.7 I 1Zinc I 60268 1 3.5 I ISilver 1 52195 1 3.0 1 IBy products (1)M 18847 1 1.1 Tin I 17020 1 1.0 I Salt 3774 1 0.2 1 1Other (2) 619558 1 36.1 1 -- - - -- - - -I-- - -- -I-- -- - -- - ITotal I 1716683 1 100.0 I Notes: (1) Includes gold. arsenic, pyrite, antimony. cadmium. (2) Includoe uranium, lndustrial minerals, semi-precious stones and dimension stone. Source: 1. 'Nanibiat Development Information Report 1990', Department of Economic Affairs, Vindhoek. 2. 'Namibian Production and Sales of Metals and Minerals', S. Galloway, 1989, Windhook. - 254 - Table VII.03.e: NAMIBIA - VOLUME AND PRICE INDICES OF …----------------- _------_- Z- _----- MINERAL EXPORTS, 1970-1988 …_______,__.___________._ (1975-100) …_____________________________ YEAR I VOLUME PRICE I 1970 I 93.8 I 56.2 1971 1 80.4 I 5.4 1972 I 82.5 I 74.2 1973 I 99.8 I 93.9 1974 87.7 I 108.6 1975 I 100.0 I 100.0 1976 1 93.0 I 132.8 1977 119.0 202.3 1978 141.8 I 213.5 1979 I 121.7 I 279.6 1980 I 119.4 I 315.4 1981 101.1 269.4 1982 j 103.3 I 303.2 1983 99.8 j 296.0 1984 I 96.8 I 364.5 1985 j 101.9 522.1 1986 I 93.9 I 668.6 1987 94.1 537.2 1988 I 97.9 626.9 Note: Numbers for 1986, 1987 and 1988 are provisional. Sourcest 1. 'Namibia: Development Information Report 1990', Department of Economic Affairs, Windhoek. 2. 'Operational Information', SWA/Namibia Dept. of Econ. Affairs, Mining Economics 1989. - 255 - Table VII.03.f: NAMIBIA - EMPLOYEES AND SALARIES IN MINING ------------------------------------------ INDUSTRY 1975 TO 1988 a/ _____________.__________ I YEAR I TOTAL I TOTAL i AVERAGE I I I EMPLOYEESI SALARY I SALARY I I I |(R/annum) I(R/annum)l I I I ~ ~ ~~~~I I 1975 18417 38043294 2066 1976 j 19897 58193306 2925 1977 I 21230 I 74889949 3528 1978 I 19269 I 76775164 3984 1979 I 20074 I 90302021 I 4498 1 1980 1 19776 1108941413 1 5509 I 1 1981 1 19240 1123804456 1 6435 t 1982 1 17773 1132157914 1 7436 1 1 1983 1 16876 1141299700 1 8373 1 1 1984 1 15624 1139441000 1 8925 1 1985 1 14869 1152825000 1 10278 1 1986 1 15019 1165442000 1 11016 1 1 1987 1 13799 1184034000 1 13337 1 1988 I 13770 1241553000 1 17542 1 Notes a/ Cash only. fringe benefits excluded Sources: 1. wNamibiat Development Information Report 1990', Department of Economic Affairs, WUndhoek. 2. 'Labour Statistics: 1988', SWA/Namibia Department of Economic Affairs, 1989, Windhoek. - 256 - Table VII.03.g: NAMIBIA PROFITS, TAX AND EXPENDITURE OF NAMIBIAN MINING COMPANIES; FOR SELECTED YEARS, 1980-1988 (R million) I YEAR IPROFIT a/ITOTAL bi ITAXES c/ I MINING I EXPENDITURE PUBLIC I PAID BY ITAXES AS I------------------------- ---- REVENUE I MINING I PERCENT I I AMOUNT I ICOLLECTEDICOMPANIESIOF TOTAL ITOTAL d/ ISPENT IN ICAvITAL e/1 NAMIBIA I I I I I I I I I I I 0 I * 0 I _ - _ _ _ I __ _ I _ _ I ___ I 1980 I 457.1 1 337.8 182 5 I 54.1 I n.a. n.a. I 112.4 1981 | 253.6 | 291.8 151.1 | 51.8 453.5 I 280.7 I 76.6 1982 I 257.4 I 436.0 55.0 Q 12.6 467.3 I 264.9 I 47.6 1983 I 241.9 i 453.9 I 48.3 I 10.6 I 439.9 I 292.5 I 40.8 1984 I 278.7 5 520.5 i 110.2 I 21.2 I 438.3 I 301.1 I 31.8 | 1985 | 650.7 | 651.1 133.9 20.6 491.3 | 324.7 31.9 1986 I 778.7 j 896.3 241.8 I 27.0 I 655.0 I 337.2 I 75.3 1987 I 477.9 I 1121.1 282.1 I 25.2 653.7 389.5 I 94.5 1988 I n.a. j 1308.7 273.0 20.9 n.a. I n.a. 170.8 