Mpango: Invest cautiously

ARUSHA: VICE-PRESIDENT Dr Philip Mpango, has called on social security institutions across Africa to ensure that members’ contributions remain adequate to meet the core objectives of social protection, despite the growing trend of investing the funds in infrastructure development.

The VP said that although investment in infrastructure can play a role in driving national development, it is important to maintain a balance so that social security funds continue to provide protection against economic and social shocks and support poverty reduction efforts.

Dr Mpango made the remarks yesterday while officiating the opening of the 14th International Policy Makers Conference on Social Security in Africa, held at the Arusha International Conference Centre (AICC).

He said that while social security funds in Africa are increasingly being used to invest in infrastructure development, it is important to ensure that members’ contributions set aside for social protection remain sufficient to meet the core objectives for which the funds were established.

He cautioned social security institutions against engaging in infrastructure projects that lack viability, warning that such investments could weaken the ability of the funds to fulfil their core mandate.

Dr Mpango said careful evaluation is crucial when selecting projects for investment to avoid poorly conceived projects, those with excessively high costs, projects that are overly complex to manage, or those that do not align with the needs of the intended beneficiaries of social security schemes.

He added that failure to conduct thorough and evidence-based feasibility studies could result in serious financial implications, including delayed payments to beneficiaries or total loss of funds invested.

The VP also urged the experts attending the conference to develop strategies on how well-managed social security funds can contribute to enhancing ongoing efforts to increase financing for investments in social and economic infrastructure in rural areas.

He noted that investing in rural infrastructure will help boost productivity and improve the quality of life in rural and peri urban areas, create employment opportunities and reduce rural-to-urban migration.

Dr Mpango further said that infrastructure financing in Africa faces an estimated annual shortfall of between 68 billion US dollars and 108 billion US dollars a situation that has led many development analysts to agree that social security funds are well positioned to play a greater role as a catalyst in accelerating infrastructure development across the continent by helping to bridge this financing gap.

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He urged social security policy makers from across Africa participating in the conference to offer practical ideas and solutions on how social security funds can effectively and sustainably play a role in infrastructure financing.

Earlier, Chairperson of the African Social Security Association (ASSA) Mr Muyangwa Muyangwa, said that ASSA continues to promote capacity-building initiatives and partnerships while advancing policy development aligned with Africa’s priorities and goals, addressing the continent’s unique challenges. 0

On his part, Minister of State in the Prime Minister’s Office (Labour, Youth, Employment and Persons with Disabilities), Mr Ridhiwani Kikwete, stressed the critical role of social security funds as catalysts for infrastructure development and socio-economic growth in Africa, noting that the meeting’s timing was particularly significant.

He said that social protection and social security are intertwined foundations and that tackling underdevelopment requires collective efforts, integrating social protection with government services and development strategies.

“To achieve meaningful progress on the continent, joint efforts and resource pooling among all relevant institutions are essential. Collaboration among policymakers, social protection systems and stakeholders is key to addressing challenges such as labour migration, the informal sector and vulnerable communities,” Mr Ridhiwani said.

ASSA Secretary General, Mr Meshach Bandawe, commented on the importance of the conference as a platform for sharing experiences and reinforcing Africa’s infrastructure development.

He called for a united effort among social protection fund stakeholders to accelerate infrastructure progress and make the conference impactful and memorable.

The conference is attended by representatives from 15 countries, including Tanzania as the host, Kenya, Uganda, Zambia, Zimbabwe, Sierra Leone, Rwanda, Burundi, Malawi, Comoros, South Sudan, Namibia, Ghana, South Africa and the Democratic Republic of Congo (DRC). The theme of the conference is: “Social Security Funds: A Catalyst for Infrastructure Development and Socio-Economic Growth in Africa.”