1 Introduction

The Namibian economy has gone through several stages of discrimination between the white settlers and the black inhabitants. During Apartheid rule, for example, black Namibians lost political, economic, and social rights through a series of laws and regulations governing almost every aspect of their lives (Bauer, 2001). As a result, after gaining independence, the independent Government inherited an economy of highly skewed income distribution with resourceful minorities, while most of the country's population was in absolute poverty. Income inequality in Namibia was extreme, as was inequity in the access to primary economic resources, education, and healthcare. To correct the errors of the colonial leadership, the new Government put more stress on improving equality and quality of life for every Namibian. As a result, the Namibian economy has gone through some government policy interventions and reforms since the 1990s.

The Government of independent Namibia intervened in different sectors of the economy to ensure that all Namibian people enjoyed the same benefits irrespective of their race, colour, or tribe. Furthermore, reforms in other sectors of the economy were adopted to reduce the inter-racial differences in the country. These reforms aimed to achieve high and sustained economic growth, create employment opportunities for all Namibians, and reduce poverty and inequality among the Namibian people (National Planning Commission, 1995). Although interventions were made to address the mistakes of the past governments, not all were efficient. Challenges of unemployment, inequality, and poverty remained high even before the emergence of COVID-19 in the country.

The emergence of the COVID-19 pandemic threatened the already trailing government efforts to end poverty, inequality and unemployment as authorities have used ad-hoc policy measures during the pandemic, such as lockdowns and mass quarantines, to slow its transmission. However, the consequences of the widespread use of these unprecedented measures are not clearly understood. This chapter, therefore, aims to contribute to the understanding of the economic and social consequences of COVID-19. The chapter looked at the history of pandemics and Neoclassical economic theory, COVID-19 policy responses, and their social and economic consequences in Namibia.

2 Pandemics and Neoclassical Economic Theory

Diseases and illnesses have been troubling humanity since the earliest days. However, it was not until the marked shift to agrarian communities that the scale and spread of diseases increased significantly (Dobson and Carper, 1996). Trade between communities has increased interactions between humans and animals and facilitated the transmission of zoonotic pathogens that accelerate such epidemics (Piret and Boivin, 2021). The words epidemic and pandemic have been in existence in social and medical contexts since the seventeenth century (Morens et al., 2009). Epidemic, endemic, outbreak, and pandemic words are used to express how frequent and geographically the extent a disease is now compared to previously. These terms are not solely used to describe infections but also to describe non-infectious conditions such as cancer and hypertension (Grennan, 2019; Sampath et al., 2021). Although these terms are somehow not familiar in the neoclassical theories, neoclassical theoretical concepts are at the core of modern health economics (Hodgson, 2007).

In neoclassical economics, health is defined broadly to include longevity and illness-free days in a given year, and it is both demanded and produced by consumers (Grossman, 1972). The neoclassical theory sees human beings as individualistic beings who want to maximise their utility. Therefore, it logically follows that humans desire health because it generates utilities. According to the theory, utility is generated from health in two ways. First, ill-health is painful; hence, it is a source of disutility. Health goes into the individual utility function directly and positively influences welfare. Second, health is viewed as human capital. Good health means more sick-free days available for an individual. Thus, people can go to the market and produce income and leisure that generate utility on these sick-free days. Therefore, health is a consumer good and a human capital, an investment suitable for the household production function (Jiang, 2009). However, Eichenbaum et al. (2020) claim that the neoclassical model does not rationalize the positive comovement of consumption and investment observed in recessions associated with an epidemic and infectious diseases.

In the neoclassical models, age, income, healthcare, education, environmental, and lifestyle factors are classified as health determinants (Henderson, 2005). An individual begins with a stock of health, which depends on the individual's genetic factors. However, as an individual's age increases, the health stock depreciates. The depreciation rate depends on the rest of the determinants mentioned above (Santerre and Neun, 2007). Healthcare, for example, restores an individual health stock. The neoclassical theory defines health care as a composite of “myriad goods and services that maintain, improve, or restore a person's physical or mental well-being” (Santerre and Neun, P24). Hence, healthcare, like other commodities, is produced and distributed in the marketplace.

With both health and health care defined, we can now detect the relationship between healthcare and utility and the relationship between health/healthcare, investment and consumption, and eventually economic growth. An extensive microeconomic literature examines the effects of varying health determinants on health outcomes themselves, human capital attributes that are contingent on health outcomes, and economic growth. For example, Weil (2007) and Bloom et al. (2004) find that countries with better population health experience faster economic growth. Goenka et al. (2014) study the economic impact of infectious diseases by integrating epidemiological dynamics into a neoclassical growth model and establish that there are multiple steady states, and the local dynamics of the model are fully characterised. At the same time, the interaction of the disease and economic variables is non-linear and can be non-monotonic.

Studies about infectious diseases show that diseases negatively impact the labour force, productivity, and economic growth (Acemoglu and Johnson 2007; Weil, 2007; Ashraf et al., 2008; Agénor, 2015). Chou et al. (2004), Hai et al. (2004), and Siu and Wong (2004) showed that the 2003 SARS outbreak had a significant gross domestic product decline in the service and manufacturing sectors. Acemoglu and Johnson (2007) pointed out that affectation in low-income countries is higher than in high-income countries. Hence, countries with a high initial capital level after a high-impact shock will recover faster. Infectious diseases will directly increase the health costs of residents, hinder the accumulation of human capital, reduce labour time, and ultimately harm economic growth in the long term (Almond, 2006). Therefore, using the variable of labour supply as an intermediary can link the dynamic spread of infectious disease with the fluctuation of the macroeconomy (Goenka and Liu, 2012; Augier and Yaly, 2013). From this literature, we can expect that Namibia, a small economy with a history of commodity-led growth, will likely be hard hit by the COVID-19 pandemic.

