Zitto na Demokrasia

Zitto na Demokrasia

Posts Tagged ‘NSSF

Saving in Poor Countries

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Saving in Poor Countries

Beyond Cows: Incentives through social security to boost saving

Zitto Kabwe, MP

Kipindi cha maswahil na majibu

The Economist (September 20th, 2014) published an article (http://www.economist.com/news/finance-and-economics/21618900-coaxing-does-more-boost-saving-compelling-beyond-cows ) with above caption except that I have replaced ‘coaxing does more to boost saving than compelling’ with reference to social security. The article says that only 18% of the adults in Middle East and Africa have an account at a formal financial institution compared to 80% in high income countries. The poor have to save more as that “would help them to pay for big or unexpected expenses, such as school fees or medical treatment. It would also boost investment and thus accelerate economic growth” The Economist argues.

The article explains about difficulties for poor people to save including lack of self discipline. As a result Commitment savings accounts (CSAS) are growing rapidly. Many poor people in countries like Tanzania join Savings and Credit Societies (SACCOS) because they want to access their cash when in need as well as getting small loans for various purposes. However there are challenges to saving by poor people, “people in poverty often need access to their cash at short notice, whether for medical emergency or to take advantage of a business opportunity” as per the study done by Nava Ashraf of Harvard University as quoted in the article. Tanzania has developed a solution to mentioned challenges by encouraging savings by poor people through social security system.

National Social Security Fund (NSSF) the largest pension fund in East Africa has introduced a scheme to cover informal sector with social protection. Wakulima scheme (peasants scheme) enroll small-holder farmers into the fund by contributing Tanzanian shillings 20,000 (US $12) monthly and members benefit from short term and long term benefits. Short term benefits includes health insurance to members and access to small credits through NSSF member’s SACCOS scheme. Long term benefits include pension after consistent contributions for 10 years and attainment of formal retirement age which is 55 in Tanzania.

Coffee peasants from Kigoma, a remote region west of Tanzania, along the shores of Lake Tanganyika, were the pioneer of the scheme in 2013. They joined through their primary cooperative society of 1500 members and paid their membership contributions six months in advance. Since 2013 coffee buying season they got cheap credit from NSSF to buy coffee beans at interest rate of 9% (previously they were paying 18% to commercial banks). The cooperative, RUMAKO paid back this loan (US$ 1million) within a year after selling their crop. Peasants enjoy health insurance and have access to credits to improve their farms and engage in other enterprising activities. This year coffee production doubled because of access to inputs like fertilizers and pestcides as well as the excitement of socially protected living. NSSF decided to rollout the scheme all over the country in 2014, targeting 400,000 small holder farmers in cooperatives.

With schemes like these and innovations taken, poor countries can build savings culture, boost investments especially in agriculture and agro processing, accelerate growth and massively reduce poverty. Innovations like these mitigate the challenges of short term needs. However governments need to do more by, for example, introducing matching, whereby when a poor person (a peasant) saves a certain amount the government match it with a third of the amount, since poor peasants don’t really retire, introduce a price stabilization insurance coverage or drought insurance. These will provide incentives to save.

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Written by zittokabwe

September 29, 2014 at 9:23 PM

HIFADHI YA JAMII KWA SEKTA ISIYO RASMI[1]

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HIFADHI YA JAMII KWA SEKTA ISIYO RASMI[1]

Zitto Kabwe[2]

