Good Practices in Labour Administration

Social security / Informal sector

The case of Senegal

This practice concerns a project in which the labour administration is extending the social security schemes to the informal sector. At the express request of the Minister of Labour and Employment in 1996, that ministry worked in conjunction with the Senegal Old-Age Pension Insurance Institution and with the Social Security Fund and, after consultation, set up the necessary elements for the social coverage of workers in the informal sector. Only the "Family Allowances and Protection against Industrial Accidents" section is operational for the time being, and its establishment is currently being assessed. The "Old-Age Pension Insurance" and "Sickness Insurance" sections are still undergoing a feasibility study.

The existence of the informal sector in a country means essentially that, depending on the circumstances, a large proportion of workers do not contribute to the tax revenue and social insurance contributions and consequently do not receive any social benefits in return. It is thus advisable to design a suitable voluntary scheme which would enable as many workers as possible to be integrated into a system of social insurance contributions and benefits. In Senegal, the informal sector and the State are the two main providers of jobs and incomes; in 1991 the sector accounted for 58.7% of the working urban population, the growth rate in the period from 1986 to 1991 having been 1.8 times as rapid as that of the modern sector. The importance which this sector has gained is compounded by a major change in the characteristics of its population as the result of the various structural adjustment programmes which have been implemented in the country since the 1980s.

The development of the informal sector was a response to the economic crisis and the macro-economic adjustment context (adaptation to the low incomes of households). The shock felt by households which had lost a State income or had suffered a drop in that income contributed to the "informalization" of the modern sector, since people sought new jobs in the informal sector and/or changed their consumption habits, i.e. there was an increase in the demand of these households for less expensive goods and services from the informal sector.

Until the recent past, the social security system and the informal sector ignored each other. Yet, on the one hand, the informal environment in Senegal is remarkably well organised and, on the other hand, the social security system has the legal and financial means for covering the sector. Despite this fact, the statistics of the groups covered compared to the total population revealed a situation which was worrying to say the least, for only 14% of the working population enjoyed social protection. This situation was due to several factors including mentalities, the distrust of the actors in the informal sector with regard to any administrative system, and/or the inflexibility of the arsenal of laws, which made it difficult to integrate this sector into the social security system. It must be added that instead of having a legally organised social security system society had a system peculiar to itself, which was based on human and family solidarity. But that system is now dying out, due mainly to the urbanisation phenomenon.

At the traditional May Day festivities on 1st May 1996, the Senegalese Head of State stated the following in substance in his address to the trade union and employer organisations:

Another challenge which we must take up is that of extending social protection to what is known as the informal sector. The contacts which have already been established are very encouraging, and I call on the Minister of Labour and Employment and on the Senegal Old-Age Pension Insurance Institution (IPRES) and the Social Insurance Fund (CCS) to take all of the necessary initiatives to meet the challenge of integration in this field.

Of course the objective is not to impose the rules governing the structured sector on this sector but to apply rules which take account of its specific nature and of the aspirations of those who operate in it."

This evocation was the sequel to a long quest of the crafts peoples' organisations, which had realised the urgency of their situation of social insecurity. It was a realisation which came about primarily through those who had left the structured sector for the informal sector as the result of staff cutbacks and closures of undertakings, mainly in the wake of structural adjustment programmes.

Concerted measures

On 8 May 1996 the Social Security Fund set up a working group with the assignment of preparing a study day on the issue, in which the deliberations were to focus mainly on:

• the target group,
• the reference wage,
• the benefits to be provided,
• the contribution rates and the dates of payment,
• the modalities of payment of benefits.

The study day on the extension of social protection to the informal sector was held as scheduled on 22 May 1996 under the auspices of the Ministry of Labour and Employment, the Labour Administration Support Project, the ILO Regional Office and the Friedrich Ebert Foundation, in the presence of the Austrian Ambassador.