O _b_ … _ O O O__OO CO CfO 0 f Notes: (1) Net operating surplus. (2) Excludes grants-in-aid received from RSA. (3) Excludes Non-resident shareholders tax. (4) Operating costs and capital expenditure. (5) Gross fixed investment. Sources The Chamber of Mines of Namibia, 1988. What mining means to SWA/Namlbia", Windhoek. - 257 - Table VII.04.a: ESTIMATES OF VEHICLE OPERATING COSTS IN NAMII8A -- MID-1990 (in Rands) Surface Roughness Vehicle Operating Costs Average Measurements per Km. Vehicle Operating Type of Pavement Speed IRI Ql Autos Heavy Trucks Costs per and Conditions Kms/Hr. Km. Super Highways 110 1.53 20 0344 1.415 0.505 New Pavements 100 2.0 26 0.364 1.442 0.526 Older Pavements 90 5.0 65 0.463 1.600 0.634 Poorly Maintained 85 6.15 80 0.529 1.666 0.700 Pavement Maintained 70 8.0 104 0.622 1.799 0.799 Unpaved Damaged Pavement 60 10.0 130 0.754 1.957 0.934 Poorly Maintained 40 15.4 200 l.;3 2.460 1.381 Unpaved Note: In the estimation of this table, vehicle operating c5Sts for Mid-1988 supplied by the Namibia Department of Transport (see Memorandum of 6 March 1990 from H. du Plessis to F.W. Poolman) were extrapolated to Mid-1990 using inflation rates of 15 percent per annum. The average vehicle costs assume 85 percent light vehicles and 15 percent heavy vehicles as representative of Namibia conditions. - 258 - Table VII.04.b: ESTIMAT_ Of ECtJIVALENT SINCLE AXLE 18W LO. LOAD RATES (ESAL) Vehielo Tore (Kg) Payload Total Ave- Averago ESAL Load Percent Propor- ESAL Percent Typeo (Kg) Weight rage Weight Factor Vehic!e tion of Loads Per Allocs- (Kg) No. of per Axle by Claos Average Km. of tlon of Axle, Dai ly Rooad ESA Load Traffic Vohicle- Km. Small Car 0" 4U 1, se 2 6ee 6.s63 J4.4S N.A. N.A. NA. idium C6-r 1i26 46 1,666 2 * 66 0.044 34.4X N.A. N.A. N.A. Pickup A 1,486 1,400 2,8t3 2 1,416 0.079 81.21 N.A. N.A. N.A. minibus TOTAL ULCT 2 O6N 0.658 10.61 e.65 6.09. 81.6x VEHICLES Bus 6,O5 4,61 10586 2 5,275 6.293 4.6X N.A. N.A. Medium Teuck 5,6 1166 16,6 2 2 6,616 0.44S M 8.21 N.A. N.A. ienvy Truck 6,466 16,06 22,466 8 7,467 0.416 S 6.2J N.A. N.A. Artie. Truck 14,706 i2.6O6 4e,7e6 6 90.40 8.619 23.01 N.A. N.A. TOTAL H4EAVY 8 7,994 *.444 1"601 6.15 0.20 60.6X TRUCKS 'Estimted as the product of the number of axise tl_ thie 4uRivalent single sxle 10,666 lbe. load faetor, tieol the proportion of averoge daily traffic. N.A. denotes information not available. - 259 - Table VI1.04.C: ESTIMATION OF TRANSPORTATION EXPENDITURES FINANCIAL YEAR ENDING 31 MARCH 1991 (In Rands) Current Expenditures Road Transport Civil Aviation Other el Transportation Administration R 14,984,000 02 Construction of Roads and Airports 1,491,500 es Maintenance of Roads and Airports 86,619,800 04 Control of Road Traffic 6,032,500 aS Control of Civil Aviation R 7,868,900 0s Control of Water Traffic R 100,000 07 Provision and Maintenance of Equipment 33,614,800 08 Provision of Meterological Service 1,733,600 09 Planning and Design of Roads and Airports 2,684,800 10 Government Garage 9,400,000 R 8133,627,400 R 87,8683,900 R 21,833,800 Capital Expenditures Eros Alrport-Erection of Plane Sheds 236,000 Road Construction Projects 17,896,000 R f161,622,400 R 38,098,900 R 1,833,800 Source: The budget figures come from State Revenue Fund. Estimate