Through strategic partnerships and modern information and communications (ICT) solutions, member institutions of the International Social Security Association (ISSA) are strengthening the scope, extent, and adequacy of social security coverage.
Across Africa, the quasi totality of countries has social security schemes and/or programmes theoretically covering most of the population. The policy discourse on extending social security coverage during the last decades culminates in the enactment of new legislation to expand the scope of coverage and reforms on existing schemes to include initially precluded population groups such as informal and own account workers to participate voluntarily under mandatory social security programmes.
However, the effective extension of coverage remains a perennial challenge due to the disconnection between programme design and the socio-economic realities of the most vulnerable clusters of society. In a predominantly informal and agrarian economy setting, working age population groups lack both the locus standi and financial capability to actively participate in mandatory contributory social insurance programmes. Coupled with less than adequate investment in social assistance and essential and universal health care programmes, Africa remains the continent with the lowest effective social security coverage rates across the globe.
The International Labour Organization (ILO, 2021) estimates show that only 17.4 percent of Africa's population has effective access to at least one form of social protection benefit. These rates vary across countries and branches of social security with exceptional countries such as Botswana, Cabo Verde, Eswatini, Lesotho, Mauritius, Namibia, Seychelles, and South Africa having attained universal old-age pension coverage through the complementary use of contributory and non-contributory financing. Furthermore, the International Social Security Association (ISSA) has documented how coverage varies depending on the branches and the population groups (ISSA, 2021).
Social security is not just a fundamental human right. It is a first choice with a huge socio‑economic potential for individuals and society. The effective extension of social security is an outcome of good programme design, adequate and sustainable financing, and the administrative capability to enforce social security legislation. This is to say that while programme design and financing strategy play a fundamental role in determining potential coverage rates, administrative capability to reach, register, collect contributions, as well as deliver benefits and services determine effective extension of coverage.
In the face of the dual challenge of addressing informality and extending social security coverage, enhancing the administrative capability of social security institutions remains crucial. To respond to this necessity, ISSA member institutions are leveraging strategic partnerships and modern information and communications (ICT) solutions to enhance their administrative capability, improve efficacy and foster efficiency in administering and delivering benefits and services to the ever-increasing number of persons living in multi-dimensional deprivation and poverty. This article chronicles measures recorded during the ISSA Good Practice Award competition for Africa 2020 by looking at policy and administrative considerations in extending social security coverage.
Policy and administrative considerations in extending social security coverage
Extending social security coverage is tri-dimensional – scope, extent, and adequacy. While the scope and adequacy of coverage are dependent on the policy and legislation defining the covered population and contingencies, financing strategy, eligibility conditions, benefit duration, insurable earnings, and benefits formula – for contributory programmes, and benefit amount – for non‑contributory programmes, the extent of coverage is an outcome of administrative capability. The figure below paints a picture of the interplay and requirements for the effective extension of coverage.
Over and above programme design and policy considerations, social security institutions are essentially public service providers. In implementing social protection legislation, they either leverage pre-existing solutions or champion the course for innovation resulting in the development of public service tools and infrastructure alongside the fulfilment of their duty to administer and deliver social security protection to all.
A typical example is the putting in place of social registries by social security institutions, which in turn serve as a reference source for national identification. Alternatively, social protection administrations can rely on national databases to identify and enrol potential beneficiaries/contributors into social protection programmes.
Logically speaking, lower than potential coverage rates in social protection programmes are characterised by three main factors namely – exclusion, informality and non-compliance as well as lack of effective access to benefits and services. The inability of social security institutions to reach out to and sensitise, identify and register potential beneficiaries or contributors generally results in the exclusion of theoretically covered individuals and/or population groups with the resultant effects of low coverage rates.
Additionally, the inability to enforce compliance and recover contributions in a predominantly informal economy setting culminates in gaps between global and effective coverage rates for contributory social security programmes. Ineffective access to benefits and services erodes the potency of social protection policies and/or programmes.
The focus of ISSA member institutions in Africa has been to leverage strategic partnerships and modern ICT solutions to improve their administrative capability thereby boosting efficacy and enhancing efficiency in administering and extending social security coverage to the vulnerable and eligible yet uncovered population groups as detailed below.
