Financing and governance challenges 2nd African Decent Work Symposium Yaoundé, Cameroon, 6–8 October 2010

The financial situation – an overview Total public social security expenditure by region, weighted by population, latest available year (percentage of GDP) Source: ILO Social Security Department database 2

The Financing challenge We know an have shown that elements of the social protection floor, such as basic social assistance for the active population, or social pensions can be financed by less than by less than 1% of GDP in some countries, the Bolsa Familia scheme in Brazil costs less then 0.5% of GDP.. We know from African and international experience that some developing countries are investing successfully in a social protection floor, or at least in elements thereof, for their population, such as Mexico, Brazil, South Africa, Namibia, Mauritius, Cape Verde, Nepal… Does Africa really not have sufficient fiscal space to reach wider coverage? …we think it is a matter of political will rather than being economically impossible, societies and governments chose to spend a certain share of public revenues on social protection as the following slide shows…

…demonstrating policy & fiscal space Size of government and proportion of government expenditure allocated to social security, latest available year 4

A possible long-term financing strategy Develop rational social protection development scenario Start small…define the future steps towards a complete floor and beyond Create the domestic fiscal space Increase efficiency of tax collection Widen the tax base Make more efficient use of existing resources Implement good governance principles Maintain effectiveness, efficiency, transparency only then systems remain sustainable Use foreign aid wisely… without creating further aid dependency…ultimately national systems have to be financed by domestic resources 5

What can the ILO do to help? Provide technical advice (just as it has done through programmes like STEP, and dozens of other TC projects of the last five decades…) in Policy development and analysis Good governance including through tripartite dialogue Actuarial, financial, budgeting matters Legal matters Management Capacity building…(Master Programmes in Maastricht, Lausanne, Mauritius, Programmes in Turin, tailor made training…) 6

Do we need an a overall national social protection financing policy? Questions Do we need an a overall national social protection financing policy? What strategies can be used to increase the fiscal space for social security? What mechanisms do we need to put in place to improve the governance of social protection? What are the instruments for starting, ascertaining and measuring the progress of national social protection policies ? 7