Hifadhi ya Jamii ni sera ya Maendeleo. Ni sera inayolenga kuendeleza Maisha ya Watu na kuhakikisha kuwa Watu wanaofaidika na sera hiyo kutotumbukia kwenye dimbwi la Umasikini. Ni kinga dhidi ya kuporomoka kwa kipato kutokana na kifo, ulemavu au Umri. Wanazuoni wanahusisha Hifadhi ya Jamii na tafsiri ya Maendeleo ambayo inajikita kwenye uwezo (capability) ambapo maendeleo yanahakikishwa hata kama mtu hana uwezo wa kufanya kazi. Kwenye mada iliyowalishwa kuhusu uzoefu wa Ghana tumeona namna sekta ya Hifadhi ya Jamii ya Nchi hiyo ilivyoasisiwa kwa kuanzia akiba ya lazima mwaka 1960 mpaka mfumo wa pensheni mwaka 2010 kupitia Shirika la Umma lililoundwa mwaka 1972 (Social Security and National Insurance Trust – SSNIT). Tanzania ilianza mfumo wa Akiba ya Wafanyakazi mwaka 1964 kama tulivyoelezwa katika historia ya Shirika la Hifadhi ya Jamii nchini (NSSF) na kuingia kwenye mfumo wa pensheni mwaka 2001. Nchini Ghana mfumo wa kujiwekea akiba kwa hiari (voluntary scheme) umewekwa kwenye sheria zao mbali mbali. Hata hivyo, wakati asilimia 86 ya nguvu kazi ya Ghana ipo katika sekta isiyo rasmi, ushiriki wa wananchi wa nchi hiyo katika Hifadhi ya Jamii ni mdogo kwa kiwango cha 1.23% ya wanachama wote wa mifuko ya Hifadhi ya Jamii nchini humo. Kwa kuwa mada ya uzoefu wa Ghana na changamoto zake imezungumzwa tayari, tutaona ni namna gani Tanzania inaweza kupanua wigo wa Hifadhi ya Jamii kwa kuhakikisha kuwa wananchi wengi Zaidi wanafikiwa.

Katika kipindi cha miongo miwili sasa maendeleo makubwa yamefanyika katika sekta ya Hifadhi ya Jamii nchin katika sera na sheria. Hifadhi ya Jamii imetoka mifuko ya Akiba mpaka mifuko ya Pensheni. Hata hivyo kama ilivyo kwa Ghana bado Hifadhi ya Jamii kwa Tanzania ni uwanja wa Wafanyakazi wa sekta rasmi, waajiriwa wa serikali, mashirika ya umma na makampuni binafsi. Watanzania wengi waliojiajiri na walio katika sekta isiyo rasmi hawamo katika mfumo wa Hifadhi ya Jamii. Takwimu mbalimbali zinaonyesha kuwa Watanzania wengi wapo kwenye sekta isiyo rasmi. Takribani asilimia 70 wapo kwenye ukulima mdogo mdogo (vibaku kwa lugha ya Rais Mstaafu Ali Hassan Mwinyi) na wengine asilimia 10 wamejiajiri kwenye shughuli mbalimbali kama biashara ndogondogo, madini, Sanaa, michezo na uchuuzi mwingine. Watanzania wenye ajira rasmi ni sehemu ndogo sana ya nguvu kazi ya Tanzania. Ni dhahiri kuwa Hifadhi ya Jamii Tanzania inawahusu watu kiduchu sana, takribani asilimia 6 tu ya nguvu kazi ya nchi na asilimia 3 tu ya Watanzania wote. Taarifa ya Hali ya Uchumi wa Taifa ya mwaka 2013 inaonyesha kuwa wanachama wa mifuko yote ya Hifadhi ya Jamii nchini ni takribani 1.1 milioni.

Hili ni janga la Taifa. Rundo kubwa la wananchi hawachangii katika kapu la pensheni hivi sasa, hii maana yake ni kwamba huu ni mzigo mkubwa sana na usiokwepeka kwa Taifa pindi idadi ya wazee itakavyoongezeka katika kipindi cha miaka michache ijayo. Tusifumbwe na muundo wetu wa idadi ya watu hivi sasa ambapo Zaidi ya nusu ya Watanzania wana umri chini ya miaka 18 na asilimia 72 wana umri chini ya miaka 30. Hili kundi la watoto linaweza kuwa gawio (demographic dividend) iwapo tutajipanga vizuri. Tusipojipanga hili ni bomu ambalo likilipuka tutatafutana. Ipo siku itafika ambapo hili kundi la watoto halitakuwa na uwezo wa kufanya kazi tena lakini itabidi livishwe na kulishwa. Viongozi wenye maono mapana ya nchi lazima wawe na matayarisho katika masuala kama haya ya nchi. Majawabu yapo nayo ni kuhakikisha kuwa Hifadhi ya Jamii inahusisha watu wengi Zaidi kwa kuandikisha watu katika sekta isiyo rasmi na hasa wakulima na wafugaji, wavuvi na wachimbaji madini, wafanya biashara ndogondogo na wengineo. Huko ndipo pa kuelekea kama kweli tunataka kuwa na Tanzaia imara, bora na yenye neema. Hata hivyo suala hili linahitaji utashi wa kisiasa na maamuzi.