3 Country Profile and State of the Nation Pre- COVID-19 Era

Namibia is a small open economy with rich mineral resources like diamonds, uranium, zinc, gold, copper, and natural gas, to mention a few. In 2009 the country was reclassified as an upper middle income by the United Nations Development Programme (UNDP). It is situated in the bottom South-West part of the African continent. Being under the control of South Africa as its 5th province for about 75 years from 1915 to 1990, the country has a very close economic linkage with the South African economy. Thus, the structure of Namibia's economy was highly characterised by the colonial legacy of South Africa until the late 1980s. Before South African control, Namibia was a German colony for over 30 years, and thus previously, it was referred to as Germany South-West Africa.

The country comprises of about 2.54 million people as per 2020 World Bank estimates. With over 842 thousand square kilometres in size, Namibia has the second-lowest population density of any sovereign country, after Mongolia (UN, 2009). Namibia is largely a desert, ranch-land with a long coastline on the South of Atlantic; it lies northwest of South Africa, bordering Angola to the North and Botswana to the east. The Caprivi Strip, which stretches off Namibia's northeast edge, extends the country's borders to connect Namibia to Zambia and later Zimbabwe. The country experiences dry to hot desert conditions with limited and erratic rainfall, making it the driest country in Sub-Saharan Africa (Shadbolt, 2012).

Namibia has been a member of the Southern African Customs Union (SACU) since 1990, which provides for free movement of goods between the members consisting of Botswana, Lesotho, Namibia, South Africa, and Eswatini. Duties are levied in a common external tariff on goods originating outside the Union, and no duties or quantitative restrictions apply to intra-SACU trade. SACU is responsible for collecting all the customs and duties and distributing them to all the member countries on a certain agreed formula. Customs revenue is pooled and shared in a negotiated revenue sharing formula.

Namibia introduced its own currency, the Namibian Dollar (N$), in 1993. But, the Namibian dollar was pegged on par (1:1) with the South African currency unit (Rand), which is also accepted as legal tender in Namibia. Namibia is also a member of the Common Monetary Area (CMA) with South Africa, Lesotho, and Eswatini, dating back to the pre-independence period (Sherbourne, 2016). While the CMA is not a full monetary union with a common central bank and common pool of reserves, the South African Rand is the de facto common currency and is legal tender throughout the CMA, and the central banks within the smaller CMA members essentially shadow the South African Reserve Bank interest rates (Nchake et al., 2018). Hence, monetary policies throughout the CMA are mostly influenced by the South African Reserve Bank.

Under a common monetary regime, Namibia has little freedom on monetary policy instruments. Thus, the burden of safeguarding macro-economic stability in Namibia falls mainly on fiscal policy, interventions, and structural reforms. Hence, fiscal policy and regulatory framework are crucial for the nation's growth and development. However, the country enjoys a slightly flexible monetary policy and has the autonomy to fix interest rates and repo rates. Nevertheless, interest rates in Namibia have mostly moved very closely in line with the South African rates and vice versa.

The Namibian economy has pursued free-market economic principles since 1990, when the country gained its independence, to promote commercial development, create jobs, and bring disadvantaged Namibians into the mainstream economy. The economy experienced an average annual growth of 4.4% between 1991 and 2015 (World Bank, 2020). However, it fell into recession in 2016 and has since struggled to recover, and COVID-19 has made it even worse. Namibia is one of a few countries in sub-Saharan Africa with state provision of cash transfers to needy population groups (Levine et al., 2009). However, in the face of the generous public spending on social programmes, extreme socio-economic conditions inherited from when the country was under apartheid persist. Despite the economy having achieved notable progress in reducing poverty, it is still widespread. Poverty eradicating policies are moving at a sluggish pace. Inequality has been high but falling, while unemployment keeps rising, particularly affecting women and youth. (Jauch, 2015; Chiripanhura, 2018). At the same time, housing and household food security has been a major challenge (Humavindu and Stage, 2013; The World Bank, 2017).

Housing, education, and healthcare were some of the priority areas of development identified by the Government at independence. Hence provisions are made on the Constitution to push for housing, education, and healthcare agendas. However, even in its most progressive interpretation, the Namibian Constitution does not have any provision for the right to health care for any person in Namibia. The right to housing is encompassed in the Namibian Constitution under Article 95, which calls for the promotion of the welfare of the people. Article 20 makes provision that all Namibian persons shall have the right to education—as a result, primary education is enforced in Namibia.

4 The Emergence of COVID-19 in Namibia

The COVID-19 pandemic in Namibia started with a hastily arranged press conference on a Saturday morning, 14 March 2020, with the Minister of Health and Social Services when two Romanian tourists tested positive for the virus on the previous day. This set the beginning of a regular series of briefings, first with the Minister of health, then the President, who later declared COVID-19 as a state of emergency, with effect from 17 March 2020, under Article 26(1) of the Namibian Constitution, recite together with Section 30(3) of the Disaster Risk Management Act, 2012 (Act No. 10 of 2012), and further introduced measures such as the closure of borders to non-residents and suspension of gatherings. The President proclaimed a state of emergency and later detailed a series/stages of lockdowns, starting with two regions and extending to the whole country. Stage one regulations cease economic activities in the country. Businesses, offices (excluding essential services/businesses; those that were only selling food and medical items as well as those that were providing other essential services), and schools were shut, national borders were closed, and consumption and sale of alcohol and tobacco products was prohibited. Wearing of masks in public places was enforced.

Responding to the declaration of the State of Emergency, the Government proclaimed regulations and measures to support the economy and Namibian individuals who were economically affected by COVID-19 and also provided support for impacted businesses. The Namibian Government and the Central Bank then announced the first phase of the Economic Stimulus measures to address urgent funding needs in the health sector, mitigate the impact of COVID-19 on the economy and support livelihoods at the household level. The “Economic Stimulus and Relief Package: Impact of COVID-19 on the Economy and Households” announced by the Ministry of Finance and “Policy and Regulatory Changes in Response to the Impact by COVID-19 on the Banking Industry” by the Bank of Namibia.

