Formal social protection

The main forms of social protection which provide households with a minimum level of well-being, and a shield against risks broadly include; contributory (social insurance), non-contributory (social assistance), and labour market interventions. Contributory or social insurance schemes protect people against the risks and consequences of livelihood shocks by providing benefits such as pensions, and unemployment, health and weather insurances. This kind of social protection tends to have very low coverage in some African countries because are employment-based, excluding the unemployed and those working in the informal sector. Under social insurance the benefit is paid without regard to finan­

cial circumstances.

The contributory formal insurance schemes benefit very few. In many cases they only benefit formal sector workers, excluding a majority of the population that is based in the informal and agricultural sectors. Box 5.2 highlights the extent of exclusion in some countries in West Africa.

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Box 5.1

Coverage of Contributory Social Security systems in selected countries in West Africa

• In Guinea, the National Social Security Fund covers only 2 per cent of the population

• In Cameroon, the National Social Providence Fund and the civil service plan cover approximately 10 per cent of the population, and benefits do not include health insurance.

• Coverage of the two similar schemes in Cote d'lvoire is also approximately 10 per cent.

• In the Congo, the National Social Security Fund and the Civil Sen/ice Pension Fund reach 15 per cent of the population and, due to the financial problems of these schemes, benefits are low and irregularly paid.

• In Togo, National Social Security Fund covers less than 20 per cent of the population.

• The social security systems in Senegal cover about 20 per cent of the population.

Source: UNICEF and ODI, 2009.

Social assistance is non-contributory and offers support to extremely poor individuals and households, usually through the provision of social grants (Slater and McCord, 2009). For example, Namibia introduced a project called the Basic Income Grant (BIG) for about

$100 per month, with some degree of success. In some countries this form of social pro­

tection is means tested. Example?

Labour market interventions are programmes designed to protect workers, for example, minimum wage legislation and labour laws discouraging discrimination.

The dominant social protection instruments used in Africa are outlined in table 5.1 below.

The variety of instruments permits to elicit some tentative remarks not on the individual country performance but also on certain common characteristics of each scheme. Whist the benefits and constraints can be easily detected (see remarks) what is also crucial is the effect that these instruments have on overall development and accelerating towards social outcomes.

The spill over effects of these schemes on increased productivity is a case in point. Simi­

larly, ensuring adequate nutrition through food safety nets ensures well being and welfare enhancing for beneficiaries. Risk-reduction instruments strategies such as insurances pro­

vide coping strategies that smooth consumption patterns, increase savings and investment and hence economic development.

The African Social Develcpment Report 2009

Type of strategy Country examples Contributory Social Protection Schemes

1. Contributory Nigeria, South Africa, Ghana, Egypt, pension schemes Cameroon

2. National Uganda, Nigeria, South Africa, Ghana, Health insurance Egypt, Gabon, Benin, Namibia, Libya, Algeria schemes

3. Private Zimbabwe, Zambia, Libya, Algeria health Insurance

schemes

4. Community- Rwanda, Mali, Guinea based insurance

schemes

5. Weather or crop Ethiopia, Kenya, Morocco insurances

Table 5.1

Examples of non-contributory social protection strategies implemented by African countries

- Severe limits to the expansion of coverage, high transaction

- Lack of skills and technology to improve efficiency with which

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Type of strategy Country examples Productive Safety Net Programme (PSNP) in Ethiopia;

-Improving Livelihood through public work programmes in Malawi;

-Zibambele in South Africa -Public Assistance in Zimbabwe,

- Libya - free education, near-free health care

-Child Survival Project in Gambia

-Non-emergency food aid and food-for-work.

Urban Food for Work (UFFW) in Ethiopia;

-Internally-Displaced People Relief Assistance Project in Liberia;

-North-Central Food Response in Malawi.

-Dedza Safety Nets Pilot Project (DSNPP) in Malawi

-Public Welfare Scheme (PWAS) in Zambia Minimum Income for School Attendance -Mozambique;

-Pilot cash transfer scheme Kalomo district in Zambia

-Old-age pensions in Botswana, Namibia, Mauritius, Lesotho, Liberia and South Africa

-Orphan care benefit system in Botswana;

-Minimum Income for School Attendance in Mozambique;

-Child Support Grant and Care Dependency grant in South Africa;

-Transfers to needy families (income-tested) in Mauritius

-School feeding programmes - introduced in many countries

-The Hunger Safety Net Pilot Programme and the Pilot Cash Transfers for Orphans and Vulnerable Children in Kenya;

-Mchinji Social Cash Transfer Pilot Scheme in Malawi;

-Pilot cash transfer scheme in Kolomo district in Zambia.

Unemployment insurance in Algeria and Egypt -Starter Pack Programme, targeting

smallholder farmers, in Malawi, Kenya, Zambia -Protracted Relief Programme in Zimbabwe

Remarks Benefits

-Most of the schemes are used as safety-net instruments and were introduced at the end of the 1980s and onwards. These schemes have been largely used to mitigate the effects of structural adjustment policies and or to address the needs of those who have not benefited allow them to meet their basic needs( (nutrition, shelter, education, health and warm clothing)

Problems

-As most of the schemes are targeted to specific groups, there is a potential for type 1 error

-There is a risk of further stigmatizing the beneficiaries, put into question in the context of the

current economic slowdown, with government revenues dwindling and additional demands

The African Social Development Report 2009

Type of strategy Country examples Remarks Labour market interventions

1. Minimum wages Minimum wages are guaranteed in a vast Advantages

and labour majority of African countries but effectively - Increase the welfare of the laws implemented in few countries only low-skilled workers and the

most vulnerable groups in the

-Do not allow market forces to fully operate because providing little flexibility to firms to

adjust wage costs in a context of economic downturn;

Source: HelpAge International and AU (2008); Holmes and Jackson (2008); United States Social Security Administration (2007).

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Examples of social protection for socially-excluded