Namibia’s Equality Allergy

There's a need to do away with the redline and an urgency to promote domestic growth, while avoiding economic and political instability caused by national pressing issues such as this. Below is some of the economic impacts of the redline hardly mentioned in our daily conversations. Firstly, the redline, which is there to stop the spread of foot-and-mouth disease, also determines your marriage regime. Secondly, it determines whether your agricultural produce would sell commercially or not. As a result, the north of the redline will keep depending on the south of the redline when it comes to food production.For instance, hostels, hospitals and prisons in the north are only allowed to consume food produced on the commercial side of the redline, which are graded higher than that produced north of the mesh wire. Quantify this annual consumption and you will be shocked about the hundreds of millions that goes into procuring these goods from the commercial side, year in and year out – especially by the government – to feed the north. This is easily in excess of N$100 million per year. If this was directly spent in the north, it would have stimulated the north's production capacity. Unfortunately, as a farmer north of the redline, if you want the government to buy your meat, cabbages, tomatoes and other agricultural products for consumption at government-run facilities in the north, you would have to relocate to and produce at Oushimba, the commercial side of the redline. This is the only way the government can procure from you and then export to north of the fence.On 23 May 2019 minister Calle Schlettwein attempted to reverse this through a ministerial directive ordering government departments to start procuring agricultural products from producers north of the redline. This announcement was a public acceptance of the negative economic impact of the redline by the then finance minister. This has, however, fallen on half-deaf ears, and, well, he also most probably didn't follow up to confirm adherence and implementation. Thirdly, for a young person, the redline determines your fate in many ways. It determines whether you will have access to quality education and be financially sound. In a way, the redline determines your future economic class too. The post-colonial regime, in a predictable attempt to stimulate investment and growth in the beef industry, ignored these devastating effects the redline has on other economic sectors, regions and inhabitants at large. Unfortunately, we continue to ignore the major impacts of the redline on the livelihood of people in the north other than just preventing foot-and-mouth disease. The redline introduces and continues to deepen inequality and unfair access to wealth and income. We clearly are either up to this point not fully able to comprehend the lessons learnt from adopting and maintaining political/historic laws such as this, or we are deliberately ignoring the plight and ongoing economic stagnation in the affected regions.The effects of poverty are well researched and well documented. For example, children from poor families do not perform as well at school as those from affluent families, due to various factors related to poverty, such as a lack of food, a lack of access to electricity, and limited access to better schools.Similarly, globally, poor people are on average not as healthy as rich people.Unfortunately in the Namibian context, the above is even more evident.We are trying to demonstrate the real impact of the redline, highlighting a few untold, unintended consequences of this historic fence: Let's take the scenario of two families living at Oshivelo. Household number one is that of Mr Thomas. They are living on the communal side of the fence, and household number two is that of Mr Heinrich. They are living on the commercial side of the redline. Both families own 100ha of land and 30 head of cattle. Both are engaged in horticulture. They share the same school at Oshivelo, the same church, the same playground, same cuca shops, and same culture. The two families are separated by the 3mm-wide fence only – the redline.Let's assume the daughter of Mr Heinrich is sick and needs a heart transplant.A private hospital in Windhoek requires an upfront payment of N$100 000 before the operation.To raise this amount, Mr Heinrich easily sells his 10 cows to Meatco, and a few tonnes of vegetables from their garden to grocery stores. Within 10 days, he is able to raise around N$150 000. His son is about to embark on his tertiary education at the University of Cape Town (UCT) in South Africa. The son's tuition fees are over N$100 000 per year. Because Mr Heinrich just paid for his daughter's medical treatment, he decides to sell 10ha of his 100ha plot to a private investor. Within a short period, he receives five offers and sells the land to the highest bidder for N$2 million. Through this, he raises enough money to send his son to UCT for the next four years and still manages to invest part of the amount in restocking his livestock.This was made possible by the Commercial Land Act which allows for title deeds. This means the two pieces of land separated by a 3mm-wide fence have different values.Let's assume Mr Thomas is in the same situation with his daughter and son. Mr Thomas, being on the wrong side of the fence, approximately 3mm away from Mr Heinrich, cannot sell his cows to Meatco to raise the much-needed cash to send his daughter to a private hospital in Windhoek.The only market available to him is the informal meat market in the north, which cannot absorb his produce as fast as he needs it to. But his daughter needs urgent medical attention.So she ends up at the Oshakati Intermediate Hospital with little access to better healthcare.Mr Thomas can also not sell his fresh produce to local grocery stores at a good market value. Worst of all, he cannot sell part of his plot for anything more than N$600 because of the Communal Land Act which doesn't allow for title deeds north of the redline. Land occupants are not able to sell a piece of their land for anything more than that N$600. The land belongs to the state unless you are within the town's borders. Clearly, this divide creates barriers to effectively and efficiently execute economic activities, thereby introducing market inefficiencies, and diminishing or discouraging investment in production capacity in some places. As a result, Mr Thomas' daughter suffers serious health issues. She eventually succumbs to respiratory failure, and his highly intelligent son cannot get a well-deserved education at UCT. In fact, he ends up going to a local vocational training centre and is now a mechanic at some garage at Okatana on the communal side of the redline. His productive capacity, and therefore the productive capacity of the economy, is diminished.However, Mr Heinrich's son is now a lead engineer at the local mine with a good remuneration package.His family's net worth is roughly N$10 million, and that of Mr Thomas is a mere N$500 000. Shocking, right? Remember their asset bases were the same.Sadly, because of the mesh wire fence, the two families embarked on two completely different economic paths.As time passes, the effect of the redline determines the future value of the wealth of the two families, and the gap between them grows exponentially with time.This will continue for generations for as long as the redline exists and for as long as its reasons for existing remain ambiguous.The kids from the two families, despite growing up together and having received the same primary and secondary education, and being equally smart, will now lead different economic lifestyles because of this fence. The fence, which arguably only exists to prevent the spread of foot-and-mouth disease, as we often hear from our seniors like the honourable tate Calle, also determines your future economic class.We clearly have two economies – the communal economy and the commercial economy – in Namibia as long as the redline exists.Especially if it continues to exist for reasons other than preventing foot-and-mouth disease. We need to collectively address the redline subject as an ineffective policy that targets particular places for economic development in one specific sector, and disregards other places and sectors. Doing nothing about it will lead to the rest of the country paying a high economic price for growing inequality, and to declining opportunities in the long run. And if we are not careful to understand the relationship between inequality and economic performance, we risk pursuing policies that will worsen both.The removal of the redline would not only offer an equal opportunity to farmers to market their products, but would also lead to healthy competition, which ultimately benefits consumers.Trade between the south and the north would also be boosted.If the government has no intention to remove the redline, perhaps it should consider reviewing or restricting the existence of the redline to foot-and-mouth disease prevention only.Otherwise this calls for a strategic and evidence-based motivation response from the government, articulating the significance of the redline from a true cost-benefit analysis approach. * Immanuel Kadhila is the head of treasury at the Government Institutions Pension Fund. Natalia Shilongo holds an honours degree in economics from the University of Namibia.