adminConrad Gweru Correspondent
The future of social security in Zimbabwe is under threat due to a number of issues, key amongst them the changing economic environment that has forced companies to shed off employees.
The other reason is that of poor investment decisions by the National Social Security Authority which is currently managing two social security schemes, the National Pension Scheme and the accident prevention and Workers’ Compensation Scheme.
National Social Security Authority (NSSA) Harare Regional Employer Closures and Registrations Report for the period July 2011 to July 2013, revealed that 711 companies in Harare closed down, rendering 8 336 individuals jobless.
Statistics in the NSSA report concur with findings by the Zimbabwe Congress of Trade Unions (ZCTU) which also revealed that about 9 500 workers were retrenched last year. Zimbabwe’s unemployment levels are estimated at between 80 and 94 percent which is, however, contrary to Zimbabwe National Statistics Agency indications that only 11 percent of the population is unemployed. Employers and employees in the formal sector are the mainstay of NSSA operations but unfortunately, events prevailing point to a threatened social security environment as fewer people are making contributions to NSSA due to company closures.
The rise in the number of street vendors in Harare’s CBD including congestion in areas such as Glen View Area 8, Mbare Musika, is testimony that a number of retrenched workers have since found another haven.
While that could be a better fall back position, the later life of many of these individuals is under threat, especially at a time when they are no longer able to work and fend for their families.
The thriving informal sector in Zimbabwe is also pointing to a crippling.
In Zimbabwe, there are no social security schemes designed for the informal sector. Apart from NSSA, other occupational schemes include Mining Insurance Pension Fund (MIPF), Local Authorities Pension Fund (LAPF), Communications and Allied Industries Pension Fund (CAIP) and the Zimbabwe Electricity Industry Pension Fund. Complementary market-based social security schemes run by private insurance companies on a commercial basis have emerged alongside state based systems, even though they still play a marginal role in the total provision of social security.
Although social security schemes differ in their generosity across countries, in most cases they provide a minimum compensation in the event of illness, unemployment or retirement.
Unfortunately, almost all of them cover a small share of the total population in need mainly due to their focus on the formal sector which employs very few people in most African states. The lack of insurance against daily risks such as illness, unemployment, natural disasters, crop failures and such like can have serious short term and long term consequences for the concerned households, in particular because alternative coping instruments such as credit or savings are also not available or are at least not accessible to the poor.
All social security systems are modelled on European experiences and cater for people in organised public and private employment.
Although the Ministry of Labour and Social Services offers public assistance to the poor and vulnerable groups as provided for under the Social Welfare Act, the scheme has failed to be relevant due to perceived lack of priority by government as well as budgetary constraints given the non-contributory nature of the scheme.
By contrast, social insurance as a form of social security is financed by contributions and is based on the insurance principle, which means the elimination of uncertainty associated with loss for the individual or the household. This is achieved by pooling the contributions of a large number of similarly risk-exposed individuals or households into a common fund that compensates for the loss experienced by any member. There is thus a need for a policy shift in government that should see players in the informal sector, including farm workers, domestic workers and many other non-organized groups, being compelled by law or policy to contribute towards retirement or other unplanned for causalities such as illness and death.
It is the responsibility of government to ensure that every citizen enjoys the right to decent life, especially as they age or become incapacitated.
Online Reporter