The measures announced by the Ministry of Finance were: wage subsidy for the hardest-hit sectors; accelerated repayment of overdue and undisputed VAT refunds. Other measures included accelerated payment of overdue and undisputed invoices for goods and services provided to Government; Non-agricultural small business loan scheme and agricultural business loan scheme. The Ministry also announced the tax-back loan scheme for non-mining corporates as well as relaxation of labour regulations; and granting of the policy relief to borrowers by Development Bank of Namibia (DBN1) and Agricultural Bank of Namibia (AgriBank2) in the form of a capital repayment moratorium where a holiday is allowed on the principal amount for a period ranging between six (6) months, but not exceeding two years (24 months) (Ministry of Finance, 2020a, b, c). The Central Bank announced measures such as Loan payment moratorium, Liquidity relief measures, Capital conservation buffer, and Concentration risk limit/single borrower limit. Also, the Central Bank cut the Repo rate by 250 basis points, with further cuts expected in August 2020 (Bank of Namibia, 2020a, b).

The measures announced by the Bank of Namibia to directly support individuals as well as small and medium-sized enterprises (SMEs) and corporations to manage the impact of the COVID-19 outbreak through the banking system were Loan payment moratorium.

There were no conditions attached to the measures and packages adopted to support economic activities and economically sustaining companies. All Namibian registered companies were allowed to apply for the reliefs and available packages for their operational activities. However, for some supports like the Tax-back loan scheme, companies were required to be in good standing with the tax authorities. While to apply for a wage subsidy, a company was required to be up to date with their previous social security contributions.

5 Post-COVID-19 Pandemic Era

5.1 Surveillances and Security

Namibia has been a multiparty democracy, with normative values enshrined in a liberal constitution that protects civil rights and liberties (BTI Report, 2018). The country has a number of laws on the statute books that enable or have a significant bearing on surveillance in some form or other, whether as part of evidence gathering in criminal matters or telecommunications interception for anti-terrorism purposes. These laws include: Criminal Procedure Act 51 of 1977, Protection of Information Act 84 of 1982, Police Act 19 of 1990, Namibia Central Intelligence Service Act 10 of 1997, Communications Act of 8 2009 and Prevention and Combating of Terrorist and Proliferation Activities Act of 2014 (Links, 2019). However, Namibia does not have adequate oversight mechanisms to enable legitimate, proportionate and necessary surveillance in the digital age (Mare, 2019).

The national police force of Namibia, the Namibian Police Force (NAMPOL), was established by the Namibian Constitution and enacted by an Act of Parliament. It replaced the South West African Police as the national police force of the country in 1990 when the country gained its independence. NAMPOL aims and functions are to preserve Namibian internal security; to ensure law and order; prevent, detect, and investigate crime; and protect life and property. To carry out its function effectively, NAMPOL is being assisted by municipality and city policing and community policing such as men and women network in the villages and townships as well as Neighborhood Watch and Working Groups. However, public access to municipality and city policing is skewed towards the city of Windhoek and larger towns such as Swakopmund and Walvis Bay. Hence there is inequality in such policing. For instance, Windhoek City Police indicated that the capital had installed high-resolution surveillance cameras across the city to fight crime (Links, 2019). High-resolution surveillance cameras can also be found in Swakopmund and Walvis Bay. At the same time, poor municipalities such as Rundu and Oshakati, for example, have none, and neither do they have municipality police units. The Constitution also established an Ombudsman whose mandate is to investigate complaints of violation of human rights, abuse of power and unfair or harsh treatment of an inhabitant of Namibia (Walters, 2010).

During the State of emergency's proclamation, surveillance, and security were intensified. Military personnel were deployed to help the police keep law and order during lockdowns. Due to the lockdown, crime rates, road accidents and rape decreased significantly (Brandt, 2020; Newaka, 2020). Hospitals reported fewer admissions due to alcohol-related violence but shot up in the first day the alcohol sales ban was lifted again (Newaka, 2020; Oliveira et al., 2020). Although the State of emergency is already a violation of some of the fundamental rights of the Namibian people, the office of the Ombudsman received reports of police mistreatment of COVID-19 detainees. Furthermore, the denial of visitation rights during the COVID-19 State of emergency was also brought to the Ombudsman. There were also two reports of Namibian Military members beating suspects. Additionally, images showing Namibian Police officers beating detained illegal immigrants were released online by local newspapers (US Embassy, 2020).

Section one of the Article 26, State of Emergency State of National Defence and Martial Law, of the Namibian Constitution grants permission the President to make regulations that have an effect on restricting some human rights where such restrictions are “reasonably justifiable” and “have the purpose of dealing with the situation which has given rise to the emergency”. Some of the regulations enacted by the President prohibited employers, for reasons related to COVID-19, from dismissing employees, terminating contracts of employment, forcing employees to take unpaid leave or annual leave, and reducing the remuneration of employees (Mutandwa, 2020).

Two organisations representing Namibian employers launched a High Court case against the President, the government and trade unions to suspend parts of the Labour Act number 11 of 2007 during Namibia's COVID-19 State of emergency declared unconstitutional (Menges, 2020a, b, May). In the proclamations, the President suspended some provisions of some laws—including the Labour Act number 11 of 2007. The proclamations stipulate that during the COVID-19 lockdown, employers may not dismiss any of their employees due to the impact of the COVID-19 pandemic on their businesses. Due to the pandemic, they also may not force employees to take unpaid or annual leave. And they may not reduce the wages/salaries of any employee for reasons related to COVID-19 (Menges, 2020a, b, May). The Court indeed found the COVID-19 dismissals ban unconstitutional (Menges, 2020a, b, June).

