Financing Social Protection in the Region

ECONOMIC POLICY RESEARCH CENTRE REPORT ON THE REGIONAL CONFERENCE ON FINANCING SOCIO-PROTECTION IN EAST AND CENTRAL AFRICA AT LAKE VICTORIA SERENA HOTEL ON OCTOBER 22^ND TO 23^RD 2013.

BY Esther Nakkazi (This is a report from the two day meeting where I was a rappotuer) 

Summary of Executive Director, EPRC, Dr. Sarah Ssewanyana’s speech at the regional conference on “Financing Socio-Protection in East and Central Africa.”

This conference is very important and timely partly because the population affected by poverty and destitution remains very large in the region and without reliable and predictable resource allocation to socio-protection, some countries in the region may not be able to meet part of the international commitment to the Millennium Development Goals (MDGs).

At the same time, the relatively high population growth rates in most of the countries in East and Central Africa means that the demands for socio-protection are likely to continue rising for the foreseeable future.

Declining Socio protection budgets

The socio-protection landscape is changing fast on the African continent and this calls for rapid response to the changing environment by governments as well as other players. First, the overall budget allocated to socio-protection has declined in the recent past as national governments are focused on expanding infrastructure.

The decline in budgets is happening against a backdrop of renewed global commitment to eliminate extreme poverty by 2030. As such, there is need to engage the Ministries of Finance in our respective countries on the need for additional resources for SP programmes.

Small scale cash transfer schemes

Two, different countries are pursuing different SP programmes. For instance, a number of countries in the region have initiated socio-protection programmes the most notable being cash transfer schemes. But most of these schemes being implemented are relatively small scale in comparison to the need. As such, identifying ways of expanding such socio-protection schemes is a major priority for the various actors engaged in socio-protection programming including policy makers, development partners, politicians and researchers in the Uganda.

Natural resource discoveries and socio protection

Three, the discovery of commercially viable deposit of natural resources in the East and Central Africa region has the potential to change the socio-protection financing landscape in the region.

Uganda is in the process of developing its oil resources in the Albertine region while Kenyan process is also underway in Turkana. Such vast natural resources, if utilized appropriately, offer an opportunity to finance nationwide socio protection programmes exclusively from the national budget.

Members here should actively engage in debate in their respective countries on how the proceeds from natural resources should be governed and managed.

Training and Research on SP

Four, development partners have responded to changing post-conflict environment by supporting SP training and research. For example, the IDRC sponsored the initiation of the Master of Socio-Protection degree at the University of Mauritius. 

Similarly, IDRC has also supported universities in Kenya, Burundi and Uganda to undertake a regional research project examining the impact of socio-protection programmes on the welfare of vulnerable groups. It notable that academicians have also taken a keen interest in socio-protection issues in the region—either through training or research.

The two day conference focusing on financing socio-protection in east and central Africa was organised by the Economic Policy Research Centre (EPRC) and Development Research and Training (DRT). EPRC’s mandate is to contribute to evidence-based policy making and the Centre has over the past few years actively engaged in the design of socio-protection programmes as well as regular monitoring of the performance and reach of Uganda’s socio-protection programmes.

For instance, EPRC and DRT contributed to the design of the Uganda’s social cash transfer scheme—the Social Assistance Grants for Empowerment (SAGE) scheme and also participated in the baseline survey for the impact evaluation of the SAGE programme being spearheaded by the Oxford Policy Management (OPM).

Participants were from Kenya, Malawi, Mauritius, South Africa, Tanzania, Zambia, and the host Uganda. Unfortunately, participants from Rwanda and Ethiopia could not make it due to lengthy clearance procedures. Renowned socio-protection experts from outside Africa (Italy) also shared their experiences.

The conference was organized by EPRC and DRT with support from the Think Tank Initiative (TTI) at IDRC and the Friedrich Ebert Foundation. Check out EPRC’s research activities from the website www.eprc.or.ug or follow the Twitter handle EPRC_Official or like the Face Book page Economic Policy Research Centre, Uganda or the blog http://eprcuganda.blogspot.com.

Summary of Beatrice Mugambe, the Executive Director for Development Research and Training (DRT) at the regional conference on “Financing Social Protection in East and Central African: 

Learning from Experience.

Purpose of the conference;

We hope to stimulate discussion and learning about various options of financing of Social Protection programmes, particularly in low income countries, especially in Eastern and Central Africa.

We are keen to hear about innovative ways of mobilising resources and effective ways of using them to achieve Social Protection objectives in our countries. These objectives rotate around eradication of extreme and chronic poverty, vulnerability, income inequality and social exclusion.

