Mchomvu, Tungazara and MaghimbilTANZANIA REPORT

Social security systems in Tanzania
A.S.T.MCHOMVU1,
MAGHIMBI3

FELICIAN S.K.TUNGARAZA2 AND SAM

It shows that non-conventional

ABSTRACT
The paper starts by examining the concept of social security in
Tanzania, showing that there are three key issues in social
security which have not been adequately addressed by existing
social security schemes and need immediate attention. The paper
then examines the nature and forms of social security in Tanzania
in a historical perspective.
social
security instruments hClVefailed to promote equitable economic
growth and have been heavily biased in favour of the well-off at
the expense of the poor. The effectiveness of traditional and
informal social security systems has been impaired by changes
that have taken place since the colonial period. Formal social
security schemes are riddled with problems. The development of
formal
social security has been gradual and the introduction of
structural acijustment programmes has led to the decline of
formal security schemes.
social
security schemes cover only 6% of the population and focus on
only afew risks.

In terms of coverage, formal

Phase I: Overview
Introduction
IN THE PAST TWO DECADES,
research on social security in Tanzania has
bifurcated between the study of modern and traditional and informal

I Tutor, National Social Welfare Training Institute, Dar es Salaam
2 Senior Lecturer and Head of Department of Sociology, University of

Oar es Salaam

3 Associate Professor, Department of Sociology, University of Oar es

Salaam

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social security schemes. The focus has been mainly on formal social
securityand particularly on the protection of workers against conting-
enciesassociated with temporary or permanent loss of income. FOfJTIal
social security schemes cover only 5% of the labour force and 6% of
the population, Most of those covered are working in the urban formal
sector and these schemes provide few benefits
198-7,
Tungaraza 1988,Wangweand Tibandebage 1999).

(Bossert

Sincethe main aim of social security is to help individuals maintain
a reasonable standard of living when faced with social and economic
contingencies, there has been an increasing recognition of the need
to understandthe adequacy of benefits. Studies by Mangangila (1976),
Mataba (1983) and Mlyansi (1991) show that the amount of benefit
providedby various formal security schemes in Tanzania is insufficient
to avert poverty and they have thus failed to provide adequate social
prote,ctionto members in distress. Moreover, these schemes are faced
with a host of other problems, such as the small
rates of interest
awarded annually to members, the evasion of payment of premiums
by employers and a lack of transparency, the delaying of benefits and
disparities in risks covered.

The literature on traditional and informal social security systems
has focused on the organizational and administrative structures and
social relations among members of the family, the kinship, neighbour-
hoodandcommunitygroups and types of transfers going on within these
systems (Bossert 1987, Bakari 1988, Tungaraza
1993, 1994 and
2000a).These systemsoperate in both urban and rural areas. A number
of studies on informal social security systems have shown that they
have failed to promote equitable economic growth and that
these
programmes are biased in favour of the rich. Furthermore,
they show
that povertyalleviationprogrammes have failed to identify the real poor
(Sender and Smith 1990). The lack of accountability and inadequate
resources allocation of these programmes has also been shown.

Thepurpose ofthis paper is threefold. Firstly, to examine the concept
of social security inthe Tanzanian context. Secondly, to identify social
protection issues and thirdly, to assess the strengths, weaknesses,

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Mchomvu, Tungazara and MaghimbilTANZANIA REPORT

opportunities and threats of social security systems so as to arrive at
viable suggestions for enhancing the'ir effectiveness and efficiency.