In respect of COVID-19 surveillance, Namibia adopted the first edition of the Regional Strategy for Integrated Diseases Surveillance and Response technical guidelines of 2002 in 2003 and started with systematic implementation about ten years ago. Technical guidelines have provided valuable guidance for surveillance, outbreak detection, investigation, response and reporting in Namibia. However, the country has been confronted with some challenges, including a shortage of human capital, high staff attrition rates of surveillance focal persons, while some health facilities are hard-to-reach (WHO, 2021). The country adopted the same techniques of integrated disease surveillance and responses for the COVID-19 pandemic—some of the quick responses were screening at all points of entry and making wearing masks mandatory. All Namibians returning from high-risk areas were to go under required quarantine for 14 days, and the Government covered all costs. All schools (public and private) were closed for a month, and large gatherings were prohibited.

Soon after the President declared a state of emergency which introduced measures such as the closure of all borders, suspension of gatherings and related economic resolutions, the Ministry of Health and Social Services established an emergency response team, operating 24/7. The team aimed to intensify the surveillance of COVID-19 in the country, especially at the borders of Namibia. A COVID-19 communication hotline was established on 15 March 2020 and is hosted by the Ministry of Health and the Centre for Disease Control of Namibia (CDC). The hotline serves to assist in answering general inquiries from the public by assisting persons seeking guidance from the Ministry on issues related to COVID-19 and/or reporting possible symptoms or cases of COVID-19.

With the establishment of an Emergency Response team, the Ministry strengthened the surveillance in monitoring the situation of COVID-19 in the country. The response team operates 24 h Monday to Sunday (Ministry of Health and Social Services, 2020). The Government further strengthened its communication to the public via various platforms, such as the COVID-19 communication centre operated by Namibia Broadcast Corporation and Ministry of Health and Social Services social media accounts, to mitigate fear and panic caused by misinformation, especially from social media (Ministry of Health and Social Services, 2020).

5.2 Social Safety Net and Financial Framework

Namibia has a variety of legislations that provide for social protection in the country. It has several social protection measures, including housing and living expenses allowances for vulnerable groups, means-tested cash transfers, food-for-work programmes, and free access to primary healthcare and basic education (Chiripanhura1 and Niño-Zarazúa, 2013). The need for social protection in the country arises from the realization that high inequality limits some households to opportunities in the economy (Chiripanhura1 and Niño-Zarazúa, 2013). According to the 2010 Income and Expenditure Survey, the Namibian social safety net includes the old age grant/pensions, child maintenance grant for orphan and vulnerable children under 19 years of age, disability grant to all the disabled adults under the age of 60, foster care, war veterans, and drought relief assistance.

The Old Age Pension, sometimes referred to as Basic Social Grant, is a universal and unconditional cash transfer to Namibians aged 60 years and above to prevent poverty among the beneficiaries and reduce inequality among Namibians. Old Age Pension in Namibia dates back to the pre-independence period, whereas, from 1973, all citizens of Namibia could be eligible to receive the social grant (Subbarao, 1998; Devereux, 2001; Levine et al., 2009). The main qualifying criteria have remained age (60 years and above) and citizenship—the beneficiary must be a citizen of Namibia, have permanent residence; and reside in Namibia. At independence, white Namibians’ social pension income was seven times higher than their black counterparts (Devereux, 2001). According to the colonial administration, it occupied the lowest echelons of the social hierarchy. The Government, however, opted to freeze the top level while adjusting the lower levels upwards. In 1994, all social pension income was equalised at N$120.

Although Namibia is one of the few African countries with a well structured social safety net, it is still faced with a number of social issues as the part of the population does not have access to some of the necessities. Hence, the battle against COVID-19 requires access to basic services and needs such as housing, sanitation, potable water, food, and other amenities that have remained neglected and has widened inequality in Namibia (Marenga and Amupanda, 2021).

The State of Emergency COVID-19 suspended the provisions of Section 9(2) of the State Finance Act, 1991 (Act No. 31 of 1991). The suspension empowers the Minister of finance to authorise the withdrawal of an amount of money exceeding 3% of the total amount appropriated by the current Appropriation Act for the period from 9 April 2020 to 30 June 2020 in order to defray expenditure on services of a special nature as contemplated in Section 9(1)(b)(ii) of the said Act (Centre for Human Right, 2020). Therefore, the Minister of Finance announced some social safety measures during the State of emergency in the form of access to free portable water in the informal settlements, providing food and shelter to the homelessness and relief package, in the form of grants, for the business entities and households. The Minister of finance announced the COVID-19 Economic Stimulus and Relief Package for the business and households directed at formal and informal businesses in sectors that are directly or indirectly affected by the lockdown measures and other external and internal demand supply-side shocks.

The relief package targeted all Namibians of 18 to 59 years of age who lost income due to the COVID-19 outbreak. It also targeted individuals who are unemployed, taking into consideration that the effects of COVID-19 and related public health protective measures weakened the means of support and subsistence income across the country. The grant excludes employed persons who have not experienced a reduction in wages and persons receiving any form of state social grants and Government support such as Disability Grant, Old Age Basic Income Grant, and Namibia Students Financial Assistance. Applicants for the grant were required to have a valid Namibian ID number.

Applications for emergency income grants were submitted through mobile phones by sending an SMS to a toll-free number and following a set of clear and simple instructions. Applicants did not necessarily need to use their own mobile phones, but they did need to provide a mobile number where they were comfortable to receive the token of the money. The Government said that the application process took “less than five minutes”. After the approval of the application, the applicant would receive a token from the Bank they selected in the application process. The token would be for one of the following e-money products offered by the respective banks: e-wallet, blue-wallets, or easy-wallets. The token could then be redeemed using the cardless services at that Bank's ATM or can be used to transact directly via the various value-added services provided by the various wallets. There was no need for an applicant to a bank account (Ministry of Finance, 2020b).

The Government also offered tax reliefs and wage subsidies to all Namibian registered businesses (Ministry of Finance, 2020b). According to the Ministry of Finance (2020a) the types of tax relief which were adopted are the following:

  1. i.