of revenue and expenditures f5or-the Financial Year endino 31 March 1991, pages 201-212. - 26C - Table VI 1.04.d: ESTIMATION OF REVENUES -- STATE REVENUE FUND FINANCIAL YEAR ENDING 31 MARCH 1991 (In Rands) Current Expnnditures Road Transport Clvil Aviation Other 30801 Tax and Duties 12 Levy on Fuel R 120,000,000 30.03 License* 0S Vehicles and Related Feec 12,000,000 81 21 Department Revenues - Transport 01 Airports R 1,100,060 e2 Road Trancport Board 300,000 08 Traffic Services 100.000 04 Los' Equipment/Stores 200 05 Obsoluta and Worn Out Equipment 400,000 08 Sale of Fuel at Windhoek Airport 40,000 07 Leasing of Airport & Airfield Facilitioe 46C,200 08 Sale of Wator and Electricity 24,000 09 Private Tolophone CalIs 4,600 10 Miscellaneous 9, 600 R 132,800,200 R 1,596,200 R 87, 200 Source: State Revonue Fund. Estimate of revenue and Expenditures to be Recelved on the State R7.-'nue Fund durina Flnancial Year ending 31 Mareh 1991, pageo 9, 10, and 17. 2-3 - 261 - Table VII.04.e: ROAD EXPENDITURE ALLOCATION SUMMARY FINANCIAL YEAR ENDING 31 MARCH 1991 (in Ranas) Expenditure Items Budgot Costs Alloc6u;on Basui Light Heavy Vehicles Vehicles 02 Construction of Roads and Airports a Pavement Costs (711) R 1,044,611 Equivalent Single Axl- Loud* R 323,630 R 720,390 b. Clearing, Earthwork A Drtinago Costs (381) 447,460 Equivalent Avg. Daily Traffic 353,490 93,960 R3 Maintenance of Roads and Airport a. Dependent on Axle Loadn (706) 46,663,80 Equivalent Single Axle Load* 14,434,800 32,129,060 b. Dependent on Time A Weathor (391) 19,966,94 Equivolent Avg. Doily Traffic 16,766,190 4,190,7S0 64 Control of Road Traffie 6,632,86W Vehicle Permits Issuod 2,616,250 2,618,250 07 Provision A Mainternnce of Equipment 63,814,80 Equivalent Single Axl- L41*s 10,420,596 23,194,210 f9 Planning A Design of Roads and Airports 2,684,800 Average Doily Traffic 2,197,080 387,720 10 Government Caraeo 9,406,066 Equivalent Single Axle Load* 2,914,00O 6,486,000 Capital Expenditures for Road Construction *. Pave_mnt Costs (O1) 12,620,606 Equivalent Single Axle Load. 3,883,220 8,843,280 b. Clearing, Earthwork A Drainage Costa (3 1 6,308,60S Equivalent Avg. Doily Traffic 4,241,120 1,127,380 01 Administration 14,964,60O As Percent of the Sum of All 6,293,289 8,690,720 Other Costs R 161,622,4f6 R 83,342,880 R 88,179,720 - 262 - Table VI 1.04.f: ALLOCATION OF REVENUES FROM VEHICLE LICENSE FEES FINANCIAL YEAR ENDING 31 MARCH 1991 No. of Vehicle* Licans. Feeb Total Revenuo (Rand) From License Fees Light Vehicles Motor Cars 13,446 R 72 R 986,040 Panol Vane 4,745 R 84 398,680 Minibuses 663 R 84 46,462 19,638 R 1,413,072 Heavy Vehicles Buses 398 N.D. Lorries, Trucks and Truck Tractors 6,214 N. D. R 106698 Tral lere Semi-TraIlore 1,783 N.D. All Other 194 N.D. 8,689 R 12, 00O,0N 'The vehicle fleet figures come from Namibia Department of Economic Affairs. Econ Info 1990, page Z2. bTh. liconse fees come from tho Namibia Ministry of Finance. Office of the Roceiver of Rovenue. 