Informal Economy

Digitalization enables 2,000 informal sector workers access social security

The ILO and the Vanuatu National Provident Fund (VNPF) have signed an implementation agreement to develop, launch and deploy digital platforms.

Project documentation | 19 October 2021
Customer service staff from the Vanuatu National Provident Fund (VNPF).
Accessing social security for all Ni-Vanuatu engaged in the informal economy is set to improve, through the deployment of three digital platforms in Vanuatu.

The International Labour Organization (ILO) and the Vanuatu National Provident Fund (VNPF) has signed an Implementation Agreement to develop, launch and deploy digital platforms. Payment gateways of the mobile phone apps of Vodafone (M-VATU), Digicel (MyCash) and Vanuatu Post Limited’s mobile wallet (Kwikpay) have been launched. Data received from M-VATU alone indicate that 2,000 Vanuatu informal sector workers have registered.
“The use of technology and digital platforms to reach out to the informal sector to enable greater and easy access to social security is an investment that will yield good outcomes, including by contributing to extending the broader social protection floor in Vanuatu”, said Matin Karimli, Director for ILO Office for Pacific Island Countries.

ILO research indicates that working in the informal sector increases puts many people at a disadvantage - particularly women, youth and persons with disabilities - as they are not able to access formal services, including those available for COVID-19 recovery. It is therefore critical to design and deploy innovative and inclusive digital platforms to ensure that no one is left behind.

“Since the launch of the digital platforms, we have promoted them widely. The VNPF team, including our partners, were in Tanna during the Agriculture Week. We now plan to roll out our community outreach in rural Efate and then in Santo”, said Mr Parmod Achary, the General Manager of VNPF.

According to the ILO supported Vanuatu Workers rapid assessment on the impact of COVID-19 and TC Harold in 2020, the share of workers employed in the informal economy was 66.9%. Informal employment among women is higher than that of men in Vanuatu, as women make up 68.7% of total informal sector workers. With the prolonged impact of COVID-19 leading to more job redundancies from the formal sector, the informal sector is predicted to inflate further.

Formal sector membership contributions for VNPF has dropped by 55-60%, compared to pre COVID-19.

According to Mr Achary, many people have moved to the informal sector, including some who are accessing seasonal work in Australia and New Zealand. In response to the increased uptake of seasonal work, VNPF is planning to open up offices in Australia and New Zealand. This will ensure services are provided to a large number of Ni-Vanuatu workers in these countries and the digital platforms will continue to be an important tool as workers are spread out in farms.

The ILO highlighted that the technical assistance provided by the ILO through the partnership with VNPF, aligns to the Vanuatu COVID-19 Recovery Strategy 2020-23, in particular, recovery Objective 2 – Enhancing lives and livelihoods.