Social Security Programs

SADC versus EAC.

Robert OketchDivisional Director

EAC and SADC COUNTRIES

EAC SADC

KenyaUgandaTanzaniaBurundiRwanda

South AfricaSwazilandTanzaniaSeychellesLesothoMozambiqueBotswanaDemocratic Republic of Congo (DRC)AngolaMadagascarMalawiMauritiusNamibiaZambiaZimbabwe

Rationale for EAC vs SADC

Common protocols within SADC and EAC regions independentlyCommon themes in both regions

Harmonise socio and economic policies within respective regions,

Promotion of trade amongst partner states,

Harmonise customs and tax practices,

Long term goal of monetary union,

Facilitate free movement of citizens of partner states,

Free labour movement (immediate in case EAC but progressively in case of SADC)Social security rights and portability hence central theme

Expansion of integration beyond SADC implies link to EAC

Relevant Social Security Articles

SADC adopted Code on Social Security in line with Charter of Fundamental Social Rights in SADC; including

Article 2: PrinciplesSolidarity and redistribution; Variable geometry (a member state may move faster than others on adoption),Multi-actor (state, social security institutions, private sector but state maintains responsibility),

Article 4: RightsEveryone has right to social security in line with code; at least equal to ILO minimum standards per convention 102 of 1952,

Articles 5 and 6: Access to social assistance, social allowances and services on a needs basis; adequate social insurance mechanisms for income protection

Other Articles: Access to healthcare; no gender discrimination , maternity benefits in line with ILO minimum; death lump sums and annuity survivor benefits, universal old age benefits, unemployment risks, occupational injuries, disabilities, protection of children (foster care, adoptions, orphans),Migrant workers; monitoring

Relevant Social Security Articles

EAC adopted Common market protocol in 2010 and set free movement of persons and labour within EAC.

Article 13: Allows access to social security of host country in line with existing legislation,

No specific guidance at inter government levelSocial Security Annexure still under negotiationECASSA has proposals that it aims will be incorporated in the Annexure

SADC articles (unlike EAC articles) have the effect of prescribing minimum protection package in line with socio-economic status of each country but no provision on levels and timeframe to achievement.

Access to essential healthcare, safety work environments, and collaboration on health,Income security to childrenPoverty alleviation( for unemployed and the poor),Income security ( for the elderly and disabled),Mandatory social insurance schemes

Relative per GDP per capita( USD):2011

Assume Per capita GPD proxy for affordability in terms of budget allocationsAverage per capita GDP much higher within SADC than EAC

Source: United Nations population division/ World factbook, 2011 (CIA 2011)

Actual Systems :EAC (ISSA :April 2011)

Old age,Disability

and Survivor

Sickness and

Maternity(Cash)

Sickness and

Maternity(Cash/Care)

WorkInjury

Unempl-ment

FamilyAllowances

Kenya Y : ee/er5%/5%

Y: er Y: Ins Hosp: ee

Y:Ins: er N N

Uganda Y:ee/er5%/10%

N N Y:ins:er N N

Tanzania Y: ee/er10%/10%

Y: ee/er Y: ee/er Y: ee/er N N

Burundi Y : ee/er4%/6%

Y : er Y :er Y: er3%

N Y : er

Rwanda Y:ee/er3%/3%

Y :er N Y: er2%

N N

Actual Systems :SADC (selected states)

Old age,Disability

and Survivor

Sickness and

Maternity(Cash)

Sickness and

Maternity(Cash/Care)

WorkInjury

Unempl-ment

FamilyAllowances

Mauritius Y B: G Y ee/er

6%/10.5%

Y: er Y: Hosp: G Y:NIns: er Y: ee/G1%/bal

Y:G MT

S Africa Y B:G MTY:Dis:G MT

Y:ee/er Y:Hosp:G Y:Nins:er Y:ee/er1%/1%

Y:G MT

Tanzania Y: ee/er10%/10%

Y: ee/er Y: ee/er Y: ee/er N N

Swaziland Y B: G MTY : ee/er5%/5%

Y : er Y :er Y: ins:er N N

Actual Systems :SADC (selected states)

Old age,Disability

and Survivor

Sickness and

Maternity(Cash)

Sickness and

Maternity(Cash/Care)

WorkInjury

Unempl-ment

FamilyAllowances

Botswana Y B: G

Y: er Y: Hosp: G Y:NIns: er N Y:G MT

Madagascar Y:ee/er 1%/9.5%

Y:er Y:er Y:Nins:er N Y:er MT

Malawi (n law)N

N N Y: ins/er N N

Seychelles Y B:GY:ee/er

2.5%/20%

Y:er Y:Hosp:GNHPlan

Y:Nins:er Y Y:G

Zambia Y : ee/er5%/5%

N Y :Hosp:G Y: Nins:er N N

EAC Vs SADC

Other 6 SADC states provide combined benefit packages below those by Seychelles but higher than Malawi

No EAC state provides an old age Basic Pension funded by the state as opposed to 6 states in SADC. Within SADC, the level of this pension is very varied ( generous in some high per capita GDP countries like Seychelles and modest in others such as Swaziland)Only Seychelles and Botswana have universal benefits ( not means tested)

Virtually all SADC countries with high per capita GDP have Basic State Pension No unemployment benefits and Family allowance benefits (social assistance based) within EAC. Family allowance programs more common within SADC on a means tested basis. Within EAC, there are several cash transfer programs on pilot basis e.g OPCT in Kenya.