'Dotermined as a residual. N.D. denotes not determined due to lack of data on the number of vehicles in each vehiclo weight category. - 263 - Table VI 1.04.g: AIRCRAFT MOVEMENTS AND PASSENGER ACTIVITY AT SELECTED AIRPORTS Eros Aorodroe Windhoek International Koetmonohoop Airport !988/89 1989/90 1988/90 1989/90 1988/89 1989/90 Aircraft 13,619 16,035 6,202 5,568 2,772 2,471 Movements Poosengor 62,091 70,867 803,012 809,657 3,688 4,893 Movements Source: 1988-89 figuroe come from the Namibia Deportment of Transport. Goneral Overview of the Rood and Aerodrome Infrastructure In Nombl. Windhoek. Feburary 1990, page 17. 1989/90 figures wore supplied by Mr. 0. Riedol. Namibla Department of Transport. Personal Communicati-n dated 17 October 1990. - 264 - Table V1S.01: 4Z61A - IW StJ. 16 Halo P.1s Total 5ecc,on A: s orccuetion Proessional, tchnical Ged reletd rko............ 12 12l 21 Ami-nestrativ. -. .nu n zrial lS 176 2S0 2102 Adoinissrative clericul and roled I orklere . 6414 10209 1is Sale* workers .............. 5743 430 1009 Servi c worlkera * . ... ................................... M 7 27949 37136 Fare and For. workers, fiehcr_n, hunter. ..36.03 103o 36m Production and Construction Workers . 17764 64o 1"0 Ensin-e and equipment oporstorB . 7793 73 gut ConeraI laborers . 26246 2107 Sa6 Total section A . 124307 6046 10479 P U * L I C 5 1 C t a It Publ ic Privat-e Priv- t Total Central Repr_e. Local Publie TO"l aecter sector sector Total CS total) goat. autlar. au'hor. coiP. Other public (I sublic) (total) (S priv,) Section O: Sy induatr.al group snd contrel Agriculturu, Manting. Foreetry and Fiahing .............. 36071.. 30 19.5 0 0 0 0 0 0 0.0 36071 27.9 Mining nnd Quaryin .10062 5.4 0 0 0 0 0 0 0.0 10062 7.8 Manufacturing .........9., . 9442 5.1 20 0 0 617 0 66T 1.2 6755 6.6 Electricity and Water Supply 1273 0.7 0 0 0 1273 0 1273 2.3 0 0.0 Construction ........ ........... 12057 6.6 10" 0 0 0 0 106 2.0 11573 6.9 Trde. 20394 15.9 246 1 10 1430 0 1706 3.1 276fb 21.4 Transaort and Ccaeunicstions ... 7 60 4.3 6 0 0 0 as 0 O6 11.5 1497 1.2 Financial end Suainema Service 4327 2.3 0 0 0 26 6 2q 0.5 4034 3.1 Coamanity, Social and Personal Sarev coo ..e.................73667 39.9 14474 24471 J136 1219 100 4366 79.5 29600 2S.0 Total *esion 6 S 4793 100.0 32126 2446 NU 4t17 10 5l 3 1U 100.0 129460 100.0 sUo Total enloe ent) G0. 0 12.0 1. J 2.0 27 0.1 2. 9 70.1 loupe.: ltagpggr Survey: 1966, Di rectorate: Oaeoeenlrt Ceerdinatlen 0 ,O pr_t of Oeerg,aet Affeir-. - 265 - Table VIII.02: NAMISIA - MANPOWE0 SURVEY, 1904 -....,.-...-------__-_--------- ____________.._________________________________._________._______.________________ E a p I o y a %^ ae Vale Female Total Section A: Occupational groups Protoesional, semi-prof. and technical 767 0 9610 17179 Menarrell, executive, end ciednistrative 465U 751 4607 Cl-rical ............................... B6493 7515 14100 Sales and related work . 2977 2761 6766 Mining and quarrying ctlvitie .. , 2035 O 2665 Trensportation, delivery, and emo un. 4974 45S 6427 OSSW In metal, plastics, 6otor industry, 14 a 1498 OS8W in building and construction work 125U5 9 12455 Procee sng of wood and furniture. 267 U5 32 Manufacturing of clothes and textilee 14 $40 524 Food and bevorage PAM procse . .c 1552 291 1638 Leather and *hoe processing .6. 1 64 PAM of fiber gles*, glass, ce_mt, etc. 277 2 279 SASSW In PhI of chemical and rubber prodso 212 26 233 Printing and paper manufacturing . 7o 5 1in Supervisors and 0SSW, n.e.c. OS1 492 1361 Serviceso public, personal, and domestic 6t07 566 14564 Labourers... ............................... 