Kuna watu wanaweza kudhani kuwa jambo hili ni ndoto za alinacha. Linawezekana sio tu kwa sekta isiyo rasmi bali kila mwananchi mwenye uwezo wa kufanya kazi ataona umuhimu wa Hifadhi ya Jamii. Hata kwa nchi kama Tanzania jambo hili linawezekana. Kuna mifano kadhaa ya nchi ambazo zimefanikiwa katika jambo hili na kupiga hatua kubwa. Nchi hizi ni kama vile Korea ya Kusini, Thailand na China. Nchi ya China imepata mafanikio makubwa sana kwa kufikisha hifadhi ya jamii kwa wakulima vijijini. Serikali za nchi hizo zimeshikiriana na Mifuko ya Hifadhi ya Jamii kuhakikisha raia wao wengi wanapata ulinzi wa kijamii ili kupambana na umasikini.

Mkutano na Wakulima wa Kahawa

Mkutano na Wakulima wa Kahawa

Hapa Tanzania tumejaribu katika Mkoa wa Kigoma, Jimbo la Kigoma Kaskazini ambapo wakulima 750 wa Kahawa kupitia chama cha Ushirika cha Msingi kinachoitwa RUMAKO walijiunga na NSSF mwaka 2013 mwezi Machi. Katika mkutano huu tulishuhudia Mwenyekiti wa Ushirika huo Mzee Yahaya Mahwisa akitoa ushuhuda mbele ya Rais wa Jamhuri ya Muungano wa Tanzania ndugu Jakaya Kikwete namna RUMAKO ilivyofaidika baada ya kujiunga na hifadhi ya jamii. Hivi sasa wakulima hawa wana bima ya afya kupitia mpango wa SHIB wa NSSF, wanapata mikopo ya riba nafuu ili kununua Kahawa kwa ajili ya kuuza kwenye mnada na mikopo ya kuboresha mashamba yao na kuongeza ubora wa kahawa na hivyo mapato yao. Kutokana na mafanikio makubwa ya ya RUMAKO vyama vingine 11 vya Ushirika vya Msingi vimejiunga na NSSF katika mkoa wa Kigoma. Vilevile tumeshuhudia Shirika la NSSF likiingia makubaliano ya kikazi na Tume ya Ushirika nchini ambapo Zaidi ya wakulima 400,000 wataandikishwa kwenye mifuko ya Hifadhi ya Jamii. Vile vile tumeshuhudia wachimbaji wadogo wadogo wa madini wakijiunga na Hifadhi ya Jamii. Hatua zote hizi zinatokana na ukweli kwamba RUMAKO imewafungua macho NSSF na sasa inapasa kufungua macho mifuko mingine yote nchini na Serikali ili kufanya mapinduzi makubwa sana katika sekta ya Hifadhi ya Jamii nchini Tanzania.

