Social Protection in Namibia – Moving

Towards Comprehensive Social Protection

Marius Olivier, Extraordinary Professor, Faculty of Law, Northwest University; Director: Institute for Social Law and Policy (ISLP); Presentation: 1st Namibia Social Protection Conference 2015:

“Towards Comprehensive Social Protection For All” – 7-9 July 2015

Contents Comprehensive social protection: a social security

perspective Context informing social protection responses Issues of coverage Prevention and integration Governance issues

◦ General ◦ Institutional fragmentation, duplication and coordination◦ Good governance principles◦ Administration costs◦ Legal framework◦ Dispute resolution/adjudication

Conclusions and recommendations

Comprehensive SP could, with reference to social security, be viewed in terms of -

◦ Personal sphere of coverage (who are covered/uncovered)

◦ Quality of coverage (with reference to nature, quantity and level of benefits)

◦ The inter-relationship between social security and related SP components, including the labour market, trade and industrial policies, economic growth)

Comprehensive social protection: a social security

perspective

Of core importance in this regard are:◦ The multi-dimensional nature and role of social security –

emphasising that social security is in the first place about prevention, then integration and only, where needed, compensation

◦ Role of social security in terms of poverty – namely to address, minimise and prevent poverty

But these roles of social security are not the exclusive or in fact primarily the task/domain of social security: Social security is not replacing the State’s primary responsibility in this regard

Importantly, comprehensiveness is influenced by a host of considerations, including labour market structure and composition, financial considerations, and governance principles

Comprehensive social protection: a social security perspective

Namibia = an upper middle-income country

GDP growth rate of about 4% per year

Poverty indicators:◦ Impressive progress with poverty decline: from 69.3%

(1993/1994) to 28.7% in 2009/2010◦ Yet, poverty levels remain high – e.g., 34% of all children remain

poor (poverty line: $1.25 per day)

HDI (Human Development Index) ranking (128 out of 187 countries) (2012) (informed partly by progress in the following areas: life expectance at birth; years of schooling; increase of GNI per capita by about 45% between 1980 and 2012)

Context informing social protection responses

Inequality: extraordinarily high Gini coefficient of about 0.60 (see Botswana and South Africa)

Unemployment (some conflictual evidence):◦ Little below 20% on the narrow unemployment

definition; below 30% on the broad definition◦ Primarily of a structural nature: long-term

mismatch between demand and supply of labour

◦ Youth unemployment rate: 205 000 of 826 000 (24%)

Context informing social protection responses

SP benefit expenditure comprised 6.6% of GDP in 2010/2011

Context informing social protection responses

SPER Report: Compared to rest of SSA, “Namibia has a comprehensive social protection system (both in terms of risks covered and types of schemes) that plays a critical role in its economy and society.” (SPER report)

Social security comprises:◦ Social assistance benefits◦ Contributory-based social insurance benefits◦ Occupational and private retirement funds, health

insurance funds and medical aid schemes◦ Number of schemes aimed at poverty alleviation, job

creation and promoting tertiary education

Issues of coverage

Key challenges:◦ Lack of appropriate medical cover (also post-

retirement)

◦ Limited old age provision for workers – 45% of workforce without (contributory-based) pension coverage

◦ Absence of mandatory retirement and health care insurance-based system

◦ No unemployment protection for formal and informal workers

◦ No general support for poor households and children

◦ General exclusion of informal workers

Issues of coverage

Limited focus on prevention and (labour market) integration◦ Social security compensation system not currently

linked to OHS framework◦ OHS framework itself is poorly and insufficiently

regulated, and is a function spread out among several Ministries

◦ Limited and fragmented roll-out of Return-to-Work MVA fund, MoHSS, ECA

Issues of coverage

Key reforms already undertaken◦ Universalisation of the Old Age Pension◦ Establishment of SSC◦ Enhanced oversight of private markets by NAMFISA◦ Important = impact of social assistance benefits: reduced

headcount poverty by more than 30%; impact on severe poverty by an even bigger proportion – strong basis for further expansion

Key reforms foreseen◦ NPF – already foreseen in SSA◦ NMBF - already foreseen in SSA◦ UIF – study undertaken◦ Return-to-work arrangements – study undertaken

Issues of coverage

Reforms needed (non-contributory system):◦ Improving the system of child and family benefits

◦ Possible implementation of Employment Safety Net Programme (ESNP) (a community-based public works scheme that can offer a maximum of two days (16 hours) of work per week to those who are unemployed or underemployed.

