NSSA designing social security for informal sector

The National Social Security Authority (NSSA) is designing a social security package to cater for the larger proportion of Zimbabweans who are working in the informal economy since they are not covered by formal schemes, the country’s largest pension fund has announced.

The NSSA Acting General Manager, Dr Charles Shava told journalists under the NSSA and Insurance and Pensions Commission (IPEC) Journalism Mentorship Programme that they came up with the idea after realizing that a vast majority of the informal workforce has never held a formal job in the country.

Working with the International Labour Organisation (ILO), NSSA reports that it has already produced a report on the feasibility of extending coverage to the informal sector.

“Recognising that a greater percentage of Zimbabweans particularly those working in the informal economy are currently excluded from social security coverage, we are working on developing an informal sector scheme that considers the needs of players in that sector,” said Dr. Shava.

Dr Shava confirmed that NSSA and ILO intended to undertake extensive stakeholder engagement which would culminate into a nationwide informal sector needs assessment survey.

“Already we have produced a report on the feasibility of extending coverage to the informal sector working in partnership with the ILO.  It is our hope that the information collected from this survey will enable us to design and cost a sustainable scheme that meets the needs of the informal sector,” he said.

“Hence, we are excited about this mentorship programme as we believe that you will be able to support us in our efforts to extend coverage to the informal sector.”

In November 2022, ILO reported that according to estimates, almost 5.2 million people trade in the informal economy in Zimbabwe, of which 65 percent are women and are more often found in the most vulnerable situations.

Critical studies scholar, Dr Khanyile Mlotshwa welcomed the move by NSSA saying the informal sector has to be recognised as a significant actor in the Zimbabwean economy with the right to social security benefits.

“There is a need to take important measures to respect the operations of the informal economy because it is an economy where a lot of livelihoods are feeding from,” he said.

Dr Mlotshwa  stated that Zimbabwe’s informal workforce, like that of many other regions of the world, has a wide range of occupations, implying that employees should be able to invest in social services of their choice.

“The common factor is that workers in the informal sector lack legal recognition and work without secure contracts, worker benefits, or social protection. However, the earnings they make sustain many lives and livelihoods. In itself, the informal sector has exhibited a lot of resilience, surviving against a lot of unpredictable shocks and challenges,” he said.

According to the World Bank, informal workers in Zimbabwe are concentrated in key economic areas such as agriculture, mining, and tourism. 

Despite their importance to the economy, these industries give less chance for the country to climb up the value-added chain or provide higher-quality jobs for workers.

According to a 2022 Country Economic Memorandum, Zimbabwe’s growth record has been hampered by its huge informal sector, which complicates productivity growth, policy effectiveness, and long-term development. 

At the macroeconomic level, widespread informality reduces the revenue base and inhibits the government’s ability to mobilize domestic resources.

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