Nssa lays informal sector game plan
THE National Social Security Authority (Nssa) says there is need to craft relevant legal instruments to attract the informal sector into its social security schemes.
Nssa director for social security Shepherd Muperi told delegates during a recent safety and health at workplace annual conference that the authority was likely to face challenges to attract the informal sector.
Some of the problems, he said, include inadequate capacity to contribute, lack of stable incomes, high labour mobility and low compliance levels.
“The other challenge is a constraining legal framework that excludes the informal sector,” Muperi said.
“We need to simplify our legislation like we have seen in other countries, particularly Uruguay, to accommodate the informal sector into our schemes. There is also the issue of complex and burdensome procedures which may discourage the informal sector to register in social protection programmes.”
He said inadequate capacity to contribute to social security schemes could be overcome by making it flexible for the informal sector to join in. In Rwanda, Brazil and Uruguay, this hurdle has been solved by allowing informal sector dealers to contribute as and when they get the money.
Under the strategy, farmers can be allowed to contribute annually, after selling their produce.
Muperi said in Brazil social security coverage was extended to the informal sector by recognising their capacities and the seasonality of their incomes.
In Rwanda, the government collaborated with mobile telecoms companies to achieve huge coverage and offered subsidies, leading to an increase in coverage of between 6% and 30%.
A wide network of agents, including banks, weighed in to make this happen, he noted.
Muperi said there was a need to introduce flexible contribution modalities and frequencies, provide infrastructure to improve production capacity and introduce incentives, such as access to loans to the informal sector.
“Zimbabwe, like many other African countries, faces the problem of social security exclusion, resulting in a vast majority of its population being left vulnerable and exposed to poverty,” he said.
“Lack of protection of such workers is a significant obstacle to achieving SDGs of ending poverty, ensuring healthy lives; promoting the wellbeing of the people; achieving gender equality and empowering women and girls; and promoting sustained, inclusive and sustainable economic growth.”
About 1,8 million workers have fallen out of the Nssa pension scheme in the past few years, with authorities blaming Zimbabwe’s industrial carnage for the crisis.
At its peak, the state-run compulsory pension scheme managed 3,2 million active accounts and the absence of insurance cover traps people in endless poverty and leads to social exclusion.
While many have entered the hugely expanding informal sector now estimated to be controlling 60% of Zimbabwe’s economy, millions more have been hounded out of the country by the blazing economic crisis.
Nssa is worried about high levels of social security exclusion, and the implication on future generations.
The authority is working with the International Labour Organisation (ILO) to track down an estimated 5,7 million people in the informal sector to encourage them to sign up for the pension scheme.