Exclusion is a fundamental driver of low social security coverage rates in Africa. Exclusion emanates from both policy/programme design and implementation lapses. In essence, social protection programmes in countries across the continent are targeted with exceptional cases of truly universal health care programmes in countries like Mauritius. For instance, universal social pensions are targeted to the elderly; universal child benefits are targeted to children while mandatory social insurance programmes are targeted to formal employees. More so, voluntary insurance programmes are implicitly targeted to individuals and/or groups with a capacity to contribute.
Besides exclusion stemming from programme design, implementation lapses result in exclusion in the form of exclusion errors especially with non-contributory, means tested, conditional and/or poverty-targeted programmes. Exclusion equally results from inability of social security institutions to reach out to and register theoretically covered persons and/or population groups due to administrative and infrastructural constraints to access enclaved and geographically distant vicinities. In the face of these challenges, ISSA member institutions in Africa are committed to address these issues.
For instance, to tackle the problem of low social security coverage rates – estimated at less than 20 percent – and the predominance of informal employment in Kenya, the Local Authorities Pension Trust (LAPTRUST carried out a digital marketing campaign to bring knowledge of existing social security regulation and extend coverage to the informal sector. The campaign dubbed Eneza Pensheni – the Swahili equivalence of Spread Pension capitalised on the high mobile phone network and internet penetration to create mobile applications through which the scheme reached out to the so-called difficult-to-cover groups constituting much of the informal economy (Local Authorities Pension Trust, 2020a).
In the Seychelles, the Seychelles Pension Fund (SPF) employed aspects of consumer behaviour to strategically extend social security coverage beyond statutorily covered population groups through the voluntary contribution starter gift vouchers programme. The programme aimed at identifying mechanisms through which existing contributors and/or retirees could influence the behaviour of potential contributors to take-up the voluntary insurance product administered by the SPF.
Recognising the importance of social security and capitalising of behavioural patterns of the population towards specific events and dates like Christmas, Valentine’s Day, Mother’s Day and Woman’s Day, the schemes designed a gift voucher through which an insured person could offer a Voluntary Contribution Starter Pack as a gift to a loved one. The programme has been expanded to include other special events and dates like birthdays for insured persons to register loved ones under the voluntary insurance programme and commit to the payment of contributions through salary deductions effected by their employers and paid over to the SPF (Seychelles Pension Fund, 2020a). The voluntary contribution starter gift vouchers programme extends coverage to individuals with low capacity to contribute through the goodwill of loved ones in productive employment thereby curbing the incidence of exclusion.
The Seychelles Pension Scheme is equally committed to minimising the incidence of exclusion by vulgarising knowledge on social security through communication and sensitisation campaigns, thereby securing the loyalty of members and would be members. For instance, the Protecting you: Informal sector campaign has enabled the scheme to engage with fishermen at their natural settings, employing various strategies including partnering with the association of boat owners to encourage fishermen to contribute to the SPF in preparation of their retirement. These sensitisation campaigns grouping fishermen from the fishing communities of all three main Islands were relayed on national media for maximum publicity and culminated in new registrations and/or repayment of lost contribution periods (Seychelles Pension Fund, 2020b).
On a more holistic communication level, the SPF produced Educational cartoon strips broadcast on national media to bring social security knowledge to the general public. The cartoon strips are a low cost – high impact platform for the scheme to engage directly and provide first-hand information, establish a more conducive relationship, and build trust with members and avert misinformation. Thus, bringing about greater outreach with far-reaching impacts on combating exclusion (Seychelles Pension Fund, 2020c).
While social security institutions seek to reach, register, and administer social security programmes to protect persons belonging to difficult-to-cover population groups as well as living in geographically distant regions through the strategic use of modern ICT solutions, they are confronted with a more complex phenomenon of widespread economic informality with far-reaching impacts on adherence and compliance rates.
Combating informality and enhancing compliance
Besides exclusion by design and/or implementation gaps, widespread economic informality is a major obstacle to the extension of coverage in developing and developed countries alike. In general, economic informality has a negative toll on compliance rates and favours evasion and fraud in both taxes and social security contributions (Mineva and Stefanov, 2018).
High levels of economic informality generally translate to high levels of informal and precarious employment. This limits the enforceability of social security legislation and favours non-adherance and/or non-compliance. For instance, employers may deliberately ignore the provisions of social security legislation to declare and register employees for social security purposes due to high levels of economic informality. Alternatively, they can manipulate workers’ status from employees to service providers, especially in the case of platform workers, own account and/or family work. Thus, they can illegally avail themselves from the duty to comply with the declaration, registration, and payment of social security contributions with far-reaching consequences on coverage rates.
