Of serious concern is the
fact that public pension in Tanzania through its limited coverage contributes
to social differentiation. Public pension system is therefore often seen as
serving the interests of the working elite, and not
reaching out to those most in need of coverage. Public pension systems in the
country by and large restrict their coverage to those who work in the formal
sector. Yet it is clear that the general picture in Tanzania reveals an
increase in the informal sector and in unemployment, while the formal sector is
generally shrinking.
Concentrating attention on
reforming that part of the public pension system which covers only a small part
of the labour force at the expense of the informal sector and those who are
unemployed is inherently unequal, as it directs the attention of government and
other stakeholders away from a huge segment of the population with no or little
social security coverage.
There is, therefore, a need
to investigate ways, means and modalities of extending coverage to these
excluded categories. For those who are unemployed, social assistance support
needs to be provided through the budget. Yet, the amounts spent on universal or
targeted budgetary programmes in most African countries are meagre, with the exception
of countries such as Kenya Gabon, Mauritius, Namibia, Botswana and South
Africa.
Furthermore, social
assistance usually lacks a constitutional and statutory basis, with the result
that social assistance is often seen as a matter of discretion, and not of
right. In particular as far as those in the informal sector are concerned,
several options are available and need to be considered. Experience from other
countries suggests that it is possible to extend coverage to informal sector
workers. Two approaches have been used in India, namely bottom-up and top-down
approaches. The Self-Employed Women's Association (SEWA) India, is a good
example of a bottom-up approach. In Africa, the micro-insurance model has been
used to extend health care to informal sector workers.
In Dakar, Senegal, the Wer
Welé micro-insurance scheme provides health insurance services to people in the
informal sector. Micro-insurance is also in use in Tanzania and the most well
known scheme is the Mutual Society for Health Care in the Informal Sector
(UMASIDA) in Dar-es Salaam. The same applies to Ethiopia. The top-down approach
extends social protection to informal sector workers. A good example is the
introduction of welfare funds by the Government of India at both the national
and provincial (state) level. These funds, which cover around 10 million out of
an estimated 370 million workers in the unorganized sector, are funded from
levies on employers and manufacturers.
There is no one solution to
the fundamental problem of extending social security coverage to informal
sector workers. The first option would be to extend the social
assistance system to as many as possible of those who are poor and vulnerable.
To the extent possible, steps should be taken to strengthen the social assistance
framework of support for those who were not able to make other provisions. It
is true that, as a matter of general experience, the economic and fiscal
situation is such that in most of Africa the prospects for the introduction of
a tax-based social safety net either on a universal or a means-tested basis are
poor.
Yet there are encouraging signs of
how such a public funded safety net regime can progressively be introduced. An
example of this is the overwhelmingly positive direct (individual) and indirect
(household) impact of a carefully targeted means-tested old age grant in South
Africa. A similar kind of regime has been introduced in Lesotho, where a basic
old age pension is made available to poor people over the age of 70.
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