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NSSF Bill should inspire social protection debate in Uganda

Elderly persons waiting for social protection cash

Elderly persons waiting for social protection cash

The current debate about the National Social Security Fund (NSSF) amendment bill, 2019 has attracted a lot of attention from workers in the private sector who own the Fund.

The bill is currently under review by the parliamentary committee on gender following a ruling by the Speaker of Parliament, Rt. Hon. Jacob Oulanya on the handling of incomplete bills from the 10th Parliament.

The major demand of workers is to enable them access to their funds outside the existing five eligibility criteria of age benefit, withdrawal benefit, invalidity benefit, emigration grant, survivor’s benefit contained in the NSSF Act of 1985. The cry of workers has been orchestrated by the Covid-19 pandemic, which brought eminent shock to the lives and livelihoods of many households.

Although the agitation of workers is understandable, the mandate of the Fund seems to be misconstrued in the ongoing debate. Workers and the general public expect NSSF to serve purposes that are social protection needs but are outside the mandate of NSSF.

NSSF is a provident fund and not a social security fund. A provident fund is composed of a compulsory contribution of a percentage of incomes earned by citizens, alongside an employee contribution. The fund invests the contributions, guarantees a reasonable interest rate on members’ contributions and enables access to funds for retirement or other special conditions prescribed by the law of the respective state.

On the other hand, a social security fund is a way for the young to care for the old. Money is taken from the working youths and given to the elderly with the promise that they too will get the same benefits in the future. Simply put, there is a continuous flow of money through the fund, flowing from those working to those retired.

This, however, works best with huge investment in youths, an abundance of gainful employment and a balance of age between the working youth and the retired elderly.

One should not be quick to suggest a change of name from NSSF. Changing the name is just cosmetic and cannot cure the strategic problem of shallow social protection in Uganda.

Social protection refers to policies and programs that protect the basic welfare of citizens through avoiding, reducing or mitigating poverty and vulnerability. It serves three objectives: secure and protect lives and livelihoods, ensure access to social and human capital formation services, foster and protect decent work.

Social protection instruments are grouped into three categories: First, the non-contributory social protection (social assistance instruments) such as the agricultural subsidies,  promotion and access to existing social services including education and health services, disaster mitigation and response mechanisms, the non-contributory Public Service Pension Scheme (PSP) and the Social Assistance Grants for Empowerment (SAGE).

Other non-contributory social protection modalities that the government of Uganda could consider embracing include consumer subsidies, workfare, elderly care and housing.

Second, contributory social protection (social security instruments) includes contributory pension schemes (old-age, disability or survivor’s pensions) such as NSSF, health insurance and unemployment insurance.

Third, the labour market regulation instruments such as regulation and oversight of labour standards for promoting and protecting decent work through the formalization of contracts, collective bargaining, occupational safety, minimum wage, elimination of child labour and non-discrimination policies. Uganda has a significant social protection gap regarding labour market regulation, human capital development services and welfare of informal workers and farming households.

Therefore, besides being consumed by the controversial provisions of the NSSF amendment bill, the time is ripe for legislators, civil society, government and private players to ask where we stand as a country in terms of social protection and work on comprehensive social protection system given the current Covid-19 pandemic, future shocks and uncertainties.

Members of parliament, while considering the NSSF bill for instance, should steer clear of emotions and politicking and ask themselves whether they are legislating for preventive measures, damage control or for the social and economic prosperity of the country.

The 11th Parliament, which is hardly a year, has plenty of time to legislate for posterity on the matter of social protection instead of the country waiting for another big exogenous shock to befall and nudge us to wake up and troubleshoot.

j.mugonya@cgiar.org

The writer is a consultant with the Global Research Program – Enabling Systems Transformation International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), Nairobi, Kenya

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