Informality has multi-faceted negative impacts on social security systems. These range from barriers to access for defined population groups resulting to a loss in coverage potential in the form of lower coverage rates and lost contribution income, to the negative socio-political and economic impacts on social security systems. The inability of schemes to identify, register and enforce compliance with the collection of contributions from all statutorily covered persons and/or population groups leads to the successful evasion of and fraud in social security contributions.
In responding to the challenges of informality and non-compliance, the National Social Security Fund (Caisse nationale de sécurité sociale – CNSS) – Tunisia launched the Protège-moi (Protect Me) programme through a partnership with the ministries of Social Affairs, Women, Agriculture and Communication Technologies; a telecommunications provider (TT); and a private tech start-up. The goal of the programme was to extend social security coverage to rural women working in the agricultural sector. It brought about the amendment of the social security legislation to incorporate temporary and seasonal workers in the agricultural sector alongside more flexible arrangements for the payment of contributions (National Social Security Fund, 2020).
The experience of the CNSS epitomises how social security administrations can drive legislative amendments to extend coverage to most of the population and leverage technology to reach out to, register potential insured persons and collect social security contributions from the so-called difficult-to-cover groups. Nevertheless, introducing voluntary insurance in settings characterized by widespread informality, precarious employment, deficient capacity to contribute and so on. in lieu of measures to promote formal employment and mandatory insurance cannot guarantee the effective extension of coverage due to high risks of default with the payment of contributions.
Strategic partnerships and the use of modern ICT solutions prove to be of high importance in this respect. In Mali for instance, the National Social Insurance Institute (Institut national de prévoyance sociale – INPS) managed their voluntary insurance in partnership with a private company under the Social inclusion project: SAER-EMPLOI-AV+. This project was designed and implemented in response to the problem of lack of awareness among self-employed workers, informal workers, and employees of the liberal professions of the existence of social security coverage combined with rigid eligibility criteria (National Social Insurance Institute, 2020).
It entailed communication campaigns to raise awareness among target population groups. Simplifying the registration process and offering terms with the payment of contributions, the use of electronic payment methods (e-banking, Orange-money, Mobicash, etc.), as well as the spreading of payments (by day, week, month) to lessen the financial burden. A major innovative component of the SAER-EMPLOI-AV+ is that it is global, covering Malians across the globe. As at now, it is fully operational in cross-border destinations such as Côte d’Ivoire, Ghana and Cameroon (Douala) with a high concentration of migrant Malians, thus providing social security protection at home based on economic gains in foreign countries (National Social Insurance Institute, 2020).
In a similar development, the Local Authorities Pension Trust (LAPTRUST) – Kenya leveraged its strategic partnerships to extend pension coverage and enhance compliance in the informal sector through the Save As You Spend initiative. The operationalisation of the initiative required the set-up of an individual pension plan – Mpension initially targeting the informal sector. It leverages the services of a leading bank and a large telecommunication service provider in the country to register contributors by dialling a USSD number to effect contributions through the mobile payment wallet (Local Authorities Pension Trust, 2020b).
The system is designed to explore the spending patterns of individual contributor(s), based on which it effects micro auto deductions equivalent to a proportion of actual money spent which is credited into individual pension wallet (account). The solution addresses the inherent lack of discipline in pension savings whilst ensuring a balance between immediate and future needs of an individual. This promotes the effective participation of informal employees under the contributory pension scheme(s) with far-reaching impacts on the effective extension of coverage.
Improving access to information, benefits and services
As stated above, social security institutions are public service providers with a core mandate to collect social security contributions and deliver social security benefits and services in a timely and consistent manner. Prior to the adoption of ICT solutions and commitment to strategic partnerships, the administrative processes of collecting declarations and contributions, receiving, and managing claims were handled manually leading to longer waiting times before the award of benefits. More so, the orthodox practice of onsite and direct delivery of benefits/services by social security institutions resulted into extensively long queues with elastic queuing time for beneficiaries and other users of social security services.