◦ SPER Report: This will cost Namibia 3.2% of GDP; likely impact of this is to virtually eradicate “extreme poverty, which would fall by 14 percentage points from the pre-transfer level of 15.3%, and to a remarkable reduction in the extreme poverty gap and severity by respectively 3.9 and 1.6 points; Gini coefficient to be reduced by 7.4 points.”

◦ Other reforms: maternity benefits for those not covered? BIG?

Issues of coverage

Reforms needed (contributory system):◦ Introduction of mandatory retirement and medical care

arrangements.

◦ Extension of coverage to informal workers to be innovatively introduced, but to be supported by evidence basis.

◦ Coverage of formal workers currently excluded – i.e., those earning more than approximately N$81,000 are currently excluded from ECF.

◦ UIF framework

◦ Return-to-Work (RTW) arrangements

Issues of coverage

Considerable scope exists for strengthening the preventive and integrative elements of the social security system◦ See the remarks about OHS above

◦ Guiding framework for employment creation is provided by among others Vision 2030, NDP4, and the National Employment Policy

◦ Important developments within the framework of MoLIREC – e.g.: Employment Creation Commission Employment Services Act Labour migration perspectives

Prevention and integration

In particular, attention needs to be paid to:◦ Linking social assistance benefits to

graduation/exit, and to employment opportunities and societal integration

◦ Linking UI and RTW to employment creation, skilling/re-skilling and, where relevant, rehabilitation (clinical, occupational, vocational)

◦ Possible development later on of comprehensive national schemes which transcend the confines of risk-based schemes (e.g. in the area of disability)

Prevention and integration

A range of challenges:◦ Deficient client interaction facilities and client service

◦ Fragmented service delivery

◦ Staffing challenges – in terms of number of officials and capacity

◦ Limited ICT capability

◦ Limited HR development plan

◦ Absence of overall evaluation frameworks – there is “no routine compilation and dissemination of data on the comprehensive SP system and no regular assessment of the evidence on the extent and impact of the system, as well as its unmet needs.”

Governance issues: General

A wide array of institutional structures:1. Ministry of Gender Equality and Child Welfare2. Ministry of Health & Social Services3. Ministry of Labour, Industrial Relations &Employment

Creation4. Ministry of Poverty Eradication & Social Welfare5. Office of the Vice President (Veteran Affairs)6. Ministry of Works & Transport7. (Ministry of Finance) 8. Motor Vehicle Accident Fund 9. Social Security Commission

Institutional fragmentation, duplication and coordination

From a concrete experience perspective, knowledge across institutions and at times even within the same institution of social security activity of a concerned institutions is often absent

There is a clear need for coordination, synergies, avoidance of fragmentation and duplication – e.g. in the area of RTW

There may be a business case for a single institutional framework, at least for the contributory and non-contributory framework respectively

See the SPER Report for proposals for a higher-level SP

strategy and coordination mechanisms

Institutional fragmentation, duplication and coordination

The SSA and related legislation provides several examples of a weak governance framework – e.g.

◦ There is need for enhanced accountability of the SSC Board, EO and management

◦ Government interference and direction appears to be beyond the scope of what is regarded as acceptable governance principles

Good governance principles

SPER report: ◦ Generally, in 2006, across the SP system: administration

costs comprised a high 20% of benefits expenditure.

◦ While the administrative costs to MoLSW (and perhaps also MoGECW) of administering and delivering grants do not seem to be comparatively large, the administrative expenditures of the three social insurance funds are high.

◦ Administration costs as percentage of total expenditure (SPER report, p 176) ECF: 62.8% MSD: 41.7% MVA: 33.6%

Administration costs

Administration costs Note distinction between cost of administration

and cost of providing benefits

Some explanation for high administration costs (SPER Report, p 176):◦ “As is the case for occupational retirement funds in

Namibia, the relatively small size of these funds as well as their age could partly explain the high costs.”

◦ “In addition, social insurance funds seem to be more costly than other social protection instruments.”

Deliberate targeting of these costs is required, possibly subject to regulation and making this part of performance agreements

Administration costs

Domestic legal issues◦ Legal mandate?◦ Unified law or context-/theme-specific laws?◦ Building on article 95 of the Constitution and

strengthening the rights-base approach to social security – the status of Principles of State Policy

International and regional standards

Legal framework

Current framework International standards

◦ Distinction - internal and external components◦ Accessible dispute resolution mechanisms

paramount Innovative developments

◦ Social accountability mechanisms

Dispute resolution/adjudication

An evident need to adopt an overarching policy framework exists.

This needs to be supported by institutional streamlining, and the strengthening of a range of governance considerations.

Specific attention needs to be paid to coverage extension – to vulnerable (and left out) categories/individuals, to informal workers, and to migrant workers.

Conclusions and recommendations