Week 25:The place and opportunity of Social Protection in Africa in light of COVID -19 pandemic

Summary: Despite the glimmers of hope across the African continent of progress made in the social protection agenda, these efforts hardly scratch the surface on the holy grail of migrating a massive batch of excluded persons to formal mechanisms. Even more puzzling is that the excluded (as well as the included) continue to leverage on informal mechanisms embedded in dynamic social networks for risk sharing and support through hard times. For the excluded 82% It is therefore not a case of a vacuum of a mechanism to support at risk members of society, but rather two parallel systems running with the formal catering for 18% of Africans and the informal over 82% of Africans. The dominant narratives explaining the glaring gap of inclusion has been pervasive informality, financing gaps, weak institutions and social registers. The question of choice and value is often foregone and assumed. However, with every other experimentation and implementation of the pervading narratives failing to create a eureka moment, a peripheral hypothesis is gaining traction.

What if the question of choice and value may not be cast on stone? It could be the case that when the excluded majority do their math, the formal social protection system as designed simply does not translate to a value worth being part of. Before the decolonization debate gained momentum, such a thought would be dismissed as a red herring. However, as Africans continue to collect and collate knowledge especially on the history and genesis of the current dominant systems – this peripheral thought is coming to the center. Is the current formal social protection system in its design and operation fit for purpose in Africa? Who owns the system? Is it a funding quagmire or a design snafu?

With under 150,000 reported COVID – 19 deaths across the continent of Africa contrasted to nearly 40 million “new poor” Africans, the pandemic is a livelihoods crisis. Put metaphorically, the continent buried millions of jobs, businesses and livelihoods. The COVID - 19 pandemic created an unprecedented large scale natural experiment of social protection mechanisms in Africa. The weakness and incompleteness of the formal systems was laid bare. This created a space for introspection – for the actors in the sector (Government, researchers, recipients, civil society groups and grass-root mobilizers) to look within and awaken to the possibility of redesigning place and opportunity of Social Protection in Africa.

Contrary to the dooms-day prophecy of dead bodies strewn on African streets predicted from the thinking that the quality of healthcare services has a straight line impact on COVID – 19 mortality, the human death card has been kind to Africa.

Based on World Health Organization as at 6 October 2021, the recorded deaths for all 54 nations in Africa put together of 147,386 against the continent’s population of 1.3 billion people[1][2]. This scores high when contrasted to Europe’s 1,350,167 deaths against the Europe’s population of 740 million people. Even where the argument of data accuracy and completeness is leveled, the truth is holistically the continent is not witnessing increased hospitalization or deaths.

Simply put with reported deaths under 150,000, the impact of COVID – 19 on Africa was not massive deaths.

However, there was a deadly impact to the continent. Metaphorically speaking, the continent witnessed death of jobs, businesses and livelihoods with economic despair laid bare all over the streets of Africa. As a result of the pandemic, Mahler et al[3] estimate that for the first time in 20 years, poverty will increase and the African continent will witness upto 40 million “new poor” Africans. “New poor” is defined as “those who were expected to be non-poor [..] prior to the COVID-19 outbreak but are now expected to be poor [..].” (due to pandemic impact)[4]. This prediction is well witnessed in the continent. From big corporates to fledgling small business, there has been down sizing and closures. Africa’s informal economy that accounts for nearly two – thirds of employment opportunities and is often animated by mobility of commodities from production to consumption zones was significantly disrupted by lock downs and curfews. For the first time, Many African Government cabinets had to seriously consider the implication of a grey future for unengaged youth vis a vis nation security and upcoming (usually controversial) electoral cycles. It felt like a house of cards as the majority of youth willing and able to work were caught up with fading opportunities and increasing despair.

As a result of the pandemic a lot of businesses, jobs and livelihoods were buried in Africa. The pandemic was a socioeconomic crisis - a sharp downturn on livelihoods for nearly 40 million Africans.

The way human society classically attempts to resolve socioeconomic crisis is by practicing and eventually institutionalising social protection mechanism (being your brother’s keeper). Social Protection is a broad framework for recovery by extending opportunities and building resilience for the poor and those susceptible to poverty to cope with shocks they face or could face over their lifetime from unemployment, disease, old age, death etc.

Social protection is not new to Africa. It is embedded in the fabric of society since time immemorial with indefatigable egalitarian ethos based on solidarity, reciprocity, altruism and obligations. It almost goes unspoken when a relative or even friend falls into hard times, the social network immediately come together to put up contributions in cash and in kind. It has been argued that the increasingly popular mobile money transfer systems simply digitized and infused trust and accountability in the pervasive informal social protection mechanisms for responding to distress and vulnerabilities within family networks(Jack et al., 2013).

Social protection mechanisms (and all other risk sharing mechanisms) work on the law of large numbers where many actors come together and make small ( very affordable) contributions to cushion each other. The underlying assumption is that the actors are sufficiently disparate so the same calamity does not befall them all at the same time. In the law of large numbers then the more the merrier. Every other year more money gets into the pot than leaves the pot ( e.g. for every 1,000 persons only 40 call for support that draws out say 40 – 50% of the contributions therefore the remainder keeps rolling over and multiplying year on year). If a tsunami/ contagion occurs to all at once the odds are so rare that more often than not the system will work and when the payments are called out the extra roll over funds by and large covers it.

