Informal sector avoids social security

 
NSSF ARUSHA COMMERCIAL BUILDING
By Zephania Ubwani
The Citizen Bureau Chief
Arusha. Many Tanzanians are not keen on joining social security schemes because of the belief that the welfare bodies do not solve their immediate financial problems, it was observed here yesterday.A survey conducted recently by the National Social Security Fund (NSSF), one of the oldest pension schemes in the country, indicated that 70 per cent of the people interviewed said the body was of little benefit to their day-to-day lives.

Questioned on whether they would want to join a social security scheme, a majority of them (70 per cent) said they would not. NSSF director general Ramadhani Dau said most did not consider NSSF or any other social security fund to be of any immediate assistance.

He told journalists covering the Regional Security Forum in Africa, which started in Arusha yesterday, that some of the people interviewed during the survey claimed their immediate concerns were how to pay fees for their children in school and not life after retirement.

"Most of them look at these schemes as institutions which do not provide immediate benefits," he said, adding that the thinking cuts across all the social security schemes in the country because many people were concerned by how to acquire hard cash on the spot.
Dr Dau said the problem would delay the current drive to woo workers in the informal sector to join the social security schemes where unlike in the formal sector, saving in the fund would be voluntary and not by law.

The NSSF boss revealed that the situation was more or less the same in the whole of Sub-Saharan Africa, adding that despite willingness to extend the service to the informal sector, governments in the continent will continue to target the formal sector workers for pension schemes.

"Of course, if you want to increase coverage, the best option will be going to the informal sector. However, the informal sector in most of our countries is not very much organised and not easily accessible," he pointed out.

Currently Tanzania has eight social security institutions, including the NSSF, with a coverage of less than one per cent of the entire population. The institutions offer short and long-term benefits to members.

Dr Dau revealed that a bill will be tabled in Parliament shortly to amend legislation regarding the benefits of NSSF members under which the latter would be able to access part of their contributions before retirement to enable them meet some financial obligations such as purchasing houses.

Earlier when opening the Forum at the Arusha International Conference Centre (AICC), the minister for Labour and Employment, Ms Gaudensia Kabaka, said although Tanzania has not registered satisfactory successes in many aspects of social security, there were some achievements in the health sector.