4990 2606 52541 Total section A .......................... 113777 86529 144166 ~~~~~~~~~~~~~~- *-t-----*---o--v---w--------*-----w------------- A * t I * a n o Appren- Male Femle Total ticee Total Section H: Artisans and apprentice Metal and engineering trados . .16......... 11l4 1 l165 216 1401 Electrical tradee ...6.4 1.6..... 5 6C 146 N0s Motor trades ............................ 1114 0 1114 161 1272 Building trades ......1642. 1U 42 4 16e" 257 1903 Prlin tradn t .r.a. d..,........ 72 48 115 * 116 Furniture trades . ..................71 ...... * 71 62 133 Food trades ........................ a I . 1 6 67 Dlesond cutting, Jeweller'o trades . ...... 1i * 26 1 27 Hairdressing and miseeiloneous trade . 121 74 197 * 197 Total section 5 . ...................... 4001 1S0 594 679 50916 Summary: Total employm,n . ....................... 156224 Total shortae O .......... .......... **. 0750 Expected change ever 1 yeor ......1.6 Source: Manpower Survey: 1904, Directorate: Deovlopment Co-ordination, Department ------ of Governmnt Affairs. OS63 a Oparters nd semiskilled workers PAM a Proces ing and manufacturing n.-.c. a not l,eoh r. classified - 266 - Tablo VIUI S: NAMISZIA - EMPLOYEES AN SALARIES IN Th MINING INDUSTRY*, 190-89 Tot I Total Avre-ge Y"r employees solary P.A.R. salary P.A.R. (In thousonds) 196 19.0 10,941.4 6,60 1991 19.2 122,Ws.5 6,416 1992 17.* 152,157.9 7,4U6 1983 16.9 141,299. ,378 1984 16.6 189,441.0 8,925 1986 14.9 162,8265. 10,276 1986 16.0 166,442.0 1987 18.0 104,089.0 1l,887 188 15.8 241,66J)6 17,542 1909 18.9 264,03S.a 19,061 Source: Dopertent af Economic Affairs. *Cash only: fringe benofite oxcluded. - 267 - Table VIII04: NAMIBIA - EMPLOYUENT AND NUMBER OF MANUFACTURING INDUSTRIES SY TYPE OF INDUSTRY, Ing Itndustrie Employment Total . .... .................. 269 9176 Food, beverages and tobacco 76 4687 Textil-, wearing apparel and leather 21 389 Wood, wood producto and furniture 42 669 Paper products, printing and publishing l3 464 Chemical product. 11 329 Non-oetal mineral producte 19 1094 Metal product ..3 1130 Other . 20 131 Repair servie 5 26 293 e------------------- …-------------------------------------------------___ ----__ ------------------ Source: SWA/NaMibian Department of Economic Affaire, 1919. *Unpublished 1960 Industrial Censuu.' Windhoek. *Repair servicee included althcugh not classified as manufacturing In order to provide a comprehensive view of Industries. IBRD 22898 ANGOLA ZAMBIA 2iA)KaNFL'CUW C-,-. SHQA. - - ! o , ' - I N-\ '- . N h ')r'b w E \ 1 }HOR'xs¾ . / BIOJ7/-TSWAN \j:A NIivt / uo,I.AkO4 9,nb KHOR'XA; , , . . 4, . ~~~~~~~~~~~~~BOT5W/ANA I , IOIDIU/. : . 3 ! ATL/&0½ - ¢- | | .>-H--.OLhANNAMIBIA ADMINISTRATION AND Sw-kopmund- TRANSPORTATION WoMsRahoy1 3 X S - °t :- - ; KoI MA.JCJOR ROADS .-, s ,. gNuO805h , SSECONDARr ROAUS IL RA)RRDs.5,LN>\R41P.DS f, > ,,' , . - -:*4 ... .. - SAIRsTELE ILIAGE S NopBib i f > < . . 4~~~ -, Oeer- CITIES, F NIA[ - ®~~~~~~~~~~~~~~~~~~~ MAGLSrlARiAt DiSIRKI CAPJIA[S x MALTAHOHE . NAU!:3NAL CAPflAL A, ~~~~~~~~~~~~~~~~~~~~- MAiSTERiAC DSTRiCT ROUJt-DARiRS INTERNATIONAL ROJNDARIRS / ~~~~~~SOUTH AFRICA ---N 1 N I - ' ^ 2TMAtSHOOP a f '~~~~~~~~~~~~~~~~NQC' l