By default, social protection programmes play a fundamental role in income provision and replacement, implying that they should be able to smoothen income flows when contingencies fall due. However, this is rarely the case as waiting time generally exceed the standard period for the payment of salaries and wages – 30 days. For instance, the Conférence interafricaine de la prévoyance sociale (CIPRES) rules recommend 45 days for the treatment of pension files. This implies that potential pensioners or survivors without alternative income sources are bound to fall into poverty pending the maturation of their claims. Unfortunately, this can push potential beneficiaries to commit to high interest loans from banks and microfinance institutions or risky loans from unregulated financial dealers with the hypothecation of future pension entitlements to gain income smoothening loans.
Notwithstanding, important progress was recorded by introducing one-stop-shops, decentralising the reception and treatment of claims as well deconcentrating payment and service delivery points through the creation of multiple service desks. This morphed into the generalised externalisation of contribution collection and payment operations through banks and other financial institutions notably post offices and microfinance institutions collecting social security contributions and/or paying benefits in a good number of African countries. However, administrative bottlenecks, operational constraints as well as the multiplicity and diversity of the clientele of these institutions leave pensioners to brace the same odds of queuing at service points with a continuous decline of service quality.
Responding to the quest for continuous improvement for greater efficacy and efficiency, social security administrations have embraced new and modern ICT solutions to build strategic partnerships in administering schemes and programmes thus improving effective access to benefits in a timely and consistent manner. These include but not limited to Saving costs through a mobile wallet for pensioners introduced by the Local Authorities Pension Trust – Kenya (Local Authorities Pension Trust, 2020c). The online payment of social contributions introduced by the National Social Insurance Fund (Caisse nationale de prévoyance sociale – CNPS) – Cameroon (National Social Insurance Fund, 2020) as well as the generalised automation of core business processes by social security institutions in countries across the continent.
Strategic partnerships and the use of modern ICT solutions equally afford avenues for social security administration to maintain a continuous stream of information to different stakeholders, thereby reinforcing loyalty of contributors, beneficiaries as well as establish connections with potential contributors. In the Seychelles, the Seychelles Pension Fund is bound by the provisions of the regulation in force to provide an annual statement of the member’s contribution to each member. This generates huge volumes of work for the scheme coupled with the risks of inaccuracies in contributors’ addresses due to change of employment as well as likelihood of non-transmission of account statements by employers – acting as intermediaries, to employees.
In fulfilling its duty, the scheme developed the Pension e-service for the systematic update and direct consultation of account statements by members. Management took advantage of the high internet penetration in the country to develop and incorporate the Pension e-service application on the website of the scheme for registration and easy consultation of account statements by members. Thus, enhancing effectiveness and efficiency in the delivery of account statements to members (Seychelles Pension Fund, 2020d). Modern ICT solutions equally play a crucial role in service delivery thus improving effective access to benefits and services.
African countries have recorded impressive progress in expanding the scope of social security coverage during the last decades. However, extending social security protection to most of the population remains a perennial challenge due to policy restrictions and shortfalls in administrative capability of social security institutions to reach out, register and administer social security protection to the ever-increasing number of persons in need of social security protection.
Coupled to widespread informality and incoherence between social protection policy/programme design, social security administrations must contend with exclusion, high levels of informality and non-compliance as well as improving access to benefits and services in the drive towards the effective extension of coverage.
Experiences of ISSA member institutions in Africa reveal that:
- The further extension of coverage is possible through the adoption of subtle measures and innovative approaches in administering social security schemes and social assistance programmes.
- With the prevailing realities, social security administrations have to contend with three fundamental challenges of extending the legal coverage to minimise the incidence of exclusion, combat informality to promote adherence and enhance compliance as well as improve access to information, benefits and services in the drive towards the effective extension of coverage.
- Strategic partnerships and modern ICT solutions play a crucial role in improving the administrative capability of social security institutions thus promoting efficacy and greater efficiency in reaching out, registering, and administering social security protection to the ever‑increasing number of people in need of social security benefits and services.
Social security is not just a fundamental human right. It is a first choice with a huge socio-economic potential for individuals and society. Despite the prevailing low coverage rates within countries and across branches of social security, the further expansion – scope, and extension – extent, of coverage is feasible. A more coherent policy/programme design and the adoption of strategic partnerships built on modern ICT solutions can enhance the administrative capability of social security institutions to reach out, register and administer social security protection to the ever-increasing number of people in need of social security protection.
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