It was attended by 146 participants from the crafts sector. The Ministry of Labour and Employment and the IPRES and Social Security Fund provided technical assistance, each conducting a workshop.

1. The Social Security Fund (CSS), which is a joint body composed of worker and employer representatives (the State participates as an employer), conducted the workshop on voluntary insurance against industrial accidents and occupational diseases. The discussion led to agreement on freedom of choice for workers to join a social security branch run by the CSS and on certain technical points such as the measure of adding a certified photocopy of the person's ID card to the membership documents:
2. The Senegal Old-Age Pension Insurance Institution, which is also a joint body, broached the topic of old-age pension insurance. The resolutions adopted concerned:
   • the definition of the persons affected, i.e. any individual whose activity is enrolled on the list of a chamber of guilds;
   • the methods for calculating and collecting contributions; contributions will be calculated for each individual trade and possibly also for each income bracket;
   • the age at which the payment of the retirement pension commences (this age is set at 60).
3. The Ministry of Labour and Employment chaired the workshop on sickness insurance.

It should be noted that this ministry has an "Advisory Council on Occupational Risks", in which the social partners take part. The recommendations adopted by the workshop participants concerned mainly:

• the establishment of a sickness insurance scheme,
• the introduction of a test phase for the creation of a sickness insurance institution (IPM),
• the introduction of a system of contribution taking in account the fluctuation in incomes,
• coverage by the scheme of workers and their families as well as their apprentices,
• establishment of an information and awareness-raising system to encourage craftspeople to join the scheme,
• public authority support for the creation, implementation and operation of an IPM for craftspeople,
• the unicity of contributions for the 3 schemes.

And finally, the study day led to the official signing of a Draft Agreement between the crafts peoples' organisations and the CSS on the freedom of choice of affiliation and the documents necessary for membership.

The role of the main actors

a) The craftspeople

Craftspeople are organised at three levels:

• grassroots groups,
• regional groups,
• national groups.

According to a recent census, there are approximately 78 000 artisanal undertakings with an approximate population of 400 000 craftspeople, permanent labour thereby being estimated at 158 000 persons.

b) The institutions

The Ministry of Labour and Employment is the body which supervises the IPRES and the CSS, which are run by management boards "comprising representatives of all of the participating members concerned, at least half of each board being composed of representatives of the participating members appointed in accordance with the statutes of the institution". ⁽¹⁾

• The IPRES and the Ministry of Labour and Employment have not yet launched their programmes within the framework of the project. The IPRES will be conducting a feasibility study after obtaining the necessary information from the crafts peoples' organisations. The ministry, on the other hand, will be instigating a test phase with a view to creating a sickness insurance institution (IPM). The pension system, which seems to be of particular interest to the craftspeople, is encountering a technical problem in that it seems to be rather difficult to handle the reality of the artisanal population. The age distribution of that population is not well known, and the feasibility study would provide a means of solving this problem. These two sections of the project could be launched rapidly by taking advantage of the current mobilisation of experts and technicians and of the work carried out by the CSS.
• The CSS has managed to launch its activities more rapidly. In concrete terms, it is Article 36 of the Social Security Code which stipulates that "voluntary contributors" shall receive the benefits of the industrial accidents and occupational diseases section, which allows the Social Security Fund to open to the informal sector.

The main features of the special social protection scheme for workers in the informal sector are as follows:

