State lottery will help poverty eradication

by Dr Asoka Seneviratne

 It may be the case that without stable and sustainable revenue sources, the programmes designed for poverty eradication cannot be implemented effectively to generate the expected outcomes.

In this respect, the introduction and implementation of a solidarity tax has been proposed amidst criticisms by some quarters. At the same time, it is essential to exploit other possible and results-oriented revenue sources that can be affordable by the public.

Government’s decision to investigate the feasibility of establishing a state lottery during the Harambee period is in the right direction because it will support and accommodate the concern of the public to participate and contribute to poverty eradication, which is a multifaceted development challenge.

Generally, a state lottery is a very promising, constructive and effective instrument to find extra funding for programmes and activities of poverty eradication together with other benefits it entails.

Developing countries like Sri Lanka, India and Malaysia have state lotteries. In general, it is called national lotteries with the National Lotteries Board in Sri Lanka and elsewhere organised and managed by the governments. A state lottery plays a vital role in financing various forms of development programmes and activities with participation and contribution by the public. In this respect, it may be useful to establish a state lottery in Namibia on the basis of the operational experience and the developmental outcomes of the national lottery in Sri Lanka.  The practice in Sri Lanka is that revenue collected by selling national lottery tickets is credited to a separate account exclusively designed to finance the various development programmes and activities of the government.

In other words, revenue collected by selling national lottery tickets cannot be used for any form of financing, such as loan repayments by the government.

On the basis of the experience in Sri Lanka, close observation and examination would find that the people in Namibia can afford to buy a state lottery ticket with a small sum of N$1, N$2, or N$3 daily, weekly or  monthly for a lottery draw depending on the money they have.

In a broader sense, this expenditure by the public is a voluntary contribution for development programmes and activities for which many would like to contribute by buying a lottery ticket or tickets with the hope of winning tax-free money.

The decision and inclusion of a state lottery in the Haranbee Prosperity Plan (HPP) has been  considered by some as a tragedy, as according to them, a state lottery destroys the well-articulated HPP.  Furthermore,  the proposed state lottery  has  been  viewed  as a socially and economically  destructive element by some critics  on the basis of alleged negative effects, mainly  that a state lottery is  “gambling”. In short, the proposed  state lottery should not be treated and considered as a form of gambling or promoting gambling similar to at  gambling houses. We know well what gambling houses are meant for. With respect to the decision for a state lottery, how it is going to be organised and operated is a matter of great importance. However, the operational aspects and experience in the national lottery in Sri Lanka may be useful to Namibia along with the above concern.

Similar to Sri Lanka, the proposed state lottery tickets will not be sold by gambling houses in Namibia. They will be mostly sold by street and village vendors. Indeed, according to some critics, gambling is not ethical in many ways because it will affect the people financially, socially and morally.  In this respect, it is the scale or extent of gambling that is the matter, as some people have a bad habit for gambling as the top priority in their lives without any concern to their obligations and commitments to their families and societies. In that way, gambling is not justifiable for its impact on people, particularly the poor. However, the decision to  establish  a  state lottery should not be labelled or treated similar to  gambling at gambling houses on the basis of  its  face value,  and accordingly by citing it as a harsh element to the poor without the knowledge and understanding (a)  of its purposes; (b) mode of operations together with (c)  an array of benefits to individuals, the poor and Namibia in general.

In fact, buying a N$1-3 lottery is not gambling at all similar to gambling at gambling houses. The reason is that the buyers of state lottery tickets, with the hope of winning prizes, directly contribute to the development activities of the country. This cannot be compared to gambling at gambling houses at all because money collected by gambling companies will hardly contribute to the development endeavours in the country.  Moreover, the public do not know who are the winners or big winners at gambling houses and how much gambling houses have contributed to the government as revenue.  With respect to the national lottery in Sri Lanka, all above are well known to the public which is of paramount importance.  It should be noted that an array of the developed countries’ harsh experiences in state lottery  do not go with the experiences similar to Sri Lanka. This is also very relevant and important in assessing the decision for a state lottery.  We need to assess the overall developmental benefits of the proposed state lottery with its purposes and in the context of Namibia. In fact, there are many benefits of a state lottery for the people and the country and this can be explained on the basis of the experience in Sri Lanka.

  • Dr Asoka Seneviratne is the Director: Programmes and Institutional Development with the International University of Management (IUM), Windhoek. He was the Special Advisor, Office of the President, National Planning Commission (2006 – 2011), appointed by the President of Namibia. The ideas expressed in this article are not anyway related to IUM.