A related way I like to think of it is using the lingua more common to the digital world of the Aggregator – multiplier effect. You have this one center that aggregates persons within a network (it could be country men as is the case of universal social protection, family members or employees). Over time they create the multiplier effect since they roll over the funds that are not exhausted and the time value of money kicks in.

At the core of a sufficient and sustainable social protection system is the ability to aggregate actors to realize the ‘multiplier effect’ in the law of large numbers.

This is the crux of the matter in the place and opportunity for social protection in Africa. The ILO indicates that more than 82% of Africans do not have access to formal social protection[5]. In a human rights lens the system simply put is unjust and exclusionary. In an economic risk sharing lens the system where just 1 in 5 participate to keep the system going is a stressed unstable system.

The search for the silver bullet to flip the statistics has been going on and on since the independence of many African nations in 1960’s but it has always been a seemingly insurmountable challenge. There have been glimmers of hope within Africa. Cabo Verde has achieved an estimated 90% coverage for non – contributory old age social protection while South Africa is lauded for progressive legislation that extends coverage for previously excluded informal workers including domestic workers, farm workers and members of the police service. Kenya has made significant strides in building a digital single registry as well as adopting a life cycle approach that identifies different nodes of vulnerability from cradle to grave thereby creating an opportunity for more comprehensive coverage.

Despite the glimmers of hope across the African continent in making progress on social protection coverage, these efforts hardly scratch the surface on the question of migrating a massive batch of excluded to formal mechanisms. Even more puzzling is that the excluded continue to leverage on informal mechanisms often embedded in social networks. It is therefore not a case of a vacuum waiting for a formal social protection system. The seeming gap of 82% exclusion might just as well be a case of conviction in the majority that when they do the math, the formal social protection system as designed simply does not translate to a value worth being part of. Before the decolonization debate gained momentum, such a thought would be dismissed as a red herring.

However, as Africans continue to collect and collate knowledge especially historical genesis of the current dominant systems – the curiosity gains traction. Is the current formal social protection system in its design and operation fit for purpose in Africa? Who owns the system? Is it a funding quagmire or a design snafu?

This curiosity informed a Pan African Conference on Inclusive and Just Social Protection in Africa in August 2021[6] for which I was privileged to coordinate.

As the debate grew between academics, policy makers, grass-root mobilizers, civil society groups and recipients of social protection a number of dominant narratives were challenged:

1. It may not be the case that informal workers and businesses cannot afford to contribute to a social protection system. Nearly two – thirds of the African economy is driven by this so called informal sector. The question is more plausible a value question and remaining in the informal social protection mechanisms could be an economically rational choice.

2. Informality is often characterized by lack of identity. More often than not informal traders do not have a permanent working station and we witness running battles as formal authorities clamp down on their perceived “illegality”. The conference challenged the question of identity and what it means to value creation. Why do huge corporations have physical and digital addresses? The informal sector workers argued that with an identity, there is an immediate value release on their trade – customers build their expectations and trust in the products / services. The trader builds financial histories and unlocks the ability to borrow. The trader becomes a productive citizen for tax purposes and can contribute to the national systems creating the multiplier effect as illuminated in Keynesian ideas by John Maynard Keynes in 1937.

3. Informal social protection mechanisms are indeed pervasive and based on dynamic social networks. However, it is not necessarily true that they are hard to model and can therefore not be institutionalized. They do have a pattern, there is a core that hold the society as defined in the eyes of the actors together.

4. Going by the amount of money contributed to periodically fund death and disease within these informal systems, Africans may just as well be the premium payers towards social protection. This creates an opportunity. Every economic system works on simple rules – one is that there are no hundred dollar bills left on the side of the street (every opportunity is seized). A premium payer implies a system that does not need subsidies. There is an opportunity to design a self sufficient contributory system as there is already one running albeit informally.

5. The question of who designed the current formal system is then valid. Is the current pervasive design of Social Protection systems fit for Africa’s purpose? At the core of every risk sharing group is an “insurable interest” i.e. the question of asking why another member of society should be interested in paying for another member’s well being. From a western dominant lens, the core is a nuclear family (husband, wife and their biological children). That identity is easily validated and also neatly small quite often. For the case of Africa often times the band of defining family stretches quite a bit and could overlap. However, it will often center around (Kusimba et al., 2016). There is a possibility of a different core that works and is able to capture value for a majority of Africans.

[1] https://covid19.who.int/table [2] https://www.worldometers.info/coronavirus/ [3] https://blogs.worldbank.org/opendata/updated-estimates-impact-covid-19-global-poverty-looking-back-2020-and-outlook-2021 [4] https://www.worldbank.org/en/topic/poverty/brief/Profiles-of-the-new-poor-due-to-the-COVID-19-pandemic [5] https://www.ilo.org/africa/about-us/offices/abuja/WCMS_613667/lang--en/index.htm [6] https://socialprotection.org/es/discover/events/inclusive-and-just-social-protection-africa-conference