Innovation: The key to social security

The Portuguese-speaking African countries plan to develop social security systems. The ILO recommends an innovative approach to extending social security coverage.

Article | 14 April 2004

MAPUTO, Mozambique – The computer boxes stacked against the walls of some of the offices at the National Social Security Institute of Mozambique are an unmistakable indication of the computerization process that will lead to improvements in the provision of an essential service in the fight against poverty in this south-east African nation.

Yet the challenge goes beyond modernizing infrastructure. Although computerization will allow the Institute to improve registration of the more than 280,000 workers enrolled and more efficiently collect the money owed by debtor companies, which poses an ongoing threat to its financial stability, the ILO has suggested that an innovative strategy will be needed to improve coverage for 16 million Mozambicans.

According to estimates by the International Labour Organization (ILO), the existing institutional social security systems in Angola, Cape Verde, Guinea-Bissau, Mozambique and Sao Tome and Principe – the Portuguese-speaking African Countries (PALOP) – cover less than ten per cent of the economically active population.

The main reason for this low coverage is that the existing systems include only salaried workers, mainly in the public sector, on a continent where most families rely primarily on the informal economy for their income.

"Everyone should have access to social security", stated Joaquim Chissano, President of Mozambique, during the recent launch of the ILO Global Campaign on Social Security and Coverage for All for the PALOP countries in Maputo. "Our Government believes that social security is an asset rather than a liability; it is a way of helping to create a more equal society", he added.

Assane Diop, Executive Director of the ILO Social Protection Sector, emphasized, in Maputo, that social security should be considered "a key element in the fight against poverty". He also suggested to the PALOP representatives at the launch of the Global Campaign that in a continent where the majority of workers are in the informal economy "the problem of low coverage should be tackled with inclusive strategies on a community basis".

Five years ago, with the collaboration of the Government of Portugal, the ILO initiated the PROSOCIAL programme of technical cooperation for the development of social protection systems in the PALOP countries.

The first phase of the project focused on supporting the formulation of national social security policies. "It was necessary to have a vision of the future", explained Alessandro Giuliano, an ILO specialist who has coordinated the development of the PROSOCIAL programme in the PALOP countries.

The second phase focused on social security institutes, their procedures and what they would need to do to increase coverage, and on plans for the future.

The third phase, which coincides in the PALOP countries with the launch of the Global Campaign, is the implementation, through training and computerization, of legal mechanisms to support a social security policy and action to strengthen the institutes.

"The new structures should extend social security coverage to excluded groups through innovative policies", states Giuliano. In Africa, where there is a very large and diverse informal economy, special systems must be developed.

Moreover, a large segment of the population does not have the means to contribute to social security. According to the report Decent work for Africa's development, presented at the end of 2003 by ILO Director-General Juan Somavia, over 300 million people in Africa live in extreme poverty on US$1 a day or less.

Micro-insurance systems are innovative methods that are being considered to extend coverage to those with few resources. This is part of the Strategies and Tools against social Exclusion and Poverty (STEP) programme, which also has the support of the Government of Portugal.

"Governments have the will to find ways to extend coverage, but it is always very difficult in the beginning", states Giuliano.

All the PALOP countries face social exclusion problems that are reflected in a high incidence of poverty. In countries such as Angola and Mozambique, which also have the largest populations, the difficulties are exacerbated by the consequences of armed conflicts that damage the essentially rural economies, and cause the displacement of large numbers of people.

The Poverty Reduction Strategy Paper for Angola shows that 68 per cent of the population is poor, and the objective is to halve this percentage by 2015. Moreover, urban unemployment is as high as 46 per cent.

The launch of the Global Campaign on Social Security and Coverage for All for the PALOP countries in Maputo will be followed by other launches in Africa – in Dakar and Kinshasa.

In the framework of the Global Campaign, the ILO has indicated that barely 20 per cent of the world's workers have access to adequate social security.

For more information on the Global Campaign on Social Security and Coverage for All, see: www.ilo.org/english/protection/socsec/pol/campagne/index.htm

For more information on social inclusion in the PALOP countries, see www.inclusao-palop.org/index.htm.

To consult the report Decent Work for Africa's Development see: www.ilo.org/english/standards/relm/rgmeet/10afrm/dg-rep2.pdf