1. The target group - self-employed workers, who are traditionally defined on the basis of the following factors:
   • personal exercising of the activity concerned,
   • independence with regard to other persons,
   are the main target group of the special scheme as well as workers who operate in the fields of agriculture, fisheries, stock-breeding, handicrafts and the wholesale and retail trade.
2. The benefits proposed are:
   • antenatal allowances,
   • maternity allowances,
   • family allowances,
   • daily maternity leave allowances,
   • benefits in kind for mother and child in the mother-and-child protection centres,
   • coverage of industrial accidents and occupational diseases,
   • coverage of medical and surgical care, pharmaceutical and incidental expenses, hospital costs, and the supply, repair and renewal of prostheses and orthopaedic appliances, and
   • the annuity paid to the eligible parties of the victim in the event of a fatal accident.
3. The formalities concern:
   • membership: submission of an application for voluntary insurance accompanied by a national identity card;
   • the option concerning the risks covered: the voluntary contributor is free to choose coverage for one or several risks covered by the CSS;
   • the periodicity of payment: on a monthly basis with the obligation to pay within 8 days of the date of payment;
   • the suspension and termination of entitlements which occur whenever the monthly contributions have not been paid after two successive dates of payment. Entitlement ceases definitively at the end of a 6-month suspension period.

c) The partners

The National Union of Chambers of Guilds and the Friedrich Ebert Foundation are involved in the project. All of the chambers of guilds thus participate in the action to arouse interest and in the various seminars which are organised jointly for workers in the informal sector. The Dakar Chamber of Guilds has seconded an official exclusively for the management of the "social protection dossier" of its craftspeople. The social partners are also involved through their participation in the decision-making bodies of the ministry, the CSS and the IPRES.

Implementation

The CSS is thus the only institution which has actually launched its activities. To do so it carried out action on two fronts: action to promote the scheme and action to set up the facilities.

a) Promotion of the scheme

An information and awareness-raising campaign was first launched from 22 July 1996 to 30 September 1998, the objectives being to get each actor interested in being protected and to induce people to join the scheme. It was anticipated that as the result of this campaign the trend of movement towards the product would be strengthened and that more craftspeople would join.

The main targets were the densely populated areas, which will later be regarded as pilot cities (Dakar, Touba). In these zones the CSS has been targeting primarily the chambers of guilds and groups operating on a national basis.

The main means used to disseminate information were the national radio and television channels, leaflets and printed T-shirts.

The CSS is now planning to set up a popularisation programme in collaboration with the Senegalese radio and television corporation to integrate the products of the institution. The DSS directorate for decentralised surveys and services is to set up a committee (which will meet on a monthly basis) to pilot this project.

Extension of the project to other regions in the country is scheduled for the near future, and a joint campaign has recently been launched for that purpose by the CSS and the Directorate for Handicrafts in several regions.

b) Establishment of facilities

The project has been integrated into the activities of the CSS, which already had qualified staff. Special training for that staff did not prove necessary, since it is a complementary activity of a nature similar to that of the work they already carry out.

The CSS plans to decentralise and to set up agencies (kiosks) in the craftspeople's villages in Soumbedioune, Colobane and Touba, through which it should be possible to overcome certain difficulties, since all of the craftspeople will consequently have easier access and will thus understand the scheme better and contribute normally.

A computer programme has been devised for managing this scheme; it is run by the various persons in charge of the agencies and regional establishments (there are six agencies and 8 establishments) that have been set up throughout the country.

The project activities are supported by the CSS with the assistance of the Friedrich Ebert Foundation. A common budget was drawn up for the 1998 financial year.

Impact of the measure

Approximately 1000 craftspeople have been registered by the CSS to date for the Dakar region alone. This number is considered insufficient but normal in view of the complexity of the issue. Numerous craftspeople (500 in the Tamba region) have apparently stated recently that they intend to join the scheme.

The crafts people are particularly interested in the accident insurance and especially family allowances. The first case where a crafts man benefited from family allowances was on 22 July 1998.

The project was to be evaluated at the end of 1998 in the context of a seminar attended by the supervisory authorities, all of the partners and occupational groups. The purpose will be to ascertain the reaction of the target groups to the products offered. It will thus be possible to evaluate how satisfied the groups are and perhaps to make corrections or go further if necessary, that is to say, to propose it to all groups throughout the country, thereby maintaining the flexibility and voluntary basis of the scheme.

1. Article of Act no. 75-70 of 3 April 1975 pertaining to the social insurance institutions