Sekta ya Kilimo na Sekta ya Madini ni mwanzo mzuri kwa sababu licha ya kwamba ni sekta zisizo rasmi lakini pia ni sekta zenye historia ya kuwa na vyama vya ushirika. Kwa kuwa itakuwa ni changamoto kubwa sana kuandikisha mwanachama mmoja mmoja kwani utawala wake utakuwa mgumu sana, kuandikisha kupitia vyama vya ushirika kutasaidia kuondoa changamoto hizo. Mifuko ya Hifadhi ya Jamii ikiwafikia wakulima ni kama imelifikia Taifa zima maana wao ndio wengi na kwa kweli wakiwa na taarifa za kutosha watafurahia mipango hii. Hata hivyo maeneo mengine kama michezo yanaweza kuwa rahisi kuandikisha kwa Serikali kuweka kanuni kwamba mikataba ya wachezaji na Timu zao ni lazima iwe na kipengele cha Hifadhi ya Jamii. Hii itaondoa kabisa tatizo kubwa la wachezaji wetu hasa wa soka kuishi maisha hohe hahe baada ya kustaafu. Upande wa Sanaa pia na hasa kwa wanamuziki jambo hili linaweza kutekelezwa. Muhimu ni ni kwa mifuko ya Hifadhi ya Jamii kufikisha ujumbe huu kwa wananchi na Serikali kuweka vivutio kwa watu kuweka akiba.

Msingi wa ukuaji wa uchumi wa nchi ni akiba. Uwekezaji wa ndani unahusiana kabisa na uwekaji akiba wa nchi, ndio nadharia za uchumi zinasema. Nchi haiwezi kutegemea tu uwekaji kutoka nje kwani uhuru wa nchi unakuwa hatarini. Nchi zilizoendelea zinaita mitaji kutoka nje kwa sababu tayari mitaji ya ndani imezidiwa. Sisi Tanzania mitaji ya ndani wala hatuna mipango nayo. Hivyo Serikali yeyote makini ni lazima ihamasishe wananchi wake kuweka akiba ili kutumia akiba hiyo kuongeza uzalishaji wa ndani na kuondoa umasikini. Hifadhi ya Jamii ni jawabu la kukuza utamaduni wa kuweka akiba na kutumia akiba hiyo kuwekeza katika sekta zinazokuza ajira na kuchochea uchumi kukua. Kwa wakulima, mifuko ya Hifadhi ya Jamii inaweza;

–  Kuandikisha kwenye Hifadhi ya Jamii wakulima ambapo watakuwa wamehamasishwa kujiunga kupitia vyama vya msingi vya ushirika. Vivo hivyo hili linawezekana kwa wafugaji na wavuvi. Wachimbaji wadogo wadogo wa madini na pia wafanyabiashara wadogo kupitia vyama vyao wanaweza kuandikishwa pia.

–   Michango kwenye mifuko ambapo wakulima watachangia kulingana na kipato chao kwa kuweka kiwango cha chini kabisa cha mfanyakazi. Kwa kuwa mapato ya wakulima ni ya msimu mifuko itaweka mfumo ambao wakulima watachangia baada ya mavuno yao mara moja. Hata hivyo, kivutio cha Serikali kinatakiwa ili mfumo huu kufikia watu wengi Zaidi. Kwa mfano kama kima cha chini ni shs 20,000 kwa mwezi, basi Serikali itachangia shilingi 10,000 na Mkulima tshs 10,000. Hili linawezekana pia kwa wafugaji, wavuvi na hata wafanyabiashara ndogo ndogo. Iwapo Serikali itaweka kivutio hiki, utamaduni wa kuweka akiba nchini utaongezeka sana na Taifa linaweza kutumia sehemu ya akiba hiyo kufanya uwekezaji katika maeneo yatakayokuza tija kwenye kilimo, kwa mfano uwekezaji kwenye viwanda vya mbolea, viwanda vya kuongeza thamani kwenye mazao na hata mikopo kwa wakulima yenye kuwaongezea kipato na hata kuboresha mashamba yao.

