Educating the poor is the road to prosperity
By Cor Beuke, President of the Namibian Employers Association
As stated at its Annual General Meeting, the Namibian Employers Association has identified a solution to the headache caused by the New Equitable Economic Empowerment Framework (NEEEF) in its current format.
Although the purpose of NEEEF is to empower and uplift previous disadvantaged Namibians, in its current format such empowerment will not take place at grass roots level, and when considering the purpose of Harambee which is focused on poverty reduction, then it is time for the powers that be to sit up and take notice.
According to the World Bank, education is one of the most important tools of empowerment. Each additional year that a child remains in school increases his or her eventual wage by between 10% and 30%. By increasing the primary education enrollment of girls, the infant mortality rate decreases.
Investing in out-of-school children can increase Gross Domestic Product by up to 7% in poor countries. Providing remedial education to the out-of-school children of past generations can further increase these gains.
The fact of the matter is that by increasing the average education level of the poorer part of the Namibian society will result in an increase in the earning capacity of those individuals which will in turn increase the welfare of entire social groups.
This has a multiplier effect which is known as a phenomenon whereby a given change in a particular input, such as spending on education, causes a larger change in an output, such as gross domestic product. This results in Harambee’s goals being realised and can be seen as true empowerment.
The NEA is suggesting that the ownership pillar remains but that it is not compulsory.
As an alternative to the ownership pillar, an additional pillar needs to be created which focuses on spending on primary education.
If a company wants to sell some of its shares then it is still welcome to do so. If they do not want to do so then they need to contribute a certain percentage of their annual profits to basic education.
Private industry does not have a problem spending money on this as the multiplier effect has a positive result on their profits at the end of the day as well. More disposable income means more money to purchase goods and services form the market.
By educating the poor, their earning capacity will increase and the entire economy will grow.