    Tax-back loan scheme for tax-paying non-mining corporates who are cashflow constraint: To provide reliefs to such businesses, they can borrow an amount equal to 1/12th of their tax payment in the previous tax year, to be repaid after one year. The interest rate will be concessional, below prime, on the back of the Government guarantee, capped at N$470.00 million. Applications will be made via commercial banks.

  2. ii.

    Tax-back loan scheme for tax-paying employees and self-employed individuals who have lost income or are experiencing difficulties due to COVID-19 outbreak, Those individuals can borrow an amount equal to 1/12th of their tax payment in the previous tax be repaid after one year. The interest rate will be concessional, below prime, on the back of a Government guarantee. The total guarantee is capped at the maximum of N$1.1 billion, based on the PAYE tax register and the potential loan size. In collaboration with the banking institutions, the Government may institute statutory and administrative measures to enhance compliance with loan conditions.

  3. iii.

    Acceleration the repayment of overdue and undisputed VAT refunds: The Government immediately speed up such repayments to enhance the cash flow of enterprises paying VAT. The total amount of the refunds to be settled within one week of the implementation of these measures stands about N$3.0 billion.

Some businesses and individuals could not honour their monthly insurances contributions because of COVID-19. Hence, The Namibia Financial Institutions Supervisory Authority (NAMFISA) requested that financial institutions in the insurance industry provide premium holiday relief with the possibility for extension in the event the State of Emergency is prolonged, whilst ensuring that clients are covered 100% during the period determined by the insurers (Namibia Financial Institutions Supervisory Authority, 2020). In the event that a claim occurs during or after the period, the outstanding premiums should be deducted from the claim amount.

NAMFISA further directed medical aid (insurance) funds to allow members to downgrade benefit options anytime during the State of Emergency. Members of medical aid schemes are usually are only permitted to change options at the beginning of the year. This enabled the affected members to downgrade to more affordable benefit options. The medical aid providers were also directed to not discontinue the benefits of members who are in sectors that are severely impacted, such as tourism and are not able to honour their monthly contribution and to provide ex-gratia allowance/benefits to all COVID-19-related claims where a member benefits relating to laboratory tests, consultations, and hospitalization or any other COVID-19-related treatment is or will be depleted (See NAMFISA, 2020).

The Monetary Policy Committee (MPC) of the Bank of Namibia cut the Repo rate by 250 basis points from 6.25% in February 2020 to 4.0% in June 2020 to mitigate the anticipated impact of COVID-19 and support domestic economic activity. The Bank of Namibia also introduced regulatory and policy relief measures to directly support individuals, small and medium-sized enterprises (SMEs), and corporations to manage the impact of the COVID-19 outbreak through the banking system. Regulatory and policy measures include loan payment moratorium: In respect of customers of banking institutions, banks can grant loan payment moratorium/payment holidays whereby the holiday in respect of loan payment (which include principal and interest) is allowed for a period ranging from six (6) months up to 24 months (two years) based on a thorough assessment of economic and financial difficulties experienced by individual borrowers. Banking institutions should apply such holidays in a transparent fair and equitable manner (Bank of Namibia, 2020a, b).

To assist banking institutions in instituting adequate support measures to individuals, small and medium-sized enterprises (SMEs) and corporations, the Bank of Namibia decided on the following regulatory and policy relief measures: (i) Liquidity relief measures, The Bank decided to relax the Determination on Liquidity Risk Management whereby banking institutions are required to ensure that their cash inflows match the cash outflows expected within the 0–7 days. The limit has been relaxed such that the expected outflows may exceed the inflows, but not more than the excess liquidity above their regulatory limit. (ii) Capital conservation buffer, The Bank reduced the capital conservation buffer rate to 0% for at least 24 months to support banking institutions to supply credit to the economy. The capital conservation buffer will enable banking institutions to use the capital they have built up during good times, to use during times of distress. The release of the buffer is to allow banking institutions to boost an already distressed economy by lending to the most vulnerable economic sectors. (iii) Concentration risk limit/single borrower limit, The Bank postponed the effective date of implementation of the 25% single borrower limit and concentration risk limit to allow banking institutions a wider scope to lend.

Bank of Namibia strongly requested that the local banks give payment holidays. Individuals and businesses affected by COVID-19 can apply for capital and interest deferment up to NAD 2.5 million from the local Banks. They can postpone payments for three to six months on loan facilities such as vehicle, asset and mortgage finance, and overdrafts—however, no regulation compiling the landlord to reduce or give their clients payment holiday.

Also, as a relief measure to assist start-up businesses, StartUp Namibia, in partnership with the Ministry of Industrialisation and Trade and with funding from the German Government, availed the COVID-19 StartUp Grant Fund amounting to 3 million Namibian dollars. The grant was meant to help small businesses that met the specified criteria to receive a direct supplement to pay wages and other fixed costs and offset the decline in revenue during and after the lockdown (German Embassy Windhoek, 2020a, b).

As a member of the CMA, Namibia measures/economic relief packages could only be funded through loans and savings. The Government used the funds from borrowing within the local market and savings from the Emergency Fund, while the rest of the funds were made available through budget shifting and saving techniques. The Government also received donations from local businesses and individuals and also from the international community such as the US and EU member countries. The Bank of Namibia is not participating in financial market trading. However, it has made a provision for the Government to draw an overdraft of not more than NAD 3 billion at a below-market interest rate (Bank of Namibia, 2019). The debt accumulated by the Government during the COVID-19 is being held in local currency.