A number of SADC states operate national insurance mechanisms for work injuries. Within EAC , in all cases where benefit is provided, the private insurance model is used and contribution risks transferred to employers.

Yaounde Tripartite Declaration on Social Protection Floor: As Benchmark

As adopted by 47 African member states of ILO

Priority on policies and initiatives to extend coverage to those who have none,Adoption of convention 102( minimum social security benefits)

Governments and local partners to undertake decisive steps for extension of social security coverage(horizontal –national protection floor and vertical-higher levels of social security meeting the minimum standards to as many people as possible),

Basic set of social security guarantees( healthcare to all; income security to children in line with defined national poverty line to facilitate nutrition, education and care; target the vulnerable( women, migrant workers, informal workers; those affected by HIV/AIDS) who are unable to earn sufficient income on labour market to enjoy minimum incomes through social assistance, transfers or employment guarantee schemes

Yaounde Tripartite Declaration on Social protection Floor: As Benchmark

As adopted by 47 African member states of ILO

All residents in old age and with disabilities enjoy income protection at least at the nationally defined poverty line ILO to provide strategic guidelines and provide plan of action to enable actualisation of adoptions with the support of AU, national , regional and international employers, world agencies such as world bank and IMF, ISSA and global civil society movements

SADC programs (for SA and few other countries) are significantly ahead of EAC programs in moving towards Yaounde adoptions

SADC: Family Allowances Trends(from SASSA statistics)

Impact of expansion of family grants

Significant growth in coverage for family allowances especially on child support grants ( which have highest impact: at least 22% growth in recipients since February 2009 i.e over 1.5 million).

Increased coverage of the aged and disabled

Deliberate policy to extend age of child recipients to 18 (child support)

Increased school registrations and attendance,Increased health as better nutrition,Income support to Poverty alleviation( for absolute poor),Expenditure on grants not exceeded 2% of GDPLong term projections show sustainability ( expected gradual decline in numbers of recipients)

Is there Justification to use experience to support rapid implementation of similar programs in SADC and beyond ? (Varied geometry?)

Basic Social protection Floor: Is it affordable?

ILO study on selected 7 African and 5 Asian countries( 2008 by Krzysztof Hagemejer)

Package:Universal old age and disability (30% GDP per capita – (0.6%-1.5%) of GDP),Basic child benefits (15% of GDP per capita:max of 0.5USD per day)-1.2%-3.6% of GDP,Universal access to essential healthcare( based on Namibia and thailand experience), - 1.5%-5.5%Social assistance/100 day employment scheme-benefit set at 30% GPD per capita- 0.3%-0.8%

Possible to structure program at between 3%-4% of GDP

MUST be costed for each country(fiscal/demographic trends/labour markets): Costing to include long term projections to ensure sustainability

ECASSA: East and Central Africa Social Security Association

Established in 2007 as non-partisan, non-profit making organisationMembers are institutions involved in one or more aspects of social security within EAC ( mostly parastatal entities)Aims:

Promote delivery of quality social security services in EAC,Encourage joint research on social security topics in EAC,Facilitate social security awareness and training in the region,Establish contacts and encourage information exchange and experiences amongst members, andCo-operate with Governments, regional and international organisations and other stakeholders in promoting social development in the regionPromote awareness and training in EAC region, including maintaining a experts database

ECASSA: Bujumbura workshop (Jan 2011)

Held on 27th-28th January 2011 and following declarations made in light of 4 year experience of ECASSA initiatives

ECASSA secretariat to be made ISSA’s focal point in relation to EAC region

Resolutions for EAC:Governments to create/strengthen enabling institutions to widen coverage scope as part of achieving united nations millennium development goals. AU to follow up actions,Harmonize legal provisions to guarantee migrant workers basic minimum benefits across the region,Member states to commit to an agreed minimum % of GDP towards extending social protection coverage and set minimum entitlement levels,Member states commit to make laws that make it mandatory for employers with 5 or more staff to set up occupational schemes or register onto an umbrella scheme

ECASSA: Bujumbura workshop (Jan 2011)

Resolutions for EAC (continued):Add provision within Social development protocol to compel member states to issue progress reports on extension of coverage,Adoption of best practice approach in constitution of Boards for institutions responsible for delivering social protection,Recommended Study on viability of a Regional Advisory Team to monitor and recommend improvements in social protection administration in the region,Resolutions to be upgraded to agenda items at relevant inter-governmental meetings of the African Union,All governments within the region to provide update reports on resolutions during the next workshop to be held in January 2012ECASSA secretariat to establish country progress scorecard on resolutions, Endorsement of October 2010 Yaounde Tripartite Declaration on implementation of Social protection Floor and November 2010 Khartoum Declaration of African Ministers in charge of Social development.

Challenges: EAC and SADC

Coverage:Limited to formal employment (exclude Basic programs)Self employed (not covered or on voluntary basis: low take ups)Informal sectors( bigger issue in EAC as growing rapidly)

Adequacy of benefits:Low in several countries (exclude supplementary cover)Low contributions/ earnings limitsInefficient administration platforms/governance/preservationinequity

Fragmented benefit structures:Generous public service schemes/separate occupatioal schemes/work injury and other compensation schemes

Moving from Policy/Articles- Legislation- Implementation:Monitoring mechanisms and Political will to actualize programs

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