The work of EPRC and DRT is to support decision-making processes, give evidence-based analysis, information and data to guide decision makers and donor agencies, government, private sector and civil society among other stakeholders.

Some of the processes that have led us to this moment are in 2005 Launch of the 1st Uganda Chronic Poverty Report; 2006-2008 Design of a Cash transfer scheme; 2008 1st International Conference on Social Protection for the Poorest in Africa; 2010-2013 Launch of Pilot Senior Citizens Grant (SAGE) in selected districts, Learning & documenting lessons and experiences on the pilot and ongoing process of developing a Social Protection policy framework.

In 2013, there is this 2ndIinternational Conference on Financing Social Protection in East and Central Africa: learning form experience.” What is next?

Financing of Social Protection programmes has featured in various formal and informal meetings and low income countries but in many of these countries, Governments have not reached a consensus on committing to finance Social Protection programs due to various reasons. Yet others have already designed and implemented innovative interventions. More positively also, the debate is increasingly involving policy makers, development partners, civil society, media and ordinary citizens.

The debate has also generated consensus that Social Protection interventions are among key strategies that will contribute to significant changes in the lives of majority of people that are currently unable to find employment, feed and send children to school, find quality public health care and deal with weather-related risks that affect their main source of livelihood. On the other hand, many countries are aspiring to become middle income and First World in the next 3-4 decades.

The discussions today will set us in motion to answer some of the questions that remain unanswered in policy debates. The conference has over 10 interactive sessions, appropriately chosen to help focus our discussion to those policy issues that resonate to our country needs at this point in time. At this meeting, the 2nd chronic poverty report was launched.

DAY 1:  A summary of the issues raised about ‘Financing Social Protection’;

Declining Social Protection budgets;

Budgets in East and Central Africa are more focused on infra-structure development while Social Protection budgets are declining. There is a need to engage the ministries of Finance and the society to streamline Social Protection and the program gets integrated with other government programs. All stakeholders should be involved.

Sharing of experiences:

Countries should be encouraged to share what works because what worked for one country does not necessarily work for the other. It’s important for countries that have just discovered minerals like those in the East African region to try and copy what other countries did, for example Brazil.

In 2001, Norway came with the fiscal policy, all government revenue is put in the pension account, and only the returns are used for future refunds and to keep people safe. It’s not because they have oil revenue, it’s because the revenue from the mineral resource are taxed. Real returns on investments are the ones used to handle other expenses which are not oil generated. The idea is that we collect taxes from you then we put it back to the people collectively.

When you invest in dealing with poverty, it helps other sectors because poverty has a pull down effect hence affecting those who are not poor. It is important to support others. After all, the fastest growing countries are those with fine equality investments schemes for poverty eradication.

Natural resource for financing Social Protection:

The discovery of natural resources is one way to improve Social Protection. Natural resources can now be used to facilitate Social Protection. Governments are being encouraged to mobilize revenue from Natural wealth to fund it.  

The most dangerous part of Social Protection is when the mineral resources will come in, prioritization and allocation may become a problem.

Cash transfer or not?

At times Social Protection is mistaken for cash transfer. Social Protection calls for national and international design of Social Protection programs. The major players in making this decision are the Private sector, civil society, Donor agencies. Government has not reached a consensus to support Social Protection, but the big question is can Uganda afford to support it?

Cash transfer welfares should be recognized.

Social Protection is a Right;

Everyone has a right to Social Protection. The responsible bodies should realize that Social Protection is a human right and not just some kind of charity given to people others are taking pity on or to eradicate  poverty and for those who are socially excluded.

South Africa has a bill that stipulates that Social Protection is a basic right. Establishment of a system of social security encompassing health care contributes to Social Protection .There are rights that are not restrained to social contribution.

Funding Social Protection:

There are many ways of financing Social Protection even in low income countries. Social Protection can be financed through taxing basic income; progressive realization, natural resource wealth, social grants and constitutional commitment.

It’s also important to note that governments should roll out sustainable options to handle Social Protection. The challenge faced is that of targeting, so as the work is being done, a lot of consideration should be put on targets.

Another issue is ‘Are we asking the right question as to why Social Protection is not being funded?’

When dealing with Social Protection, we should know that we are also dealing with major issues like Education, Health, and Poverty eradication, so measures should therefore be put in place to handle the challenges this activities come with.

Credit should be given to civil society organizations and development agencies that have contributed towards the improvement of the Social Protection agenda.

Donors funding Social Protection:

Most initiatives are donor funded and even if it’s limited, it can avert poverty. Other avenues that can be looked at are family networks, friends and our networks.

