Social protection: Uganda makes progress, but challenges persist

40 districts to receive senior citizens grants
March 17, 2016
Dokolo elderly persons demand SAGE program
March 17, 2016

Social protection: Uganda makes progress, but challenges persist

Erineo Bahemirwa struggles to stand up on his own without any support due to his advanced age.

The 82-year-old is a resident of Kyesiga, a suburb of Hoima municipality, Hoima district. Though he is too old for any kind of work, he still meets his basics of life.

“I am a pensioner,” he says adding: “My pension money is enough to cater for basic needs.” Much as he could not disclose his monthly pension, Bahemirwa even uses part of it to pay tuition fees for one of his granddaughters.

“This little pension money is very important, especially when you are aged,” he narrates. Without pension, he says, he could possibly either be depending on his children or living a destitute life. In addition to a monthly pension, he also received gratuity that he used to set up a small cattle farm, where he further earns money.

Bahemirwa is one of a few Ugandans who enjoy social protection on retirement or when they can longer work. The 52-year-old Jackson Irumba, on the other hand, was sent into early retirement due to health complications. He was a primary school teacher in a privately-run school in Nyamarunda trading centre, Kibaale district.

In his energetic days, Irumba planted three acres of coffee and an acre of bananas for local brew as ‘an insurance’ of where he would get income in old age. However, both the bananas and coffee were attacked and wiped out by banana bacterial wilt and coffee wilt respectively.

To make matters worse, he never made any savings for the future yet he was not a civil servant to qualify for government pension. “I normally receive financial support from my daughter who is a teacher,” he said. With no income of his own, and would therefore live a destitute live, if the daughter wasn’t offering a hand.

Many Ugandans face similar difficulties like Irumba. Majority work in the informal sector and when they cease to work either due to advanced age or other reasons, they fall back into a poverty trap, because while they worked, they never saved for their future. Therefore, they either depend on handouts from their immediate relatives or live destitute. That is why every person needs some kind of social protection.

SOCIAL PROTECTION

Irumba calls on government to also enroll him on the senior citizens grants to be able to earn an income. However, the senior citizens grants under Social Assistance Grants for Empowerment (SAGE), is currently run only in 14 districts, where elder persons are given a monthly cash transfer of Shs 25,000. However, Kibaale is not one of them.

Even then, he may still not quality because the grants are available to persons above 60 years of age. Due to SAGE interventions, most Ugandans look at social protection in terms of ‘cash transfers’ to senior citizens grants. However, Stephen Kasaija, the head of Social Protection Secretariat in the ministry of Gender, Labour and Social Development, says social protection is much broader than cash transfers.

Social protection, Kasaija explains, is any public or private interventions that address issues of risk and vulnerabilities that occur in the life cycle of every individual. It includes protection of orphans and other vulnerable children, the disabled, youth, women, unemployed and elder persons, among others. Social protection in Uganda is enshrined in the National Objectives and Directive Principles of State Policy in the constitution.

But how is the country faring on the social protection front? Kasaija believes that Uganda is making serious inroads in as far as social protection is concerned, though there is still a lot to do. “We now have a draft policy in place that looks at social protection broadly,” he said. The draft policy outlines two key interventions to social protection; namely, social security and social care.

Social security, he says, includes contributory schemes for those employed in salaried jobs in the private sector. Such schemes include mandatory contributory schemes for retirement like National Social Security Fund (NSSF) where employers and employees save 15 per cent of one’s monthly salary to the fund for the future, and insurance, among others.

Besides contributory schemes, there are also non-contributory schemes like government pension where civil servants who qualify earn gratuity and a monthly pension and cash transfers schemes like senior citizens grants and others.

SOCIAL CARE

Beside social security, the policy also identifies social care as another strategic component of social protection. Social care involves direct interventions like providing a home and other basics to orphaned or abandoned children, the extremely disabled or extremely old and vulnerable elders.

However, government has not invested a lot in social protection, leaving the bulk of the interventions to non-government organisations (NGOs) that have built foster homes for abandoned children and others.

