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Land Reform, Income Inequality and Poverty Alleviation

Wolfgang Werner1

Extract from the Bank of Namibia's 5th Annual Symposium Publication 2003

Posted with permission of Mihe Gaomab (Mihe.Gaomab@bon.com.na), Principal Economist, Bank of Namibia.
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Introduction

Sustainable and equitable improvement in the quality of life of all people in Namibia.

This is the vision of NDP 2, which maps out Namibia s development trajectory for the period 2001/2-2005/6. It argues that in the short- and medium term a multitude of income generation and safety net initiatives will be required from both the private and the public sector to sustain a new pattern of growth which will reduce poverty while accelerating economic growth (RoN 2002a: 50-51).

The primary concern in formulating this vision was undoubtedly the high level of poverty experienced in the country. It is estimated that between 50 percent and 67 percent of all households (depending on the measure used) are poor. 85 percent of consumption poor households are located in rural areas (RoN 2002a: 559). They make a living on just 55 percent of the national average income (N$ 17,198 in the mid- 1990s). The northern and north-eastern regions are considerably poorer than the central and southern regions. Annual household incomes in five of the former regions (Ohangwena, Caprivi, Omusati, Oshikoto and Okavango) was less than half of the national average (Hansohm et al 1999: 19). These are regions where access to land is obtained through customary tenure arrangements and where farmers practice cultivation together with animal husbandry. With the exception of Otjozondjupa region, average household incomes in regions where commercial farming is taking place are above the national average. These average figures conceal intra-regional income differentials, however. Urban areas such as Windhoek, for example, increase the regional average for Khomas Region considerably.

To compound high poverty levels, the distribution of income is highly skewed. Namibia has the unenviable reputation of displaying some of the highest income inequalities in the world. In the late 1990s its Gini-coefficient was 0.70 (Hansohm et al 1999: 17). Ten percent of households representing 5.3 percent of the population consume 44 percent of total private consumption, while 90 percent of households consume an estimated 56 percent. The richest 10 percent of the population receives 65 percent of income (Ibid.).

The pattern of poverty in Namibia mirrors the unequal distribution of land. At Independence in 1990 the new Namibian government inherited a highly skewed distribution of land. Approximately 36,2 million hectares representing 44 percent of the total land area or 52 percent of agriculturally utilisable land continue to be held under freehold title. This land is commonly referred to as the commercial farming sector. Under previous Apartheid policies, access to this land was reserved for white farmers, who owned that land under freehold title. The sub-sector is still dominated by white land owners (RoN 1991: 147).

By contrast, the non-freehold areas, formerly known as native reserves and referred to today as communal areas, comprise about 33,4 million hectares, representing 41 percent of total land area or 48 percent of agricultural land. However, these aggregate figures overstate the agriculturally usable land in communal areas, as large tracts of communal land are situated in semi-desert areas, with mean annual rainfall ranging between 50-100mm, or are rendered unusable for agricultural purposes due to the absence of exploitable ground water. If these factors are taken into consideration, the commercial farming sector (36 million ha.) comprises 57 percent of agriculturally usable land, and communal areas only 43 percent or 27 million ha (Ibid.). This underlines the fact that access to productive land and agricultural resources was structured along racial lines before Independence.

While land reform is widely regarded to play a major role in alleviating poverty in the country, policy statements in this regard remain ambiguous. The National Land Policy states that government policy will at all times seek to secure and promote the interests of the poor and ensure equity in access to land and in security of tenure (RoN 1998: 1). Cabinet, after a retreat at the end of the year 2000 was reported to have reiterated the importance of land in alleviating poverty by having stated that without achieving a breakthrough in the land reform programme, the fight against poverty would not succeed (New Era 22.12.2000-12.1.2001).

However, the importance of land in alleviating poverty does not enjoy similar prominence in some key documents on poverty alleviation. The Poverty Reduction Strategy for Namibia, which was approved by Cabinet in 1998, does not accord redistributive land reform a long-term role in poverty alleviation. It argues that the agricultural base is too weak to offer a sustainable basis for prosperity and foresees that in a quarter century from now, the large majority of the country s inhabitants are likely to have moved into urban centres (RoN 1998a: 3, 5). While the Poverty Reduction Strategy sees a significant potential in alleviating poverty through the development of the livestock sector, further opportunities for the development of cultivation in the freehold or commercial farming sector are regarded as limited. It argued that at best, land reform and an associated shift to intensive cultivation could yield a one-time gain for poverty reduction in those few areas that are well watered but presently farmed by extensive commercial methods (Ibid.: 10). These statements echo the conclusions drawn by a World Bank study on poverty reduction that preceded the Poverty Reduction Strategy (World Bank 1997: 12). Land reform does not feature in the National Poverty Reduction Action Programme 2001-2005 (RoN 2002d) which was tasked to concretise the Poverty Reduction Strategy.

The Second National Development Plan (NDP 2) also does not provide any more detail on how land reform will support a broad based rural development strategy aimed at reducing poverty. In a cross-sectoral chapter on poverty reduction (RoN 2002a: 558f), access to land as a strategy to reduce poverty is not discussed at all. The only reference in that particular chapter to land and poverty alleviation is found under the heading of targets and performance indicators for the agricultural sector, which simply states that land will be provided to poor landless families (Ibid.: 565).

Although poverty alleviation remains high on the land reform agenda, calls for land redistribution are driven by other concerns as well. Most important in this regard is the demand for greater equity in land ownership. Colonial land dispossession left indigenous communities with little more than 40 percent of agricultural land in 1990. With the exception of an estimated 15 percent of the land that is either desert or land proclaimed as nature reserves, the remainder was owned by white farmers. Land reform, and redistributive land reform in particular, is here to stay. In implementing a land reform programme, the National Land Policy commits government to secure and promote the interests of the poor and to ensure equity in access to land and security of land tenure (RoN 1998..: 1).

This paper will start by presenting a brief discussion of the current framework and government policies with regard to land reform and poverty alleviation. It will not only focus on redistributive land reform but will also look at tenure reform in the nonfreehold or communal areas. It will conclude by asking a few questions about land reform and suggest some improvements to the programme.


Footnote:
  1. Dr. Werner is an Independent Consultant in Windhoek, Namibia


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