against

the economic

In most cases the contingenCies

The concept of social security
Much ofthe literature on social security in Tanzania has defined social
security as the protection provided by society to its members through
public measures
and social distress which
otherwise would be caused by the stoppage or reduction of earnings
arising from contingencies.
are
associated with either the temporary or the permanent
loss of income
(Haule 1994, Omari 1994, Mallya 1994). Examples of contingencies
which could cause economic and social distresses include sickness,
disease, maternity, old age,
employment
injury and occupational
invalidity, death and unemployment.
Such a definition
does not
adequately fit the socioeconomic context of developing countries such
as Tanzania. It overemphasizes
the role of the public sector and the
related net costs and expenditures while overlooking social security
as an investment in human capital. It also provides limited guidance to
effective poverty alleviation. Most people in Tanzania are faced with
insecurity caused by chronic or structural poverty: This insecurity
arises mainly from insufficient
economic development. But the
removal of chronic social insecurity faced by the poor does not remove
the social insecurity associated with risks emanating from conventional
contingencies such as loss of employment, disability, old age and death.
The fundamental social security needs of the poor in Tanzania are
the result of chronic or structural poverty and only secondarily of
conventional
to define social security
should therefore take into account both the conventional definition as
well as the basic needs definition of social security which portrays the
situation in Tanzania. Holzmann and J0rgensen (2000) offer such a
definition. According to them, social security consists of "public
interventions to assist individuals, households and communities better
manage risk and to provide support to the critically poor". Underlying
this definition is the idea that social security is both a springboard and

social

insecurity. An attempt

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13

a safety net for the poor. lt regards social security as an investment
in
human capital and focuses more on the causes than on the symptoms
of poverty. Finally, this definition considers individuals, households
andcommunitiesas vulnerable to multiple risks from different sources,
both natural and man-made.

Based on the above definition, some social security issues can be
identified in Tanzania. These include poverty, equity and the right to
social security. Each of these key issues will be discussed in turn.

Social security issues in Tanzania
Poverty
Povertyin Tanzaniaremains pervasive. Studies conducted in the 1990s
based on surveys using random sampling techniques
indicate that
mainland Tanzaniaranked as the second poorest country in the world
with a GNP per capita ofUS$IOO. Other studies based on household
surveys estimated the per capita expenditure
at US$28 I, thus in-
income and expenditure
dicating aR underestimation of the national
(Bagachwa 1994, and Tinios et a!., 1993). Whichever
is the correct
figure,most Tanzanianslive in poverty, though this is more widespread
inruralthan inurbanareas (Jazairy et a!., 1992; Tinios et a!., 1993).

Common to all these studies is the attempt to establish the nature
and extent of poverty in all areas of Tanzania. These use .income as an
indicatorof poverty,a methodology that has been criticized elsewhere
(e.g. Republic of Tanzania 1999). As an indicator, income reveals little
of matters of empowermentand participation, literacy levels, the health
status and food security of individuals and tradition and norms. It is
because of the unsatisfactory nature of this indicator that the United
Republic of Tanzaniain 1999 published a book on poverty and welfare
indicators to assist researchers.

According to this report, poverty is a state of deprivation

that
prohibits a decent human life. Poverty results from many mutually
reinforcing factors such as a lack of productive resources to generate
material wealth, illiteracy, the prevalence of diseases, discriminatory
socioeconomic and political systems, natural calamities
such as
drought, floods and HIV and man-made calamities such as wars. The

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Mchomvu, Tungazara and Maghimbi/TANZANIA REPORT

above notwithstanding, we do not know who are the real poor in Tan-
zania. Moreover, despite many studies on poverty alleviation,
there is
no agreed poverty line against which to gauge various efforts to
eradicate poverty. Sender and Smith (1990) show that it is a myth to
perceive rural people as a homogeneous
by
egalitarian forces. We need to understand the heterogeneity of the poor
people in Tanzania.

group characterized

Despite the literature on poverty in Tanzania, most studies do not
link poverty and social security policies and programmes. Perhaps the
only exception .is the study by ~he ILO(1982). According to this, the
basic needs of Tanzanians were in danger of being eroded by the market-
oriented policies advocated by the World Bank and the International
Monetary Fund. It advised Tanzania to pursue economic growth with
redistribution as well as to provide public welfare services so as to
ensure the satisfaction ~f basic human needs. Social security was not,
however, perceived
needed for poverty
alleviation.

as one of the strategies

Equity
Equity denotes fairness or social justice. It implies that people's needs,
rather than social privileges, should guide the distribution of oppor-
tunities for well-being. Equity requires reducing unfair disparities as
well as meeting acceptable standards for everyone. Pursuing equity in
social security means trying to reduce unfair and unnecessary gaps in
social security, while working efficiently to achieve the greatest
improvements for all. In policy tertns, therefore, we have to aim for
social security policies that are redistributive. This implies, firstly, the
protection of the vulnerable by systematically reducing inequities in
the distribution of incomes and resources through a guarantee of basic
income and the conditions for living in dignity. Secondly,
it implies
providing the conditions for autonomy, so everyone can participate fully
in their society. Thirdly, it implies enforcing, protecting and legitima-
ting social and political citizenship.

