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Mkapa laid foundation for strong social protection systems

ON the 24th of July 2020, the country was inundated with countless messages of condolences and solidarity for a fallen comrade, son of the soil and former president of Tanzania, Benjamin William Mkapa.

The former president has served this country with distinction from 1995-2005. As messages of condolences continue to pour in, I view this opportunity to write an article highlighting key social protection reforms achieved under Mkapa as an honour and privilege.

It was during president Mkapa’s time in office that Tanzania successfully pushed through key social protection reforms. First, in 1997, with assistance from the International Labour Organization (ILO), he promulgated social protection reforms where the National Provident Fund (NPF) was converted to the National Social Security Fund (NSSF).

That meant the NSSF became second pension fund in the country and the largest fund with big investment portfolios paying pensions to millions of retirees from the private sector. The main distinction between a pension and provident funds is how the final benefit is paid out to a retiree.

Pension funds are paid out either as an annuity or a combination of a lump sum and an annuity. Provident funds, on the other hand, are paid only as a lump sum and it is upon the beneficiary to invest it if he so wishes.

So due to low level of financial literacy to Tanzanian retirees most of them were fallen into old age poverty due to lack of constant monthly income, Mkapa is the one who solved that income uncertainty to private sector retirees.

Second, in 1999, the establishment of the Public Services Pension Fund (PSPF), which sought provide social security for employees of the central government under pensionable terms. Before 1999, civil servants were not contributing to any of social security fund rather, they were paid their gratuity and pensions from the general government budget.

The amount was very small compared to the cost of living at that time. It was Mkapa’s regime that fixed up the establishment of the Fund. Third, president Mkapa advocated for the establishment of the National Health Insurance Fund (NHIF) in 1999 and began its operations in June 2001.

The (NHIF) was introduced to fill the lacuna in terms of institutions in charge of covering health financing. Initially, the scheme was initially intended to cover employees in the public sector, however, in recent times, there provision to extend coverage of the scheme for private membership.

Critical to the establishment of the NHIF was the ability to provide an alternative health care financing, and it is credit to the leadership of president Mkapa that this reform was successful. Fourth, it was the belief of Mkapa that social protection programmes are an important tool in the reduction of poverty and multi-dimensional deprivation Tanzania.

As a result, in 2000, the Social Action Fund (TASAF) was launched with the aim to increase and enhance the capacity of communities and stakeholders to prioritize, implement, and manage sustainable development initiatives and in the process improve socio-economic services and opportunities.

Currently, TASAF is providing cash transfer to more than 1.3 million poor households in the country. Fifth, in 2003, the National Social Security Policy was enacted with the aim of expanding social security coverage to individuals who operate in the informal sector.

The policy also enabled the government to harmonize existing funds in order to reduce fragmentation and rationalize contribution rates and benefit structures.

The policy envisaged three major areas in the development of the social security system in Tanzania: (1) mandatory schemes; (2) social assistance which is non-contributory and means-tested to vulnerable individuals and groups, and voluntary market-based schemes to provide coverage over and above the mandatory scheme.

In the field of social protection, it is evident that president Mkapa laid the right foundations for the development of social protection for all Tanzanians. As we look to the future, it is important that we build on the gains achieved by Mkapa, and that are our efforts in terms of social protection development do not erode these successes.

We shall forever owe our gratitude to president Mkapa vision and contribution to this country. It is now our turn to roll up our sleeves and do our work. In the meantime, we should let Mkapa rest in peace - (pumzika kwa Amani Mzee Mkapa.)

●The writer is a social security analyst and designer skuloshe@gmail.com


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