“At the moment, the country has only one government-run reception centre in Naguru for abandoned children and the rest are handled by NGOs without government support. But this is a responsibility of government. We need more reception centers in the country,” he says.

NARROW CATCHEMENT

A 2014 report authored by the World Bank titled Reducing Old Age and Economic Vulnerabilities:  Why Uganda Should Improve Its Pension System”, reveals that Uganda’s work force is estimated to be 15 million people. However, only 2.5 million are employed in the formal wage-paying jobs.

Out of the 15 million workforce in the country, Kasaija says, only 750,000 save for their future with NSSF while only 250,000 civil servants on government payroll are potential pensioners and only 50,000 are on government pension. These statistics reveal that less than one million Ugandans in formal employment are eligible for retirement benefits.

The report calls for improved pension system even for those in the informal sector to help reduce old-age vulnerabilities, promote social transformation and accelerate economic development.

In a bid to widen the catchment area, government enacted the Uganda Retirement Benefits Regulatory Authority (URBRA) Act as an important step towards liberalization the pensions sector and making it user-friendly.

David Nyakundi, the Chief Executive Officer of URBRA, said the Authority has so far made a number of regulations under the act in execution of its mandate. The authority also licenses and supervises other employer or institution-based pension schemes, where employer helps employees save for their retirement.

“So far, we have 92 [retirement benefits schemes] schemes both private and public,” he said. He observes that all these schemes have a narrow catchment area.

“Currently the system is designed for people assumed to be earning monthly salary. It is a colonial-designed sector that left out the informal sector,” he says.
“Now that we have the huge and powerful informal sector reality, we need to design a retirement benefit scheme that incorporates them,” he argues.

REFORM GOVERNMENT PENSION 

Under government pension scheme, civil servants don’t contribute to their pension and gratuity and running such a scheme is costly to the taxpayers. Dan Ngabirano, a lecturer of law at Makerere University, argues: “So, there is that whole burden on government and which the government will not sustain because as the population is increasingly becoming healthier, people live longer and as such you will have more people on pension,” he said.

Kasaija observes that in future the government pension may be too huge for government and, therefore, needs to be reformed. He wants it to be made contributory, so that civil servants just like employees in the private sector, contribute towards their pension.

“We are trying to make it also contributory. We need to harmonize the pension system and make government pension contributory like in the private sector,” he argues. 

Kasaija also argues that contributions to NSSF and other retirement benefits funds should not be rigid. For instance, these schemes should allow a member to withdraw a certain percentage in case he or she becomes temporarily unemployed as he or she looks for another job or be able to use the savings as a mortgage.

Jim Yong Kim, World Bank president, in a statement issued on June 30, 2015, called for universal social protection. He said social protection is going to be a strong pillar in the new Sustainable Development Goals (SDGs) that will replace the Millennium Development Goals (MDGs).  He calls on countries, Uganda inclusive, to implement social protection laws and policies to achieve substantially for the poor and vulnerable.

MINIMUM WAGE

Another tool of social protection the country is looking at is the recently-reconstituted Minimum Wages Advisory Board. Cabinet approved the board recently. The board, headed by former secretary to the treasury Chris Kassami, is expected to undertake a comprehensive study on the wage trends in different sectors of the economy by analyzing employment trends, the cost of living, and wage trends according to professions in different countries.

In a paper titled Minimum Wage in Uganda: An Urgent Call authored by Friedrich-Ebert Stiftung (FES), an international NGO, observes that a minimum wage is first and foremost a basic social protection floor to guarantee a basic survival standard in a given society. 

“Many Ugandans are working, but their earnings are too meagre to lift them out of poverty. They are known as working poor, who need protection,” the report reads.

Uganda last set a minimum wage of Shs 6,000 per month in 1984, which is currently the minimum wage. The Minimum Wage Advisory Board in 1995 recommended it be revised to Shs 75,000 monthly for unskilled workers, but the recommended was never adopted.

Elders-receive-cash-

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>