S OCIAL C ASH T RANSFERS IN Z AMBIA F ROM P ILOT TO N ATIONAL R OLLOUT Social Security Commission...

SOCIAL CASH TRANSFERSIN ZAMBIA

FROM PILOT TO NATIONAL ROLLOUT

Social Security Commission Namibia1st Social Protection Conference 2015, 7-9 July, Windhoek

“Towards Comprehensive Social Protection for All”Daniel Kumitz, FES Lusaka

July 09, 2015

Structure of Presentation

1. The Zambian Social Cash Transfer Programme2. SCT Evolution 2003-20153. Particular Target Groups4. Political Will5. Impact6. Outlook

Wealth and Poverty in Zambia

1. Lower Middle Income Country since 20122. Excellent Growth Rates (7-8% p.a.)3. Strong Export, Strong Foreign Direct

Investments, Weak Domestic Market4. Constraints on World Market5. 60.5% under poverty datum line6. Extreme poverty 42% (rural areas 58%)7. GINI 0.5088. Comparatively low fiscal space due to inefficient

tax regime

Social Cash Transfers in Zambia• Social Assistance Cash Transfer to destitute & incapacitated

households• ZMW 70 (USD 9.6, PPP 28) per month per household,

double for households including PWD• Currently rolled out to 50 of 104 districts in Zambia. 31

districts added in 2014 alone.• Caseload 2014 145,000 households

(target 186,000)• Spending ZMW 180,000,000 (USD 24,600,000)

(GRZ 85 %, donor 15%)• Community-based targeting• Most recipients women, often generation-gap households• Disability mainstreamed, includes disability allowance

1st Pilot 2003

• Matondo Ward, Kalomo• Relief of food insecurity among AIDS-affected

households (orphans, generation gap) following a drought and cattle disease

• 159 households• ZMK 35,000 (7 USD, 31.8 PPP), per month, per

household, equivalent to a 50kg bag of maize• Goal to provide a second meal per day

More pilots under 4 paradigms• 10% poorest (Kalomo) – “Inclusive Model”

– Also tested urban (Chipata, 2006), rural (Kazangula, 2005), with extra (soft) conditionality (Monze, 2007)

• Universal pension: elderly over 60 yrs (Katete, 2007)• Child grant: households with children under 5

(Kaputa, 2009, Kalabo, Shang’ombo 2010)• Multi-Categorical (Luwingu, Serenje, 2011)

– households with orphans (generation gap)– single mothers/child headed– households with disabilities– residual

Pledging Scale-up• Evidence from the Kalomo pilot (progressively rolled

out to the entire district) was instrumental at the AU Livingstone I conference (2006)

• There, President Mwanawasa (MMD) pledged support, his Minister of Finance deriding the programme notwithstanding

• In 2011, under President Banda (MMD) the SCT was included in the Sixth National Development Plan with rather modest target numbers

• In 2012, President Sata (PF) also promised scale-up and a comprehensive policy

Community Based Targeting

Implemented through subsidiary PWAS structure (Public Welfare Assistance Scheme), based on elected volunteers on community level

DWACACC

CWAC

DSWO

Community Welfare Assistance Committees

The CWAC is elected by the community for tenure of 3 years and is composed of (1) community members, (2) representatives from associations in the community, (3) Church representatives. The CWAC is mainly responsible for:

• Coordinating welfare programs in the respective community and mobilize community support for beneficiaries

• Helping beneficiary households to appoint a deputy and monitor the process.

• Managing changes in the household structure sure as a household head dies, when a household moves away or dissolves for any other reason

• Monitoring the payment process at pay points to verify payments and any irregularities.

• Monitoring, counselling and referrals of beneficiary households to other community service providers.

Rollout of Social Cash Transfers• 2012 JFA with CPs targets 99,000 households (with

495,000 persons = 3.9% of population)• In 2013 design choice finalized:

– Kalomo “Inclusive model” without cut-off point– Projected number of recipients higher than 10% and

estimated at 20% of rural districts– 2013 roadmap targets 408,000 by 2016 households (=

16.2% of all households)• Target 50 districts achieved in 2014• Target 2015 is 100 districts, 2016 full coverage (104

districts).

