Youthful Namibia today, pensioners tomorrow

Vincent ShimutwikeniNamibia, a country often described as young and vibrant, is currently experiencing a demographic phenomenon that carries significant implications for its socio-economic landscape, especially its retirement and pension systems. The 2023 Population and Housing Census confirms that approximately 71.1% of Namibia’s 3.02 million people are under the age of 35. This youthful majority presents both a challenge and an unprecedented opportunity for policymakers, especially pension fund managers and regulators.



Namibia’s youthful demographic demands a focused approach that prioritises youth engagement to secure tomorrow’s pension system. How can the country harness this demographic strength to create a resilient pension system, one that not only supports future retirees but also responds to the current socio-economic challenges young workers face?



A youthful majority



with an ageing horizon



According to the 2023 census, Namibia’s population pyramid is heavily weighted towards the young. About 56.1% of the population falls within the working-age group (15 to 59 years), while only 6.8% are currently 60 years and older. This large base of young and working-age individuals presents an opportunity to fuel economic growth, expand the tax base, and increase contributions to retirement savings schemes.



However, this demographic advantage must be viewed in context: like many countries, Namibia is moving toward an ageing population. Falling fertility rates and better healthcare will increase the proportion of elderly dependents, straining social security and pension systems. Proactive steps are essential to prepare both the youth and the system for this shift.



Youth unemployment and informality



Namibia faces persistent challenges with youth unemployment, which stood at about 44.4% according to the 2023 Population and Housing Census Labour Force report. High unemployment and informal work undermine the ability of many young Namibians to contribute regularly to pension savings schemes, potentially exacerbating future old-age poverty. It is worth pointing out that Namibia’s retirement savings are amongst the highest in the world as compared to the size of the country’s GDP. These savings have been used to invest in the country’s economy through prudent pension fund investment regulations.



The opportunity: Harnessing the demographic dividend



A youthful population can be a powerful economic engine, commonly referred to as the demographic dividend, if adequately supported with employment opportunities, financial literacy, and accessible social protection mechanisms. Namibia’s current pension system, predominantly structured around formal sector employment, has a limited reach among the youth, many of whom work in the informal sector or face unemployment.



To harness this demographic dividend, it is imperative to expand pension coverage to include informal sector workers, youth in casual employment, and entrepreneurs. Several similar countries offer practical, innovative models Namibia can learn from.



India introduced the Atal Pension Yojana, a government-backed pension scheme aimed at informal sector workers. It allows for flexible contributions and includes government co-contributions, helping to incentivise participation among low-income earners. The scheme is supported by widespread digital infrastructure and has seen growing uptake among youth and rural populations.



Kenya launched the Mbao Pension Plan in 2009, a mobile-based micro-pension scheme that enables individuals to contribute as little as KES 20 (approximately N$3) daily via their mobile phones. This model is designed for informal sector workers and leverages Kenya’s extensive mobile money ecosystem to make pension saving simple and accessible.



Rwanda’s Ejo Heza scheme is a voluntary long-term savings programme specifically tailored to informal sector workers. It includes government top-ups for the poorest contributors and operates through a low-cost digital platform, making it both accessible and scalable. This model promotes inclusivity and encourages long-term financial planning among underserved communities.



Limited awareness, lack of tailored communication and accessible platforms alienate many young people, especially those from rural or underserved communities. International models show that technology can transform pension systems, making them more inclusive and efficient. In Namibia, with high mobile phone use even in rural areas, digital solutions hold great potential. Around 76% of those over 16 own a mobile phone, and 41.3% of those are smartphones.



Fintech innovations such as mobile money integration, push notifications and user-friendly pension apps can simplify contributions, reduce administrative costs and expand outreach. Embracing digital platforms can also enhance transparency and trust in the system, particularly among younger users who are already tech-savvy. By embedding technology into the very design of pension systems, Namibia can overcome barriers such as irregular income, geographic isolation, and limited financial literacy.



Equally important is promoting early financial literacy among youth. Global research shows early retirement planning leads to better financial outcomes. Namibia’s youth need targeted education on saving early, compound interest, and understanding pension products.



A strategic path forward



A strategic path forward for future-proofing Namibia’s pension system requires a multifaceted and inclusive approach. First, legislative reforms are essential to mandate broader pension coverage, particularly targeting informal sector workers and those participating in the so-called ‘gig’ economy (short-term contract/freelance economy). By embedding inclusivity into the legal framework, the country can ensure that no segment of the workforce is left behind.



Government incentives, such as tax benefits or matching contributions, can motivate young workers to save through recognised pension schemes.



Capacity building for trustees and pension providers is also crucial. Recognising the needs of younger contributors enables more responsive pension management, while increased system flexibility aligns with the changing nature of youth employment.



NAMFISA’s monitoring and evaluation of pension schemes is necessary, and as regulator, they will need to ensure that they remain relevant and effective amidst changing economic and demographic conditions.



Dignity and security in old age



Namibia stands at a critical juncture where demographic trends can either become a boon or a burden. This large youth cohort holds immense potential that, with careful planning and action, can strengthen the country’s retirement system for years ahead. Ignoring this reality risks deepening future inequalities and overwhelming social welfare systems.



The future of retirement in Namibia depends not only on preparing for an ageing population but also on building a culture of savings, inclusivity, and financial literacy among today’s youth. The sustainability of pension funds relies equally on present efforts and future policies.



All stakeholders – government, private sector, educational institutions, and civil society – must work together to create a pension system that enables Namibia’s youth to retire with dignity and security. Ultimately, the financial habits and policies we cultivate today will determine tomorrow’s prosperity.



*Vincent Shimutwikeni is the manager of legal support services at RFS Fund Administrators.



This is his personal opinion.