Prohibitive costs fanning inequality

…5% access private legal service, 14% private medical aid

By Hilary Mare
THE prohibitively high cost of products and services offering in the financial services sector constrain progress on reducing inequalities in the Namibian soci­ety, Finance Minister, Calle Schlettwein has said.
Bemoaning the high costs particularly in the insurance products, the Minister high­lighted that these have created a highly con­centrated and lucrative enclave, alongside a sea of under-coverage.
“As such, private legal services are only accessible to about five percent of the pop­ulation, while only an estimated 14 percent of the population enjoy private medical aid. Affordability has, therefore, remained a binding constraint to broad-based access to financial products and services for the low-income pyramid and thus a binding constraint to rapid poverty eradication and the erosion of inequalities,” he said.
He further stated that government is de­termined to redress this situation in its quest to provide for national objectives.
“As government, we recognize the need for effective public-private dialogue and part­nerships, not only to create a conducive environment for business to operate and flourish, but to additionally ensure that the resultant outcomes serve both your targets of being profitable and viable and the national objectives of job and wealth cre­ation and that such wealth is equitably dis­tributed,” he added.
He further stated that financial stability and soundness are key hallmarks of our fi­nancial sector and compare favourably with the rest of the World adding that to these two pillars shall be added the inclusiveness dimension, which is key for financial stabili­ty and wealth creation.
“The 2017 Global Com­petitiveness Report ranks financial mar­ket development in Namibia at 50th po­sition and the qual­ity of infrastructure at 67th position out of 182 economies as­sessed globally. This is an enviable competi­tiveness position from the global perspective and in the context of national competitive­ness rating which is now standing at the 90th position globally.
“The key developmental aspirations for Namibia are to realize high inclusive growth, eradication of poverty, creation of decent jobs and erosion of inequalities. We have been able to bring about gradual reduction in poverty and inequalities through growth and targeted policies.
“The recently released Inclusive Develop­ment Index by the World Economic Forum places Namibia as the 5th most inclusive economies in the African region and 56th among Emerging Economies. In our pursuit of sustainable development, inclusivity is a key pillar as espoused in the Harambee Prosperity Plan, Vi­sion 2030 and the succes­sive National Devel­opment Plans,” he explained.
The last Fin­Scope Surveys carried out for Namibia by the Finmark Trust indicates that general access to financial products and services has improved over the years, with financial inclusion having expanded from 49 percent in 2007 to about 69 percent by 2011. However insurance cov­erage remains limited with only a relatively low percent of the population having access to some form of insurance.