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The East African : Sep 19th 2015
32 The EastAfrican OUTLOOK SEPTEMBER 19-25,2015 S U S TA INAB L E D E VE LO PME N T Reduced spending on social protection undermines poverty eradication efforts Social safety nets p≥ovide ≥egula≥ and p≥edictable suppo≥t to poo≥, vulne≥able people By BERNA NAMATA The EastAfrican social protection forcing the region’s poor to remain outside the social safety net system, which in turn undermines efforts to reduce the poverty gap across the region. Social safety nets are de- E signed to provide regular and predictable support to poor and vulnerable people. They are also referred to as safety nets, social assistance, or social transfers and are a component of larger social protection systems. The region’s governments have relied on donors to subsidise their spending on social sectors, such as health and education, where budgetary commitments remain quite small compared with sectors such as infrastructure. The dilemma now for gov- ernments is how to raise domestic resources to finance social protection as donor aid dwindles. In recent years the focus has shifted to actions that address not only income poverty and economic shocks, but also social vulnerability, in order to better prepare the affected for future uncertainties. Due to limited funding to social sectors, millions of lives across the region are at risk, particularly those most vulnerable to poverty such as the elderly, those living with disabilities, young children, and female-headed households. In the health sector, for example, World Bank figures show that on average government spending across the region over the past four years is still below 10 per cent of GDP. Rwanda leads, having increased spending on the health sector from 6.2 per cent in 2010 to 6.5 per cent of GDP in 2013. The country also leads in spending per capita, which increased from $58 in 2010 to $71 in 2013. Burundi has spent 5 per cent of GDP on average over the past four years. Uganda’s spending on the health sector fell drastically from a high of 6 per cent of GDP in 2010 to Source: World Bank Residents queue for medical services at a mobile clinic in Taita Teveta County, Kenya. Picture: Kevin Odit 4.3 per cent in 2013. On average, in the same pe- riod, Burundi spent $21 per person while Uganda spent slightly over $50. Tanzania marginally in- creased spending, maintaining it about 3 per cent of GDP, but it increased spending per person slightly to $49 in 2013 from a low of $37 in 2010. Kenya is the worst per- former across the region spending only 1.9 per cent of GDP on health in 2013, which reflects a marginal increase from 1.7 per cent of GDP spent in 2010. It also spent less than $50 per person on average over the past four years with the highest amount being $45 in 2013. Limited spending by gov- ernments means that millions of East Africans cannot afford to pay for health services at public or private hospitals. The rural poor, in particular, remain underserved. In the region, only Rwanda has achieved 96 per cent access to health insurance, largely through regulation, while Kenya plans to expand health insurance coverage to about 25 million people by the end of this year. While Tanzania launched the National Health Insurance Fund in 2001, which is compulsory for public servants, over 90 per cent of the population work in the informal sector. Uganda is still in the process of launching a compulsory national health insurance scheme. According to the latest World Social Protection Report 2014/15 by the International Labour Office (ILO), despite a large expansion of schemes, existing social protection policies do not sufficiently address the income security needs of children and families, particularly in low- and middle-income countries with large child populations. About 18,000 children die every day, mainly from preventable causes. Many of these deaths could be prevented through adequate social protection. On average, governments allocate 0.4 per cent of GDP to child and family benefits, ranging from 2.2 per cent in Western Europe to 0.2 per cent in Africa, Asia and the Pacific. Underinvestment in chil- dren jeopardises their rights and their future and hinders the economic and social development prospects of the countries in which they live. Experts are now pushing the international community FACT BOX CHALLENGES: While 285 million poor people live in cities in developing countries, reaching them presents special challenges, including identifying, targeting, communicating with, and enrolling perspective beneficiaries. SPENDING: Safety net spending is higher than the global average in Europe and Central Asia and in sub-Saharan Africa. The combined spending on social safety nets amounted to about $329 billion between 2010 and 2014. This sum is twice the amount needed to provide every person living in extreme poverty with an income of $1.25 a day. PROGRAMMES: In 2014, more than 1.9 billion people in the developing world were beneficiaries of social safety net programmes, according to the administrative data at the programme level for 136 countries analysed in the World Bank report. This large number is driven in part by programmes in countries such as China and India. to embrace social protection as a priority in the post-2015 development agenda — the Sustainable Development Goals (SDGs). Goal eight (8) of the 17 SDGs, which covers social protection, is expected to “promote sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all.” Experts argue that better Health spending per capita ($) ast African countries are not spending enough on Health expenditure, public (percentage of GDP) social protection is needed to ensure that all people have the security of knowing that if they lose their job, or fall ill, or grow old, they will not face the risk of poverty and insecurity. In addition, social protec- tion policies contribute to fostering both economic and social development in the short and long term, by ensuring that citizens have income security, access to healthcare and other social services, and are empowered to take advantage of economic opportunities. “Social protection helps people to be more productive, it helps local economies to begin to gather momentum; thats why we think there is a strong developmental and feasible case for social protection,” Guy Ryder, the director-general of ILO, told The EastAfrican. Equity Mr Ryder said that while employment and decent work are the best means to improve living standards, the equity aspect should be pursued through adequate social protection systems, which provide social protection to reduce the vulnerabilities of the poor. According to the latest World Bank report, The State of Social Safety Nets 2015, in most low-income countries, the size of safety net transfers is not big enough to close the poverty gap. When countries spend less than average on their safety nets, impacts on poverty reduction are less pronounced, with only 10-20 per cent of the poverty gap eliminated. For instance, the average level of cash benefits is only 10 per cent of the poor’s consumption across low-income countries, according to the report. This represents 21 per cent of the poor’s consumption in lower-middle-income countries compared with 37 per cent in upper-middle-income countries. Worse still, lowand lower-middle-income countries have the least ability to direct resources to those most in need. But while higher levels of spending are typically associated with higher impacts on poverty, even within similar budgets, some countries do better than others at each level of spending. To increase the efficiency of safety nets, better co-ordinated systems are required, according to World Bank experts. “Protecting the poor and the vulnerable and allowing them to avail themselves of opportunities requires integrated systems, necessitating multiple social protection programmes to work together,” says the report.
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