“Considering the high unemployment rate in Namibia, the continuing global economic
meltdown which leads to layoffs and the general poverty situation in the country, SSC [Social
Security Commission] decided to explore the possibility of introducing an Unemployment
Insurance (“UI”) scheme to shield those falling into involuntary unemployment from a
sudden exposure to poverty. At the time of establishing SSC, the idea of establishing UI was
considered but postponed indefinitely as the size and structure of the workforce at that time
would render it unviable. Instead, the Development Fund was created and tasked with job
creation and skills development, targeting unemployed Namibians from socio-economically
disadvantaged backgrounds. SSC now believes the time is right to explore the viability of
introducing UI, based on the aforesaid reasons and changes in the country’s demographic
configurations. In addition to providing a buffer against poverty, it is envisioned that UI will
a) prevent workers from becoming unemployed, b) reintegrate the unemployed back into
the labour market without delay and c) stimulate labour demand by attending to supply
deficiencies, both in terms of quality and quantity.” Terms of Reference
This paper is the Draft Report setting out the initial findings and recommendations of the
consulting team. It is presented as a discussion paper in preparation for a workshop scheduled
for Windhoek on 6 July 2015 at which the intention is to gather views on the views set out in
this paper.
The paper proposes the establishment of an Unemployment Insurance (UI) Fund broadly along
the lines of the corresponding Fund in South Africa, but with benefits modified to comply with
the requirements of ILO Convention 102 of 1952 on Social Security (Minimum Standards) and
with explicit actions to address the problem of unemployment in Namibia.
After describing the background to the project and providing a short conceptual framework,
the Draft Report provides a discussion of the legal and policy framework and considers the
fiscal and economic implications of the recommended Fund. It then sketches out the actuarial
evaluation, penciling in an indication of the type of contribution level that may be required to
meet the benefits proposed. The next three sections look at unemployment prevention, the
expected characteristics of coverage of the UI Fund and the challenges of youth
unemployment in Namibia. The discussion closes with detailed consideration of the
administrative capacity and skills at the SSC.
The text that follows sets out the key components of the findings and recommendations of
this Draft Report on a section-by-section basis.