Areas that should be looked at to try to improve livelihoods include, programs for children, Enterprises for women, school feeding programs, credit schemes and women economic empowerment among others.

Barriers to Social Protection uptake?

Among the barriers to the uptake of Social Protection in East and Central Africa are issues like no one thinking of a holistic approach to Social Protection, the concerned parties went sector wise, project wise and then stopped there, so this alone did not help.

Social Protection should be a political and leadership issue:

Until Social Protection becomes a political issue then resources will be made available. Leaders will explain where the money belonging to Social Protection cases will have gone and in what ways everybody will have been taken care of.

So we should then ask ourselves, how do we get Social Protection institutionalized into government, how do these things translate into Social Protection, when and how do we integrate the outcomes of Social Protection into the system, it’s a reality that we need resources, but how do we tap into domestic resources.

In the East African countries, the evidence available indicates that it’s not about the availability of resources; it is more of a political question. There is confusion between government expenditure and Social Protection. This expenditure doesn’t go down to the very poor because of the in efficient distribution systems.

 Prioritise Social Protection:

Social Protection is not expensive, governments’ activities are focused on the same expenditure (infrastructure), and it’s an assumption of tradeoffs between efficiency and functionality. But the major focus is supposed to be put on prioritization. They assume things are constant, that they are in a fix and yet when you grow your resource base also grows.

Opportunity cost of Social Protection:

Social Protection is that before you give you take, with competing needs, what do you give up? To increase protection, there is need to prioritize. Leadership in this situation is key, because once resources are allocated, it is important that they reach the targeted group and that can only happen with proper leadership.

Consideration should be put on the cost of doing things and focus should therefore go to a regional agenda. Those pursuing Social Protection should find a way of how to get recommendations that will come out with a way forward. When allocating resources, poor people should be put first.

A survey done in Kenya showed that if people who fall in the category that need Social Protection continued with school, the rate of Economic shocks, life cycle shocks and copying strategies in case of drought out breaks would be reduced.

The survey also indicated that if women were to be given a chance to accumulate wealth, the standards of living would improve. Some households remained very poor because they were given very little money.

Role of Non-state actors;

Non-state actors inform government because most of them are non-partisan. These may include community based; faith based; professional groups; local, national and international NGOs among others.

When all these are put together, there is a collaboration and hence success. In Kenya for instance, 87% are run by Community Based Organisations (CBOs). So there is need to handle issues arising like lack of solid government structures, coordination and clear policy frame work. The sources of funding should be clarified, organizational groups should be formed and above all sustainable strategies adopted.

Social Protection as a social policy;

It refers to collective public efforts affecting and protecting the social well-being of people in a given area. Social policy can be used as a collective intervention to directly affect social well fare and social intervention. It also has a multiple tasks effect; it embodies production, redistribution reproduction and reconciling.

We need to adopt the Prophylactic social policy, where you treat the disease before you even get it because it will cost you more if you contract the disease.

DAY 1 Discussion Highlights and Questions:

·         Integrating and streamlining Social Protection.

·         Integrating the Social Protection agenda with that of the MDG targets

·         Who are we targeting for Social Protection because about 50% of the populations in Africa are poor? So which group should be tackled first?

·         Who takes the leading role in Social Protection?

·         What are the outcomes of inclusive growth blended with Social Protection

·         When governments focus only on infrastructure and not Social Protection what happens?

·         How will the discovery of mineral and oil resources affect Social Protection and what research bench marks will it provide?

·         Who should benefit from Social Protection; the vulnerable, those at risk, the deprived and critically poor.

·         Can the discovery of minerals and oil change our incomes and attitudes towards Social Protection?

·         Social Protection is about protecting people from vulnerability, or risk, that’s not only before or after it has happened.

·         Are we in position to administer the set targets? Why are we not in position to hit our own targets?

·         Are our countries being pushed to allocate money strategically for Social Protection?

·         Is it only those at risk, the vulnerable, those with shock and those in a crisis that should be targeted?

·         Why do governments wait until it becomes a major issue instead of handling problems when they are still at the initial stage?

·         Achievements should be celebrated because there is a massive improvement of people living above the poverty line.

·         A combination of traditional and contemporary approaches should be adopted.

·         What is the exit strategy if the strategies put in place do not work as planned?

·         It should be noted that the cash transfers that have been given to some people have helped raise standard of living.

·         When cash transfers are being made, all the vulnerable people and those at risk including the elderly should be considered.

·         Measures should be taken according to the location and standards of living ( Area, Location, Household size)

·         Households should be empowered to cope with shocks.

