February 7, 2017    4 minute read

How Social Security Ties in with Economic Growth

Sustaining the Future    February 7, 2017    4 minute read

How Social Security Ties in with Economic Growth

Economic growth is necessary for economic development but is not sufficient in itself to reduce poverty. Wealth creation, poverty, and social exclusion are created simultaneously and only deliberate interventions and policies can prevent economic growth from creating more poverty and marginalisation. Social policies then must accompany increases in economic growth but are also a vital means to it.

Social policies are good economics, as economic development translates into social development and social development translates into economic development. Political, economic, civil, and social rights must be developed together for all to be enhanced as an economy prospers; economic rights should not take priority over the others because civil, political, and social rights contribute to economic growth.

27%of world’s population has
adequate social security

Social security is an incredibly important social policy, and the International Labor Organization (ILO), a United Nations agency, has played a pivotal role in making social security a priority on the global agenda.

According to the ILO, only 27% of the world’s population has adequate social security and more than half does not have any at all.

The Right To Social Protection

Not only is social security a human right in a world where everyone should be guaranteed basic social protection, but it is also an economic necessity to fight poverty and guarantee development and access to opportunity.

“Social Security For All” is a global strategy and international labour standard created by the ILO that entails building social protection floors and comprehensive social security systems. Social protection floors are basic social security guarantees that ensure access to health care and basic income security.

The ILO has established global guidelines for social protection floors that can be adapted to the realities and needs of its 187 member states.

Coverage in Africa

Social protection is particularly urgent in the African context because of large informal sectors and high unemployment rates. Coverage by existing African social security schemes is largely confined to workers in the formal economy, whereas most workers in the informal economy are not covered.

80% of the Sub-Saharan labour force
is in the informal economy

According to the African Development Bank, the informal sector contributes about 55% of Sub-Saharan Africa’s GDP and 80% of the labour force.

Unemployment remains high despite the economic growth over the past decade, and it is unlikely that the quantity of decent work available will expand at the needed rate.

Taking Charge

Several recent continent-wide deliberations have prioritised the need to initiate social protection schemes. For example, the African Union Commission and the ILO played leading roles in providing a strategic plan of action for the Yaoundé Tripartite Declaration on the Implementation of the Social Protection Floor.

The ILO is currently assisting all African countries in adopting coherent national social security strategies and it recognises that its advice must be flexible and able to be tailored to national realities and challenges. These social security strategies include the introduction or extension of a basic social security package that includes essential healthcare, child support for school-age children, and a minimum pension.

Securing a Better Future

Experiences from across the continent have demonstrated that in principle, it is possible and affordable to provide all of the poor in Africa with a minimum package of social benefits and services. Ghana, Mozambique, and South Africa have already introduced important elements such as family benefits and access to education and health services.

Burkina Faso, Togo and Benin have recently committed to building their own Social Protection Floors, and several other countries have implemented cash transfer programs. Evidence from successful programs in countries such as Botswana, Lesotho, Mauritius, Namibia and South Africa shows that social pensions have a remarkable impact on the living standards of elderly people and their families, and particularly on children.

Social security is just one example of a social policy necessary to contribute not just to improving human welfare but also to economic growth. The ILO has laid substantial groundwork for establishing general guidelines for social security programs that can be tailored to national contexts.

Studies and national experiences have demonstrated that it is possible to provide all of the poor in Africa with a minimum package of social benefits and services. Strong country ownership combined with political will, bureaucratic capacity, and the assistance of the ILO has the potential to move what is possible closer to reality.

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