–    Mafao ya wakulima aghalabu hayawi sawa na mafao ya wafanyakazi. Baadhi ya mafao kama Bima ya Afya yatafaidisha wakulima na wafanyakazi. Kwa mfumo wa sasa iwapo Wakulima milioni moja tu watajiunga na Hifadhi ya Jamii, watanzania milioni sita watakuwa wamefadika na Bima ya Afya. Hayo ni mapinduzi makubwa. Taifa linataka nini Zaidi ya kuwa na watu wenye afya? Gharama ya Afya kwa wananchi inaongezeka sana na wananchi wengi wakiwa na Hifadhi ya Jamii tutakuwa tumeondoa mzigo huu kwao na hata kwa Serikali.

Wakulima na hata wafugaji wana changamoto zao. Kwa mfano ukame ukitokea wanashindwa kupata mavuno na hivyo kuingia kwenye dimbwi la umasini kwa sababu wanakosa ‘coverage’. Hasara za namna hii sasa zinaonekana kama ni agenda ya kimaendeleo (see World Bank- World Development Report- Risk and Opportunities, Managing Risk for Development, 2014). Ushahidi wa kisayansi unaonyesha kuwa wakulima na wafugaji wakiwa na uhakika wa kutoathiriwa na matendo kama ukame nk huwa wanafanya kazi kwa bidii na jamii kupata maendeleo endelevu. Hifadhi ya Jamii ina majawabu kwa masuala haya kwa kuwa na sera zifuatazo:

Bima ya Ukame/Mvua ambapo wakulima wataweza kufidiwa iwapo kukitokea ukame uatakaoharibu mazao yao au mvua kubwa yenye madhara kama hayo. Sehemu ya mchango wa mwanachama kwenye mfuko wa Hifadhi ya Jamii inaweza kuwekwa pembeni kununulia bima hiyo. Mfuko wa Hifadhi ya Jamii unaweza kuingia makubaliano na makampuni ya Bima kufanya kazi hii. Tunaweza kujifunza Zaidi eneo hili kutoka nchi za Ghana na India ambazo zimeanza skimu za namna hii.

Mfuko wa Bei ambapo wakulima wanaathirika sana na kupanda na kushuka kwa bei za mazao yao. Hivyo fao hili linaweza kuwekwa katika moja ya mafao ambayo wakulima watapata kwa kujiunga na mifuko ya Hifadhi ya Jamii. Katika mfumo wa namna hii wakulima watalima Zaidi kwani wana uhakika kuwa hata bei zikishuka sana kwenye soko la dunia angalau gharama zao za uzalishaji zitarudi kwa kupitia fao hili. Serikali kupitia Wizara ya Kilimo imetangaza kuanzisha ‘Stabilization fund’ kuchukua nafasi ya mbolea ya ruzuku baada ya mfumo huo kugubikwa na ufisadi wa kutisha ambapo katika ruzuku za tshs 584 bilioni zilizotolewa kati ya mwaka 2008/2009 na 2012/2013 ni asilimia 40 tu ndio iliwafikia walengwa na asilimia 60 ililiwa na wajanja wachache haswa mawakala wa mbolea na viongozi wa vijiji. Badala ya Serikali kuweka fedha huko ni vema ikubaliane kuchangia katika michango ya wakulima watakaojiunga na mifuko ya Hifadhi ya Jamii na kauchia mifuko kuwa na ‘Fao la Bei’. Ninashauri Wananchi wote kukataa Fedha za umma kupelekwa kwenye miradi ya majaribio ambayo inatufanya kuongeza Deni la Taifa na badala yake tuisukume serikali kuchangia katika Michango ya wakulima (matching) na hivyo kuongeza uwekezaji wa akiba nchini. Mifuko ya Hifadhi ya jamii itasimamia vizuri zaidi ‘price stabilization fund’ kama ‘Fao la Bei’ kuliko Serikali kwa kufanya uwekezaji makini wenye kulipa (good returns) tena kwenye kuboresha miundombinu ya kilimo, uongezaji wa thamani wa mazao yetu na uboreshwaji wa masoko.