·         Involve local institutions because they work well with people at the grassroots.

·         The government should be tasked to explain to what extent and at what pace its ready and able to handle Social Protection.

·         Communities should be encouraged to organize themselves into small groups

·         Social Protection assistance should not lead to dependency; instead they should be linked to empowerment and given empowerment packages.

·         Extended families should be encouraged to take care of their own and cultural values apprehended. This would cut down on the numbers of those suffering because everybody is taking part in Social Protection matters.

·         What is the role of young people who should have originally taken care of the elderly and now don’t want to help the old because they are getting money from the state.

·         In South Africa, one dollar 25 cents would buy u a loaf of bread and a bottle of water, but by August all of them will have died because they have no clothes and shelter when winter comes. This is a deliberate type two errors that indicates that only a fraction of the chronically broke people are the ones being taken care of.

·         The people who receive money cannot share with those who are not in the project, then we become an open laboratory, and that brings conflict. The government still needs to handles those things so that people don’t complain

DAY 1 Challenges;

•        Social Protection is limited in coverage and outlook

•        Being donor driven comes with its negative impacts

•        Some governments don’t consider Social Protection as a development strategy.

•        Programs and policies are not harmonized

•        Social Protection systems are undocumented.

•        Do we share before we grow or we grow before we share, is the question that we should have at the back of our minds.

·         Transparency in identification of the beneficiaries is key but how is it handled this?

·          There is no place, voice and space for children and older people. They are not involved in the issues that affect them.

·          People just meet in hotels discussing issues concerning children and the elderly without their involvement.

·         There are some strategies that are not feasible for instance, old people were supposed to have mobile money active phones, but some of them live in places where there is no power let alone mobile network.

·         When it comes to the administration of cash transfers, there were administrative inefficiencies.

·         Strict measures like prosecuting the corrupt should be put in place if not we will never address the Social Protection problem.

·         The money given is also inadequate, although the beneficiaries live below the poverty line and whatever little they are given they are able to do something with it.

·         People may relax because they think government is taking care of the elderly.

·         It is not easy to convince politicians to adopt Social Protection.

·         So before all the above, we should then ask ourselves and to get it institutionalized into government as well as integrate the outcomes of Social Protection into the system.

·         In some countries, the money the elderly are given for their upkeep is converted to buying books and pens and yet it is the duty of the government to handle such issues, so we should stop looking at things and attend to issues from a broader perspective.

·         While people think they understand Social Protection, we have policies and not market failure, where people are now looking at issues narrowly and not as broadly as it’s supposed to be.

DAY 1 Recommendations;

•        Governments should invest in Social Protection projects

•        There is need to finalize Social Protection policies.

•        Incorporate Social Protection policies in the national budget

•         Enact school feeding programs and focus on women entrepreneurship

•         Civil societies should be actively involved.

•        Social Protection can be financed through taxing basic income; progressive realization, natural resource wealth, social grants and constitutional commitment.

•        Rethinking the problem is necessary at this stage.

•        More thought should be on what lessons we can learn from the past, we should be looking at the hard ware not the software kind of attitude.

•         

DAY TWO:

Day 2- Discussion Highlights:  

§  We need to have a change of mind about Social Protection.

§  We should endeavor to improve the wellbeing of the marginalized society

§  Improve the wellbeing of older people. The wellbeing of older people is more important than cash transfers

§  There should be a dignity of existence for all our people.

§  How does mono tasking and mono thinking help generate these other dimensions of wellbeing?

§  The route you take depends on the political will because even now in its early stages, governments can decide to put their money in Social Protection.

§  The model for funding Social Protection depends on the demands of the country. GDP has generally increased in different countries. The government can look at what they have then they would allocate resources according to the needs. Then other money can come from taxation, borrowing, and grants, among others.

§  Without political power you are just a person people sympathizes with, Social Protection eligible people should come together as a constituency and put their demands forward and place their demands for what they need.

§  Dependency on the good will of the ministry of Finance does not help without personal commitment. It cannot be sustained by the will of those who suffer. When you are with the contentious problem, they will feel for their issues because they affect them directly unlike when someone else is the one handling their problem or someone talking for them.

§  There is much more work to be done, when it comes to Social Protection and to put it in its proper place so that it does not interfere with the rest of the programs or Systems that are consistent with the already existing policies.

§  Corruption can easily occur when it comes to allocation of the resources, the articulation and management of systems. A plan should be put in place so that in the near future, people should be in position to have NSSF numbers.

§  We are just at the beginning of Social Protection at the moment. If the beneficiaries can be organized en be elected to power, then they can be heard in parliament, since they will be represented.