5.3 Employment and Labour Market

Namibia has one of the most comprehensive social protection systems in Africa (Schade et al., 2019). Since independence, the Government has spent on average 13% of GDP on social protection, while over 5% of its GDP on average is spent on education alone (De and Shafuda, 2020). Despite massive spending on education, the Namibian Government has failed to solve the challenge of income inequality and unemployment. Employment performance has deteriorated since the 1980s. Before independence, unemployment can be attributed to the war of independence, which destroyed infrastructure and destabilized the economy (Sunde and Akanbi, 2016). Although there were mild declines in unemployment in the early 1990s, the rate has kept increasing ever since to reach a maximum of 37.6% in 2008, after which it started to decline (Sunde and Akanbi, 2016). In 2015, 28% of the labour force was unemployed and rose again to 33% in 2019 (De and Shafuda, 2020). Hence, COVID-19 has just added oil to an already burning flame.

Unlike South Africa, its neighbouring country, Namibia does not have an unemployment insurance fund which usually pays up to 60% of one's salary/wages for up to 9 months, provided that they were retrenched through no fault of their own (Nuyo, 2020). Instead, Namibia administers all its employees’ issues through its Social Security Commission, and wealthier employees opt for private unemployment insurance through private insurances. According to the Social Security Act 34 of 1994 read with the Employees Compensation Act of 30 of 1941, the Social Security Commission of Namibia is responsible for administering a national pension fund, employee's compensation fund, maternity leave, and a sick and death benefit fund (Social Security Commission, 2020). Therefore, the stimulus package announced by the Minister of finance was administered through the SSC to assist the most severely affected employees.

In anticipation of employees losing their job due to COVID-19, The Labour Act provisions were suspended in proclamations issued by President Hage Geingob. The proclamations stipulated that during Namibia's COVID-19 lockdown period, which started on 28 March, employers may not dismiss any of their employees, reduce their pay or force them to take leave because of the impact COVID-19 pandemic has on the employers’ business (Menges, 2020a, b). However, The High Court's judgement, in the matter of …, found the proclamation unconstitutional. The Judgement upholds the principle of legality and thereby the rule of law by requesting the President to follow constitutional and legal procedures in responding to COVID-19. The Court's assertion that restrictions of rights in terms of emergencies must be interpreted strictly and narrowly also sends a strong message to the executive to be cautious of overreaching in the name COVID-19 response measures.

The Government, therefore, had to rely only on the economic stimulus package to mitigate the loss of jobs. Thus, The Ministry of Finance availed N$400 million. At the same time, the Social Security Commission contributed N$253 million to provide employers and employees relief programmes to ensure that the employment sector is not too hard hit by the Covid-19 pandemic (Deloite, 2020). Namibia has a Salary Protection and National Employment Scheme for Covid-19 designed in Section 37 of the Social Security Act No. 34 of 1994. This scheme's primary purpose is to persuade employers to retrench their staff and support employees who have lost their employment due to the Covid-19 pandemic. This scheme offers employers an Employer Wage Subsidy Program and offers employees an Affected Employees Program.

The Employer Wage Subsidy Program is accessible to employers in critical industries such as tourism, hospitality, construction, and aviation. Employers can apply to the SSC for a wage subsidy to remunerate their employees through the Employer Wage Subsidy Program. Other employers in the services and entertainment sectors, retailers (non-food), domestic and garden workers, farming, manufacturing, and transport would be contacted directly by the SSC to apply for wage subsidies. However, it has a condition that the employer agrees not to retrench their staff for at least three months, not reduce their staff salaries by more than 50% and should be a good standing member of the SSC. Furthermore, in certain instances, sectors not mentioned above can also apply to the SCC for wage subsidies provided they are paid up members of the SSC and must prove that their incomes were affected by the COVID-19 pandemic.

Namibia does not regularly produce employment or unemployment statistics, and a Namibian Labour Force Survey is conducted every two years, with the last one taking place in 2018. However, at the official inauguration of the Labour Commissioner's new offices, Labour Minister Utoni Nujoma revealed that 8881 employees had been dismissed by the two quarters between April and September 2020. Data released later by the Ministry showed that 12,198 people were retrenched by 896 employers between 1 January to 15 December 2020. According to released data, 8803 Namibians had lost their jobs due to economic reasons, while 2842 had been retrenched due to COVID-19-related reasons IPPR (2020), where most jobs lost due to COVID-19 are in the tourism and hospitality industry.

5.4 Education and Healthcare

The colonial Government was not interested in developing and extending economic benefits to the natives, as is evident in the rest of Africa (Rodney, 1972). According to Jauch, Edwards, and Cupido (2009), the German and South African colonial administrations are the root cause of social and economic distresses that broadened the inequality gap in post-independent Namibia. However, since the arrival of independence, no significant achievement has been made in narrowing this gap, as most Namibians remain destitute. Several policies and legislative interventions put in place to narrow the inequality ratios had very little success has been recorded, owing to blatant implementation gaps (Sepúlveda, 2012; Marenga and Amupanda, 2021).

At the time of independence, Namibia inherited an education and healthcare system characterised by major disparities in opportunities and facilities among different sections of the Namibian community. The provision of healthcare, education, and training was skewed in racial and regional terms and was largely a privilege of the few (Wallace and Kinahan, 2011). The Government of independent Namibia vide new macroeconomic policies, gave more stress on education, healthcare, and other social security measures to attain faster economic growth and reduce inequality (Sherbourne, 2016). Expenditures on human resource development (on education, healthcare and social welfare, and protection schemes) have been expanded. Conversely, new taxes and tax rates were introduced to enhance the expenditure capability.

Educational reform particularly basic education became one of Namibia's top priorities after independence. In 1990, Namibia's Education Ministry set itself five goals: (1) Improved and equitable access to education, (2) Improved quality in the education system, (3) Enhancement of democratic participation in the education system, (4) Improved efficiency in the education system, and (5) Promotion of life-long learning (Zaaruka et al., 2001). To achieve these goals, the allocation to the Ministry of education was increased from 18.3% of total expenditure between 1985 and 1989 to an average of 23.5% in 1990 through 1994. This is quite a sizeable amount compared to that of most low middle-income countries that only spend 12.8% of their national budgets on an average on education, according to the World Development Report (1993). In recent years, about 26% of total Government expenditure is incurred on education (De and Shafuda, 2020). However, despite these massive budgetary injections into the sector and growth of literacy rate, enrolment at tertiary education (higher level of education) is quite poor.

