Social Security in Africa Trade Union Priorities Kwasi Adu-Amankwah GS, ITUC-Africa

Outline of Presentation Social and Economic context Institutional models Levels of cover Financing and benefits Governance of the systems Challenges

Social and Economic Context On average, 50% of the population in Africa are considered to be poor The population is relatively young in most countries – 45 to 50% of the population are under 18 years of age in most of the countries 2 to 3% of the population are more than 65 years old (as against 10% at world level)

Social and economic context The informal economy and agriculture occupies approximately 80% of the population ILO Report on Global Employment Trends put annual unemployment rate in sub-Saharan Africa at 7.6% in 2008 with higher rates for youth and female employment at 11.3% and 8.2% respectively Above figure could not show the second round effects of global economic crisis which started in the first quarter of 2009

Social and economic context The share of vulnerable employment groups in SSA is 73% and was expected to rise to more than 77% in Female employment vulnerability stood at 80.4% according to the ILO figures for Demographic projections in Africa expect the number of people in Africa to double by 2030 In some countries, the impact of HIV/AIDS on younger people has put greater burden of responsibility for households and children on older people

Institutional Models Universal social security schemes Employment related schemes Means tested schemes A number of countries operate two or all three types concurrently

Universal social security schemes this type of scheme is normally open to all citizens (or other bona fide residents of the country) and pays flat rate benefits regardless of income level or employment Benefits may include pensions, child benefits, unemployment benefits, disability allowance or widow(er) allowance Only countries to have instituted this type in Africa – Botswana, Egypt, Mauritius, Namibia and South Africa

Employment related schemes These schemes are mainly for employed persons and are usually pension schemes funded by contributions from both employers and employees Voluntary contributions from self employed persons are permitted under some schemes Some categories of workers may benefit from non contributory schemes where pension is paid from the national budget

Means tested schemes These establish criteria for individuals or families as basis for accessing benefits – one example from Ghana is the Livelihood Empowerment Against Poverty (LEAP) in which income support is provided to poor and vulnerable people aged 65 and above with no source of income

Social security coverage Coverage is low and largely limited to workers of the formal economy In Niger, application to contribute to the Caisse Nationale de Seurite Sociale (CNSS) is required from registered employers on behalf of employees. Here as in a number of other examples self- employed persons and people operating in the informal economy are thereby excluded from coverage

coverage In Benin, their schemes cover about 13% of the population In Ghana the Social Security and National Insurance Trust (SSNIT) scheme covers less than 12% of the population SSNIT in Ghana established a subsidiary Informal Sector Fund in 2008 to provide for informal economy coverage

Financing Social Security Universal schemes are financed from general revenue. Resources may be generated from pay as you earn (PAYE) contributions from employees or tax on certain consumption goods (e.g. alcohol, tobacco, petroleum products) In Ghana e.g. 2.5% National Health Insurance Levy on some goods and services to finance National Health Insurance Scheme in addition to premiums

Financing Predominant system of financing comes from contributions from employers and employees Some e.gs of pension contributions as percentage of employees’ salary : Algeria 17% - Ee- 7; Er – 10 Benin 10% - Ee – 3.6; Er- 6.4 Egypt 30% Ee- 13; Er – 17 Ghana 18.5% Ee 5.5; Er- 13

Financing Guinean 6.5% - Ee – 2.5; Er – 4 Kenya 10% Ee- 5; Er – 5 Mauritania 3% Ee – 1; Er- 2 Zimbabwe 8% Ee- 4; Er - 4

benefits Social security benefits in Africa commonly cover old age, work injury, invalidity and survivors’. Maternity and child benefits are added benefit s in some francophone countries In some countries work injury, sickness and maternity benefits are employer liabilities

benefits Special word about medicare for which a few African countries have established comprehensive health insurance schemes – e.gs are Ghana, Gabon, Kenya, Morocco and Uganda. These are normally defined benefits Community based mutual health insurance schemes operate on limited bases in some countries like Niger and Rwanda

Governance of the systems Public trust in a number of countries – CNSS in a number of francophone countries; other is Ghana, Nigeria, Sierra Leone, Kenya, Boards of Directors or Regulatory Authorities play supervisory roles Some are also delivered through private financial institutions and fund managers

governance Difficulties associated with the schemes include weak managerial capacity Poor record keeping High administrative costs- ranges from e.g 11.6% in Benin through 25% in Ghana, to 37.6% in Chad Directive government interference in the running of schemes and poor investments

Challenges Consolidating what exists by improving management of existing schemes – including improving benefits and strengthening the participation of workers and their trade unions in the oversight of these schemes. This also includes building the capacity of worker representatives who are involved with this oversight

Challenges Extending coverage of social security to include the informal economy and all workers Trade union priority to use social security for mobilizing and building alliances.

challenges Trade union focus on the creation of fiscal and policy space that allows governments to generate resources that allow the institution of sustainable social security schemes Trade union contribution to campaigns for fairer and more equitable international trade, capital regulation, on debt Trade union contribution to African sub- regional and regional integration

Thank you