Hifadhi ya Jamii kwa sekta isiyo rasmi, na hapa nimeonyesha kwa wakulima, inawezekana. Hifadhi ya Jamii ni suala la kimaendeleo na ni moja ya dawa ya kuondokana na umasikini ambayo hatukuwa tumeitilia maanani. Jambo bora Zaidi kuliko yote ni kuwa suala hili hatuletewi na wazungu bali ni mawazo yetu wenyewe ya kuhakikisha watu wetu wanakuwa na maendeleo na umasikini unaondoshwa. Hifadhi ya Jamii ni kidonge dhidi ya ufukara na ufukarishwaji. Wito kwangu kwa mifuko yote ya Hifadhi ya Jamii ni kuweka skimu za kuwafikia watu walio kwenye sekta isiyo rasmi na kuweka mafao yanayoendana na hali halisi zao. Wito wangu kwa Serikali ni kuweka vivutio kwa wananchi ili waweze kuweka akiba. Mpango wa kuanzisha ‘price stabilization fund’ uliotangazwa na Serikali hivi majuzi Bungeni wakati wa Bajeti ya Wizara ya Kilimo ubadilishwe na kuwa ‘matching’ ya Serikali kwa wakulima wanaoweka akiba katika mifuko ya hifadhi ya jamii.

Nimalizie mada yangu hii kwa kurudia mapendekezo ya Kamati ya Bunge ya PAC kwa takribani miaka 3 sasa ( kabla yake POAC), kwamba hakuna haja ya kuwa na mifuko lukuki nchini. Mifuko iunganishwe na kuwa Mfuko 1 utakaohusika na watumishi wa Serikali, Mfuko 1 utakaohusika na wafanyakazi wa sekta binafsi na kwa kuwa tumeanza skimu za sekta isiyo rasmi basi zikikomaa kuwe na mfuko 1 utakaohusika na sekta isiyo rasmi. Tunaweza kwa mfano kuunganisha NSSF na PPF kuwa mfuko mmoja kwa sekta binafsi, LAPF na PSPF kuwa mfuko wa sekta ya umma na GEPF kujikita kwenye sekta isiyo rasmi.

Vile vile nadhani ni vema badala ya mifuko kuendesha Bima zao za Afya basi zikasimu uendeshaji huo kwa Mfuko wa Bima ya Afya kwa kuchangia kile kiasi ambacho wataalamu wa actuarials wanaonesha kinapaswa kutumika kwa gharama za afya. Hii itaondoa tatizo lililopo la wanachama kuchangia mara mbili kwa gharama za Afya.

Asanteni kunisikiliza

[1] Mada iliyowasilishwa katika Mkutano Mkuu wa Shirika la Hifadhi ya Jamii Tanzania (NSSF) jijini Arusha 13 -15 Mei 2014.

[2] Mwenyekiti wa Kamati ya Bunge ya Hesabu za Serikali na Mbunge wa Kigoma Kaskazini

 

Written by zittokabwe

May 15, 2014 at 11:23 AM

CONCEPT NOTE: Extending Social Security to the Excluded

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Social security is a development policy. It is a policy that aims at improving and maintaining people’s living standards. It is protection against declining living standards due to failure to earn income as a result of death, disability, and/or age (elderly group).  Scholars have linked social security to Amartya Sen’s definition of development, which focuses on capability. In that respect, social security ensures development even in the absence of capability to work.

Over the last two decades, big strides have been made on social security policy in Tanzania. The government expanded the social security policy from the mere provident fund to pensions and benefits. Nevertheless, social security in Tanzania is still limited to formal employed people mainly civil servants. The self-employed and those who work in informal sectors are excluded. This means majority of Tanzanians are not covered in social security. About 70% of Tanzania works in informal sector in particular small-scale farming. Another 10% or so are self-employed. Citizens with formal employment belong to the smallest percentage of Tanzania’s population. In that light, it is evident that the social security in Tanzania covers the smallest percentage of population. Statistics show that only 6% of Tanzanians are covered in the social security schemes.