According to Article 20 of the Constitution and Education Act 16 of 2001 of Namibia, primary education is compulsory for all Namibian children, and it is provided free of charge in all government schools. However, there is a vibrant private sector presence at pre-primary, primary, secondary, and tertiary levels of education where education is not free (Chiripanhura and Niño-Zarazúa, 2013). The Act further states that children shall not be allowed to leave school until they have completed their primary education or have attained the age of 16 years (Article 20, Section 3) (Legal Assistant Centre, 1998). Although not compulsory like primary education, secondary education is also provided free in all government schools. However, parents were expected to contribute to the school development fund (SDF) and pay the other private costs of education like purchasing study material (Ministry of Education, 2011). However, in 2013 contribution to SDF and other private costs in all government schools at the primary level was scraped, and that was extended further to the secondary level in 2015, rendering basic education in Namibia totally free (Shafuda, 2020).

The proclamation of the State of Emergency required that all schools, early development childhood centres, and tertiary institutions be closed and attendance prohibited. Schools were to reopen in a phased manner necessitating the grades with higher priorities and workload to open first. However, due to lack of infrastructure, the reopening of schools was delayed at most government schools. Infrastructures at these schools were not adequate to accommodate COVID-19 regulations. Hence, schools were forced to shift to online teaching mode. Although the Namibian Government acknowledged the significant role that information and communications technology, or technologies (ICT) can play as the country moves towards a knowledge-based society aspired to in Vision 2030 and its development plans, COVID-19 has exposed the Namibian basic education system's preparedness to embrace ICT. Some schools in the villages do not even have electricity, while some do not have network coverage and internet connectivity. Hence teachers had to come up with innovative ways to ensure that the education has reached their pupils. For example, teachers in some remote villages developed study manuals that they distribute to students on a weekly basis. Teachers used text messaging services (short message services [SMS]) to contact the learners’ parents to inform them to pick up the study manuals.

However, the Government also tried to meet the teachers halfway to make things easier. The Ministry of Education, Arts and Culture (MoEAC) ended the second term early and introduced a winter break, the MoEAC, parents, and children closely monitoring the daily case counts (CDC Namibia, 2021). The face-to-face classes for 11 and 12 students of grades resumed on 03 June 2020, while primary and pre-primary schools in Namibia reopened under strict health guidelines 07 July 2020, after COVID-19 shutdowns, students must comply with safety and hygiene measures by wearing masks and conducting social distancing. Further, the Ministry allocated 29.8 million Namibian dollars towards purchasing COVID-19 protective equipment.

Tertiary education remained online. However, students reported experiencing challenges when attempting to access the e-learning platform (Kaisara and Bwalya, 2021) due to the unusually high volume of user traffic on the e-learning platform. Furthermore, internet network coverage is poor in most areas in Namibia (Taruvinga et al., 2020) which could have contributed to accessibility challenges. Also, the challenges of data costs impeded students’ ability to access the university e-learning platform. Costs have been identified as a major factor impeding successful e-learning implementation in developing countries (Kibuku et al., 2020), including in Namibia (Ilonga et al., 2020).

Independent Namibia did not just attach importance to education but also to health services. Before gaining independence from South Africa in 1990, Namibia's healthcare system reflected a traditional medical model, which focused mainly on hospital-based and curative services (Christians, 2020). Health services were generally poor, and also, inequity in access to health services was high. The Ministry of Health and Social Services is the custodian and provider of public health services in Namibia. It operates a four-tiered health system, consisting of primary healthcare sites, district hospitals, intermediate hospitals, and a referral hospital.

The current health services model in Namibia are twofold: private health services, mostly serving 18% of the population with medical insurance, and public health services, serving the remaining 82%. This, in part, is due to the country's income inequality. Furthermore, 24% of the Namibian population lives outside a 10 km radius of a healthcare facility. On average, there are about 5780 people per PHC clinic and 58,825 people per district hospital in rural areas, as per 2017 statistics. Hospitals, however, suffer from overcrowding and long wait times, as a large number of people bypass clinics and health centres closer to home and go directly to hospitals that are perceived to offer a higher quality of care (Namibia Ministry of Health and Social Services, 2017).

The budget allocated to the Ministry of Health has been relatively large since independence. Healthcare service is one of Namibia's most prioritized human development and social welfare measures. After education, safety and security, the Government attached the third most important priority to healthcare services in its domain of activities. Healthcare accounted for 10.5% of total government expenditure at independence (1990–1995) and increased to 13.4% during 2015–2016. Although the Government gave health the third most important priority of its activities, the mortality rate increased significantly between 1995 and 2004, and the life expectancy decreased sharply during the same period due to the emergence of the HIV pandemic other communicable diseases, including Malaria during the 1990s. (De and Shafuda, 2020). Also, the newly independent country suffered from a lack of expertise in different areas from the 1990s till early 2000. Hence, the healthcare sector also suffered from a sudden deficiency of medical experts. The first medical school in independent Namibia was established in 2011. Thus, it was not until 2016 that Namibia began to enjoy the services of its first locally trained medical expertise.

Primary healthcare is subsidised to ensure that many households have access to medical care. Yet, some households face challenges raising the required user fees, even though they may be relatively small. In both the education and health sectors, there are complaints from households about the declining quality of services in the public health and education sectors resulting in those that can afford to go to the private sector preferring to do so. This creates two tiers in both the education and health sectors, with the state sector being the poorer sector. The discrepancies translate into labour market outcomes which perpetuate rather than eliminate inequality.

