Old age grant bill nears N$8 billion

Government expects the cost of Namibia’s old-age pension programme to rise to nearly N$8 billion annually following the latest N$100 increase in the monthly grant, finance minister Ericah Shafudah has revealed.

Speaking at a budget dialogue in Windhoek on Wednesday, Shafudah defended the increase, saying the public often underestimates the financial scale of the programme and the number of beneficiaries it supports.

“There was N$100 that was earmarked to add to the pension for the elderly,” she said. “But what people do not know is that in totality, we have 226 000 elderly in this country.”

Each beneficiary currently receives N$1 600 per month, in addition to funeral benefits, which already pushes the state’s annual pension bill to roughly N$7 billion. This will be increased to N$1 700.

“With the additional N$100 increase, that was already N$500 million. So add to that, it’s almost N$8 billion,” Shafudah confirmed.

She stressed that public criticism of the relatively modest increase often overlooks the cumulative cost of the grant.

“People think it’s just a drop in the ocean, but when you add the sums, it makes a difference."

Growing social commitment

Over the past decade, Namibia’s old-age grant has steadily increased as government attempts to shield vulnerable citizens from poverty and rising living costs.

The monthly pension stood at N$600 in 2016 before being gradually raised to N$1 400 and later N$1 600 in 2024.

Pressure to increase the amount has intensified in recent years amid rising living costs. In the 2023/24 budget, the grant rose from N$1 300 to N$1 400, pushing overall social welfare spending to more than N$10 billion.

A year later, the 2024/25 budget increased the grant by N$200, bringing monthly payments to N$1 600.

During that period, the Ministry of Gender, Poverty Eradication and Social Welfare’s budget rose to around N$8 billion, reflecting government’s prioritisation of social protection despite tight fiscal conditions.

Pressure on public finances

In the 2025/26 budget, roughly N$7.2 billion was earmarked for social grants, with N$3.7 billion specifically allocated to old-age pensions.

The trajectory highlights both the programme’s expanding reach and the growing pressure it places on public finances.

Shafudah said the 2026/27 budget continues the trend by funding the N$100 increase while attempting to balance spending against competing national priorities.

The social sector, including health, education and welfare programmes, now accounts for about 62% of the projected N$88 billion national budget, meaning even modest increases in grants require careful fiscal planning.

Long-standing debate

Calls for a larger pension increase are not new. Late former president Hage Geingob previously floated targets of between N$2 000 and N$3 000 per month.

However, treasury estimates have warned that such an increase could push the annual pension bill beyond N$10 billion, a figure comparable to the full budgets of major ministries such as health or education.

Despite the fiscal burden, the grant remains a crucial source of income for many Namibian households.

Census-linked data indicates that roughly 136 000 households depend primarily on the old-age pension, particularly in rural areas where formal employment opportunities remain limited.

Shafudah said while the N$100 increase will not eliminate the financial pressures facing elderly citizens, it represents government’s attempt to balance social protection with fiscal sustainability. - [email protected]