Social security coverage still low in Tanzania

19th March 2013

Minister for Labour and Youth Development,Gaudensia Kabaka

Tanzania has a total of six social security funds, but the coverage in terms of number of members remains abysmally low relative to the country’s population.

The 2012 National Population and Housing Census puts the number of Tanzanians at 44.9 million, while all six schemes in both the Mainland and Zanzibar have a combined membership of not much more than one million.

While 98 percent of the coverage is in formal sectors, informal sectors are covered by only 2 percent of the 1 million. However, population in informal sector is large compared to formal sectors and coverage informal sector is poor; of course, this is very serious challenge for the schemes currently operate.

Social security is a basic right for every citizen wherever he/she resides in accordance with the United Nations Human Rights Declaration of 1948. Its implementation was followed up with ILO Social Security No. 102 Declaration of 1952.

These Declarations were ratified by Tanzania in 1965. Bearing in mind the paramount importance of this right, putting into consideration how vital is the question of Social Security, the government designed and implemented social security system that has poor coverage methods and that does not take considerations of that right to all citizens. Social Security in Tanzania is still a privilege as coverage is relatively low for both informal and formal sectors. The right of social security to citizens is denied by government or the social security institutions which lead to poor coverage.

According to ILO report of 2011 exclusion of informal sectors is dominated by number of issues such as lack of Permanent address, real income obtained per month, proper knowledge and education of social security issues are main problems that excludes informal sectors to be covered by social security funds.

However for my opinion this is not the case since the coverage can be extended for the policy maker by looking on the areas like tax drivers, barbershops, (women and men) small scale entrepreneurs, Bongo Flava musicians, bongo movies and agricultural sectors.

This can be done by enforcement of laws that current exists by looking at fundamental nature of the activities and registration number from TRA. Amount of contribution should be ranked at minimum point so that most of these business people may afford to contribute.  

Good coverage of these areas will obtain great impact of social protection. In top of that most of these groups have unions that enable them to join together for betterment of their life. Besides, the coverage of informal sector will increase size of memberships and enhance collection capacity.

For instance, significant achievement on the coverage especial on the informal sectors is revealed by Ghana and Mauritius. Ghana particularly is one of example that provides a good lesson for our funds could be easily followed. Ghana have single scheme that includes all formal and informal workers.  The annual report of SSNIT in Ghana of 2011 shows, formal workers contribute a total of 18.5 percent, employees 5.5 percent and employers 13 percent of their salary and 6,000 cedi for informal workers. 

While in Tanzania a contribution for formal employees is 10 percent and employers 10 percent that makes total 20 percent of contribution to fund this depends on the scheme a member covered. For informal workers remain unknown to the citizens. Furthermore, the population of Ghana is estimated of 25 million and the coverage is 1.4 million members of social security.

Indeed innovativeness to some of the schemes is not implemented yet since the legislations provides an opportunity for schemes to cover informal sectors in real sense the coverage in informal sectors is inefficient.

These remain challenges of most of schemes to figure out how to recruit informal sectors and how benefits should be paid in case of retirement or other contingencies such as job injuries, disability and survivors.

Recruitment of new members collections of contributions are key activities that all funds must performs at high level, this is not attain yet simply because lack of innovativeness in marketing, coverage of informal sector remain in paper (legislations) not in action and those who are self-employed are not trusted the funds due to complicated procedures during benefits processing.

Lack of awareness, education and the importance of social security of course are other challenges funds need to overcome them. These challenges must be tacked if these funds wish to extend coverage.

To extend coverage schemes must have new look on self-employed workers, by providing awareness, education and importance of social security to them.

Of course the issues of permanent address, income obtained per month, proper knowledge and education should be overcome seriously. Current remittance of contributions must have new mechanism for self-employed in order to give them opportunity to be covered by social security funds.

Of course the policy maker should design policy in such way that contributors are main responsible for the remittance of their contributions rather than the current system where employer is one who is responsible for the remittance of contributions. In order to attain these, funds should provide education to marketers and potential members as well.

•James Kahatano has identified himself as second-year Bachelor of Science in Social Protection student at the Institute of Finance Management in Dar es Salaam and an admirer of The Guardian. Contact: kahatanojames@yahoo.com.