5.5 Housing and Homelessness

Neo-classical propose a withdrawal of the State from the market based on the idea that markets would achieve a balance through their own doing (Harvey, 2007). In the realm of housing, policies based on capital subsidies primarily aimed at benefiting the private sector were developed for the developing countries with American influence and support (Gilbert, 2002). The aim was mainly to secure public support despite the general neoliberal turn that economic thinking was making at the time. The World Bank report titled “Housing: Enabling Markets to Grow” marked a key turn in this sequence (World Bank, 1993). The report laid out commercial-based approaches to housing and assigned the State the clear role of “enabler”. Both neoliberalism and its associated housing policies were later exported to various parts of the world (Brenner et al., 2010), including South Africa in the 1990s (Gilbert, 2000). In the 1990s, Mabogunje (1990, 1994) observed how each approach to housing represented a downgrading of the State's role relative to the former period until the present when this is limited to simply providing and managing infrastructure in Sub-Saharan Africa. While debates on ‘neoliberalism” abound, the term is here only raised as a way to frame the transition of the role of the State, particularly in the delivery of social services, including housing (Delgado, 2019).

The colonial discrimination on the provision of goods and services and development between rural and urban areas created significant urban housing challenges in independent Namibia (Marenga and Amupanda, 2021). There is an alarmingly high number of informal dwellings due largely to people relocating to towns and cities from rural areas in search of better services and jobs. According to Lennon (2018), 20% of the population lives in the slums in Namibia. By 2016, the rate of shacks to brick houses rose to 4:1 in Namibia. The informal settlements that have arisen out of people's need for housing contributed to a lack of potable water, electricity, or toilet facilities. This lack of resources increases the population's susceptibility to diseases such as cholera, polio, and Hepatitis E diseases. In addition, shack fires are common occurrences, often resulting in loss of life. Homeless people in Namibia usually take refuge in unused city buildings, on park benches, abandoned houses, and under bridges.

In the age of COVID-19 State of emergency, the Government has rounded up hundreds of Namibia's homeless people (Herestofa, 2021). Additionally, the Government provides tent shelters for homeless people and encourages them to seclude themselves to prevent the spread of the virus. Moreover, concerns over sanitation have arisen, especially as certain members of the population have tuberculosis (TB). Food is provided by churches, but it is not enough. The beds are reportedly too close together to comply with social distancing (Borgen Project, 2020).

6 Conclusion

The Namibia economy has been in an economic downturn since 2016. The COVID-19 pandemic has amplified the challenges of an already struggling economic environment. The declaration of COVID-19 as a state of emergency and the series of lockdown proclamations by the President of Namibia affected the economy badly and pushed it further to the bitter end of the stick. Sectors such as hospitality, aviation, healthcare, education, tourism, and hotel and accommodation were amongst those most severely affected (Harambee Prosperity Plan, 2020). The COVID-19 State of emergency declaration resulted in significant financial distress for business entities of all shapes and sizes. While some signs have already manifested through the liquidations of various private and public entities, it is expected that the worse is still to come.

The Government and the Central Bank announced several policies and regulatory changes to stimulate the economy and address funding needs in the health and education sector, to mitigate the impact of COVID-19 on the economy, and support livelihoods at the household level, poverty and inequality are expected to widen. State of emergency policies and regulatory framework benefited many low-class individual members of society. However, these policies failed to help the individuals who fall in the low- middle-class member of society—leaving them to lose their jobs, while self-employed people have to close their businesses. The COVID-19 policies and regulations also failed to sustain medium and big enterprises, especially those in the most affected sectors, like the hospitality and transport sectors. Some businesses have closed down, some have retrenched more than half of their employee base, while some are still on the verge of filing for bankruptcy.

COVID-19 will not only impact unemployment, poverty, and inequality but it is also expected to put relentless upward pressure on government expenditure. Namibia's legislation and regulations pertaining to businesses in financial distress can play a vital role in reducing the economic scarring expected during these hard times. However, it is a bumpy and gloomy road to economic recovery. There is a need for radical measures if the country is to get to its glory days in the next few years. The economy needs a financial booster to improve education and healthcare infrastructures and create employment.

Nonetheless, with the currency pack and the CMA agreement, Namibia can not run its monetary policy independently. Hence, the country mainly relays on fiscal policies to push for economic recovery. However, the Namibian Government does not have fiscal space, meaning it is not in a position to spend. The Government has no money, while the debt to GDP is already high, making it difficult to borrow. Bringing about sustained and inclusive growth amid fiscal consolidation is the Government's huge challenge. The austerity measures adopted since 2016 failed to deliver the expected outcome. Nevertheless, if the Government does not respond, efforts made to reduce poverty and inequality over 29 years before COVID-19 will be undone due rise in unemployment and financial distress caused by COVID-19. Therefore, the Government should consider other recovery measures while getting rid of austerity.

The potential of the green hydrogen project and the recent oil discovery at the country’s southern onshore deliver some hope for the economy. However, these long-term projects can take some time to deliver the expected results. The economy needs urgent solutions to push the economic recovery in the short term. Hence, improving resource mobilisation and eliminating inefficiencies in the public sector to increase productivity is one of the short-term solutions. Furthermore, the economy needs to attract foreign direct investment, especially in the agricultural and tourism sectors, which employ many people. There is also an urgent need to reform the state-owned enterprises to minimise their dependence on government revenue. Instead, SOEs should generate revenue for the Government rather than look up to government bailouts. Reforms should also be carried out to other government urgencies such as municipalities, town councils’ and village councils. Government urgencies should avoid being an obstacle to the growth processes. Domestic demand mechanisms such as increasing production and export are also recommended. Increase investments in infrastructure development to boost employment. Also, there is a need to increase investments in ICT and digital infrastructure to reduce costs.

Notes

  1. 1.

    DBN is a government-owned development bank in Namibia with the mandate to promote and finance development activities in those sectors of the economy which support development and the welfare of the citizens of the country.

  2. 2.

    Agribank is a government-Owned Enterprise with the mandate to promote the growth and development of agricultural sector in Namibia through affordable and innovative financing.