Source: MCDMCH

Targeting Review 2013

• Found very high incidence of design and implementation failures (leading to both inclusion and exclusion errors)

• Community Screening served to exclude the better off, but not to identify the poorest

• Artificial cut-off points and limited enrolment numbers exacerbated arbitrariness of selection process

• Community targeting came closest to reaching the poorest, unlike the geographical models (Child Grant, Multi-Categorical). They also found the highest acceptance by the population

• Harmonized targeting with two tier-targeting process developed and then adopted

2-tier targeting

Source: OPM

Targeting Process

Source: MCDMCH

Eligibility• Residency: 6 months in catchment area• Incapacity: the household does not have any fit-for-work

members or has a high dependency ratio (equal or greater than three). This means that there are three or more dependents per fit-for-work member. A person is considered a dependent (or unfit-for-work) if he/she is: i) younger than 19; ii) older than 64; or iii)19-64 years of age AND chronically ill or disabled.

• Welfare: the household’s estimated welfare is below a certain pre-determined threshold based on the Household Living Conditions Index in the country. Welfare levels are estimated by the Social Cash Transfer Management Information System (MIS) using information collected from households. The purpose of this criteria is to ensure that well-off households are not included in the programme.

PWD in Zambia

• 2 million PWD in Zambia (WHO estimate)• 15% of the population• PWD less likely to be employed than non-PWD• Even though most work in informal economy

as self-employed or subsistence/smallholder farmers (or as unpaid family members)!

• In 2000 80% were working in agriculture, meaning the vast majority live in poverty.

• Spending on PWD (not counting SCT) is ZMW 10m (1.36m USD) (2012)

Children & Mothers

• Maternal mortality stands at 440 deaths per 100,000 live births (2010).

• Infant mortality under 5 is 82.9 per 1000 live births, and 27.4 after birth (2011).

• Child Labour Incidence is 22.8% (LFS 2008, defined as labour children age 5-17 in either hazardous work, below minimum employment age or in work not permissible as light work).

Focus: Children & Mothers

Secondary Education not for the poor

15.8% Orphans

Old Age Poverty in Zambia

• 5.3% of the population above 55. They disproportionally head households (19.1%)

• High levels of economic activism; for example 86.4% of rural men above 65

• Illness second highest (22.6% over age 50, 23.9% age 0-4, 14.6% national average)

Poverty by household head age (LCMS 2010)

65+, rural: 83.2% poverty!

Social Pensions

• MLSS w ILO has computed following models:– Entry point: age 60+, 65+, 70+– Benefit level: K60, K80, K100– Indexation: none, CPI, GDP

• Costs for any combination found to be under 1% of GDP

• Would effectively target about 5% of the population

ILO Computation Overview of Universal Social Pension in Zambia (2021)

Not Indexed CPI Indexed GDP Per Capita Indexed

AGENumber of

Pension Recipients

Benefit Level

(Kwacha)

Nominal Cost (Kwacha)

% of GDP

Relative CPI

Purchasing Power in

2021


% of GDP

Relative CPI Purchasing

Power in 2021


% of GDP

Relative CPI

Purchasing Power in 2021

60,000 398.5 Billion 0.26% 688.9 Billion 0.46% 827.4 Billion 0.55%

60+ 553,539 80,000 531.4 Billion 0.35% 58% 918.5 Billion 0.61% 100% 1,103.2 Billion

0.73% 120%

100,000 664.2 Billion 0.44% 1,148.1 Billion 0.76% 1,379.0 Billion

0.92%


65+ 319,164 80,000 306.4 Billion 0.20% 58% 529.6 Billion 0.35% 100% 636.1 Billion 0.42% 120%



70+ 168,487 80,000 161.7 Billion 0.11% 58% 279.6 Billion 0.19% 100% 335.8 Billion 0.22% 120%


Please Note -

The figures presented are based upon calculations made on demographic and economic assumptions from the Zambian Social Budget Model. The variables used may be subject to significant variation over time, and thus these results should be treated as preliminary and illustrative.

Social Pensions Debate• World Bank study: Senior Citizens not significantly

more likely to live in poor households than the rest of the population. Only sub-categories such as generation gap are more likely to be poor and should be targeted by means-testing (SCT)

• Poverty increases with age of household heads, not per age of individuals. Similar argument with orphans, only households headed by senior citizens or single parents with orphans more likely to be poor.

