NANCY MWAPE, Livingstone
GOVERNMENT says weak and fragmented social security protection mechanisms in some African countries are affecting the capacity of pension funds to positively contribute to economic growth.
Minister of Labour and Social Security Fackson Shamenda said social security systems are commonly referred to as workers’ capital, which is readily available for development.
“The aim of the social security system is to provide safety for members and these are resources that develop economies. In cases where pension funds are mismanaged, the economy is equally affected,” Mr Shamenda said.
The minister said this on Tuesday during the official opening of a workshop on coherent pension policy and improved pension delivery in Africa organised by the World Bank in collaboration with the National Pensions Scheme Authority (NAPSA).
Mr Shamenda said Government is committed to investing in social protection, sustainable development, inclusive growth, job creation and expansion of local markets.
He, however, observed that the sector is faced with numerous challenges, among them high levels of poverty and low levels of spending on social protection.
He said Government has embarked on reform of the pension schemes and the exercise is expected to be finalised by the end of the year.
And World Bank lead economist Anita Schwarz said civil service pension systems are as mature in Africa as anywhere in the world and are putting strains on Government finances.
Ms Schwarz said when workers reach old age, they cannot depend on Government for support and end up with informal support from families.
“It is a challenge to think of designing systems that will prove to be attractive and beneficial for the working age population,” she said.
Ms Schwarz said there is need to expand pension coverage through occupational schemes, inclusion of the informal sector and development of appropriate investment policies for pension reserves.