§  Affordability of Social Protection ultimately means willingness and society‘s willingness to finance specific programs depends on how they are designed and how they are delivered.

§  It’s important to note that people are willing to pay taxes when they actually know where that money is going and if it benefits them directly. Cutting down subsidies and red tape would help in mobilizing for Social Protection funds.

§  Is Social Protection a public good? Government provides public goods and private sector provides private goods.

Discussion: How can we come to some form of consensus?

v  Protecting children mostly those who have lost both parents.

v  That we all want dignity at an old age.

v  We all want medical insurance in cases of complicated diseases. People are urging that the politicians are going out for treatment while peasants stay in the country to die.

v  We also want to help the disabled

v  An Unemployment insurance should also be put in place for all the able bodied people. Those who lose employment so that people’s children do not drop out of school.

v  We all want to be treated with dignity. It is not acceptable when you walk on the street and you find people eating off garbage cans.

What are the weaknesses and myths of Social Protection?

v  It encourages people to be lazy and idle

v  It taxes the hardworking people to help the idle ones

v  It shifts priority from economic growth and development to poverty and re distribution

v  It is a foreign conspiracy to increase dependency on the west.

v  There will come a time when we will have to accept the idea because we have orphans and vulnerable people as well as the old.

Dr. Ezra Suruma; Social Protection is a Human Right

Dr. Ezra Suruma, the Economic advisor to the President of Uganda, said his views on Social Protection have changed after listening to a discussion at the conference on ‘Financing Social Protection’ in East and Central Africa at Lake Victoria Serena Resort in Lweza organized by the Economic Policy Research Centre (EPRC).

The former minister of Finance said that when he was still minister, he had opposed the idea of cash transfers to poor people under the Social Protection programme.

“In 2005, one of the junior ministers in the Ministry of Finance traveled to a conference and came back with the idea of Social Protection. He wanted us to adopt the idea of some donors making cash payments to our vulnerable people. I had spent 20 years in government trying to bring about poverty alleviation and we had some degree of success. Having donors pay our people seemed unsustainable. I was not convinced. I thought it would involve donor dependence yet we were trying to be donor independent,” said Dr. Suruma.

But now his position on Social Protection has changed mainly because of the prospects of oil revenue. One of the ways to use oil revenue is to follow Alaska and Norway, which have a fund in which Ugandans are owners or chairs in the fund.

Currently, the policy is that all oil resources should go to infrastructure. It is good but it benefits foreigners especially those who build roads and railways.

Suruma would like to see Ugandans benefiting directly especially for purposes of accountability. “Oil will continue to be a big problem if some of the funds are not paid directly to the citizens,” he says.

The Ugandan government and the community are yet to grasp the essence of Social Protection and this is the main problem; it seems like it is an idea from the outside. We have not yet reached a point where Social Protection is a widely and fully accepted program. We need to create more awareness among the communities.

What are we trying to do in Social Protection? Everybody gets old and ill. So there should be a common ground on how to move together to deal with illness, old age, health, destitution, unemployment, poverty.

All this, in my view, we are still way down the line in terms of competing with other ideas, policies and programs for the government budget.

We need to convince and persuade government because potentially there is a constituency of people who will benefit from old age pension, medical institution and disability payments.

This is something that cuts across the whole country and I believe with the oil coming we can get a Norwegian type of funding where we get a cash transfer for old people benefiting from Social Protection.

We also need to politicize Social Protection because the issue of dignity is important in a person’s life. In German, it is not acceptable for a German citizen to fall into a sub-human state. I wish this idea could come to my country so we can value human life to the point of it not being an individual responsibility but a social responsibility.

The debate in Uganda is if you are poor that is your problem and that you are not working hard enough. We need to recognize that some people through no fault of their own are poor. It is a social responsibility to ensure someone in that state gets adequate help.

We need to focus on a targeted continuous campaign on raising awareness on Social Protection. In 2005, I was not convinced on Social Protection but now I am on board.

Financing Social Protection conference closure:

Summary of the closing remarks by Minister Madada:

The minister in his closing remarks emphasized communication, understanding and appreciation of Social Protection saying there are resources available for Social Protection, but it is a matter of understanding and appreciating the issue.

For instance, the government of Uganda in 2009, gave special grants for people with disabilities, it therefore means that there is money in government. If we do not allow Social Protection the rich will become richer, while the poor are becoming poorer.

In Uganda, Vision 2040, Social Protection is embedded in the system. Chronic poverty cannot be broken without affirmative action. Social Protection should not be limited to direct income support.

Ends.