• Efficiency depends on design: reduce extreme poverty (close the poverty gap), reduce poverty, provide basic needs universally? political will

United Nations

1. ILO worked with MLSS on Social Pensions (2008ff) suggesting a combination with child grants and social cash transfers

2. World Bank in 2013 suggested combination of social cash transfers with geographical targeting and public works; and to postpone social pensions until fiscal space clear. Suggested to add conditionalities to transfers.

Public Statements

1. Minister of Finance Hon. A. Chikwanda: No to handouts (Budget Speech 2012)

2. The same, poverty reduction through inclusive growth, education, agricultural productivity and employment but also including social transfers “as long as they don’t turn into handouts or create dependency” (March 2013)

3. Minister of MCDMCH Hon. J. Katema: Enough resources already in transfers to target 40% of the poor (rather than the then 2%) (March 2013)

Comparative Spending

Current Social Protection Expansion

• MLSS developing Maternity Protection (C. 183 ratification)

• Reform of the Pension Insurance System• Reform of Farm Subsidies (FISP and FSP)• New Disability Policy Framework• Nutrition Programs “First 1000 days”• Work on universal health insurance• National Rollout of Social Cash Transfers

2013 decision for rollout

• Budget allocation increased by 750% from ZMW 17,500,000 to ZMW 150,000,000

• Coincided with subsidy cuts in the same year (however, agriculture subsidy complex remains virtually intact)

• TWG concludes development of comprehensive social protection policy, which is adopted by Cabinet in 2014 and proclaimed December 2014

National Social Protection Policy (NSPP)

NSPP Framework

• “This policy therefore pioneers a paradigm shift in Social Protection implementation in Zambia. The shift is based on the Devereux and Sabates-Wheeler transformative framework that champions a more comprehensive and integrated approach to Social Protection as a tool for sustainable poverty reduction. The transformative paradigm is four dimensional, clustering initiatives under protection, prevention, promotion and transformation. These four dimensions further inform the classification of Social Protection in this policy into four definitional pillars namely: Social Assistance, Social Security/social insurance, Livelihoods & Empowerment, and Protection.”

The four Pillars of the NSPP

Social Assistance = Protective

Social Insurance = Preventive

Livelihoods & Empowerment

= Promotive

Protection = Transformative

Measures of the NSPP 1

• Social Assistance:– One-stop service centres in all districts– Integrated system of basic social protection grants– Regular, predictable transfers to chronically poor– Disaster and shock relief– Life-cycle based benefits

• Social Insurance:– Reform pension system– Establish old age grant– Universal health insurance– Develop maternity protection branch– Extend coverage to informal sector– Decentralise services– Employment of PWDs through positive discrimination of PWDs

Measures of the NSPP 2• Livelihoods and Empowerment:

– Reform and Streamline Empowerment programmes– Group-saving schemes– Access to credit– Strengthen productivity– Dietary diversification– Access to business and employment opportunities

• Protection:– Develop legislation to protect vulnerable groups– Construct places of safety– Empower victims of human rights abuses– Address harmful cultural and traditional practices– Referral systems for GBV, Child Labour and Human Trafficking– Adequate female and juvenile detention centres– Paralegal support and access to justice for vulnerable groups

Source: MCDMCH

Source: FAO-PtoP

Economic Returns

• Every Kwacha raises income by K1.17• Additional K0.62 raised local income• Ineligible households benefit from increased

demand• When local supply constraints cause inflation,

overall gain drops from K1.79 to K1.34

Challenges• Current funding challenge, 2015 and 2016 targets

unlikely to be met• Commitment of new government not yet clear• But: Programme too big to fail• No legal statutes. Talks of Social Protection Act.

New Constitution draft would enshrine social rights.• SCT most significant step in the Zambian context,

but still far away from horizontal Social Protection Floor

Next Steps• Programme reduces poverty gap significantly, but doesn’t

always close it. not right-based, mitigates, doesn’t provide.• Urban targeting currently PWD households only. What about

non-PWD destitute households in urban areas?• How will the programme intersect with general pro-poor

and poverty eradication policies?• What about poor under dependency ratio of 3?• Talks of a maternity & infants allowance• Universal social pensions?• Universal child grants?• Agriculture input programmes coupled with seasonal cash

transfers?

Twalumba Maningi

S OCIAL C ASH T RANSFERS IN Z AMBIA F ROM P ILOT TO N ATIONAL R OLLOUT Social Security Commission...

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