This is a national disaster. The majority of the citizens do not contribute anything to the pension pool at the moment. This means an inevitable burden to the nation. At one point in their lives, this group of citizens (about 90%) will not be able to work or produce but they will consume- how will we, as a nation, manage? This is the urgent question that needs a quick answer. The answer is simple- extending social security to all – BUT it needs revisiting of our policies, political will, and prompt actions.

One of the plus point is that extension social security to informal sectors and ultimately to every citizen is not utopia. It is possible. Even for a developing country like Tanzania. We have examples of countries that have managed to do so. These include South Korea, Thailand, and China. China has managed to extend social security to farmers in rural areas.  The government of those countries worked together with the social security schemes to extend the policy to every citizen.  In Tanzania, a pilot test of extending social security to farmers has been successfully done. In Kigoma, 750 members of RUMAKO- an agriculture cooperative union- have enrolled in social security scheme. These members have been contributing to NSSF for about 6 months now and are already enjoying the benefits such as health insurance and agriculture loans. In an unfortunate event of death or permanent disability and incapability to work, they will earn more or less same income from the pool because they are covered.  The RUMAKO model can be improved and expanded to other areas in the country.

Since the biggest percentage of our population composes of farmers, the feasible step is to start extending social security to farmers. This is practical. It can be done through existing cooperatives in rural areas. There are ways to do so and the benefits are invaluable. Below is the list of practicalities of extending social security to farmers in Tanzania and the subsequent benefits:

–          Enrolling to social security- farmers to be mobilized and organized under the umbrella of existing cooperatives/associations and sensitize to enroll to the social security scheme.

–          Contribution to social security- each farmer to be contributing at least the minimum contribution to the social scheme. Since farmers’ income is seasonal, the schemes will design a system of collective contribution in the immediate post-harvest/selling season.  In addition, as farmers might still find it difficult to contribute due to low-income earnings, it is proposed that the government subsidies towards the contribution. For example, the government can pay half of the contribution and the farmer pays half. This is a fair just the way formally employed are subsidized (under the statutory law and Labour Relations Act, 2004) by their employers. Lessons learnt from the countries that have managed to extend social security to informal sector are that the government intervention and subsidy is a must.

–          Benefits – extending social security to farmers, means extending benefits to a large portion of population. The benefits include health insurance to the principal member and his family. This is a great step towards a healthy nation.  Access to healthcare is key to any economic development.

–          Investment and promotion of saving culture- social security is an investment. The investment is created out of savings. The money that is collected and saved in the pool is further invested to ensure wider risk management.

–          Risk management as a crucial development policy. The World Bank and other development stakeholders have recognized and are now putting forward risk management as a development agenda (see World Bank- World Development Report- Risk and Opportunities, Managing Risk for Development, 2014). Evidence shows that risk management is one of the key variables to ensure sustainable development. Uncertainties brought about by issues such as climate change have to be dealt with prior to their happenings.  In our context, here is what is proposed with regards to risk management:

  1. Draught Insurance/Rainfall insurance- since most of the farmers in Tanzania are small-scale and depend on rain for agriculture production, it is crucial that draught insurance be one of their social security benefits.  A portion of members’ contribution will be set aside as premium for the insurance.  The social security scheme will outsource the insurance to a private company to ensure repayments and sustainability. More lessons on rainfall insurance can be learnt from India and Ghana.
  2. Stabilization fund. This is another benefit that has to be included in the benefit package for farmers. Stabilization fund assures constant minimum price for the produce. With this system, farmers are encouraged to produce more because of the price assurance. The government and the farmer contribute to the fund. Lessons can be learnt from previous stabilization fund in KNCU and also from the EU CAP (Common Agriculture policy).

Noteworthy, the above two points will ensure sustainability of social security to farmers. This is because in time farmers will be in a good condition due to compensation from draught insurance, stabilization fund, and low health costs.

All in all, social security to farmers is, arguably, one of the feasible and sustainable solutions towards fighting rural poverty in Tanzania.  The genius of it is that it’s a homegrown and ‘do it yourself’ solution. It is not donor dependant.

Written by zittokabwe

February 11, 2014 at 6:02 PM

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