Studies on equity issues in Tanzania include the works by Awiti
(1973), Putterman (1986), Coulson (1982), Ndulu (1982), Green

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15

(1977),BankofTanzania (1981) and Tungaraza (1988). When examining
the distributionofland in Ismani, Iringa Region Awiti (1973) concluded
that rich peasants, representing about 9% of households, held approx-
imately 53% of the total land under cultivation. A similar study by
Putterman (1986) in some selected villages in Arusha, Morogoro,
Mbeya, Iringa and Ruvuma regions reaffirmed the existence of in-
equality in the distribution oflandhoiding.

institutions

to a great extent,

Inequality in the distribution of resources is also found at the level
and health
of social infrastructure, such as educational
facilities. Coulson (1982), Ndulu (1982) and Tungaraza
(1995)
indicate that regions such as Dar es Salaam, Kilimanjaro, West Lake,
RuvumaandTangahave more schools and health facilities per inhabitant
than regionssuch as Shinyanga, Dodoma, Kigoma, Tabora and Mwanza.
Social inequalities also exist within the regions.
In his study of the
social sector in Shinyanga, for example, Tungaraza (1998) found that
health facilities, educational
institutions and water supplies were
unevenly distributed between the districts. The way these resources
are distributed corresponds,
to the differential
regional distribution of incomes. Regions with comparatively fertile
soils, a favourable climate and a relatively reliable rainfall, such as
Kilimanjaro, Arusha, Tanga and West Lake, have also higher average
incomes than other regions. Tungaraza (1988) observes that income
inequalities found at the regional level are also found at individual and
household levels in all areas of Tanzania. Differences in the quality of
arable land, the availability of social infrastructure and educational
attainment have led to the concentration of economic activities
in
certain regions. The observed income inequalities at individual and
household levels are a result of many factors. Among them include the
different economic development of individual
the low
productivity of agriculture, the different levels of educational achieve-
ment and the existence of differences in salaries paid by employers.
Most of the above studies were conducted in the 1970s and 1980s
and therefore cannot give us a true picture of the inequities
in the
distribution of social security resources and incomes in contemporary
Tanzania. Furthermore, the above studies are silent on the extent of

regions,

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of social security resources

redistribution
and
within a generation. Such an understanding is important so as to redress
the unfair and unnecessary social gaps in social security in Tanzania.

across generations

The right to social security
There is only limited information on the right to social security in
Tanzania. The only study on this aspect is the work by Tungaraza and
Mapunda (2000). They point out that social protection is a human rights
issue. According to Article 22 of the Universal Declaration of Human
Rights of the 10th December 1948 everyone, as a member of society,
has the right to social security. The State therefore is obliged to ensure
a minimum standard o(material welfare to all its citizens on a basis
wide enough to cover all the main contingencies of life. This includes
general basic social support for all citizens, regardless of contribution
or employment. In Tanzania, the right to social security for all citizens
is stipulated in the Constitution of the United Republic of Tanzania of
1977, as amended in 1984, 1995 and 1998. Some of these rights
include the right to social welfare at times of old age, sickness or
disability and in other cases of incapacity. Tungaraza and Mapunda
(2000) argue that the reason this right is not conferred upon citizens
is due to a shortage of financial resources. In addition, however, a lack
of accountability,
in the
enforcement of these rights have denied people their rights to social
protection. This right has not been realized because of a lack of
awareness on the part of the members of society.

a lack of prioritization

and deficiencies

The second right

to social security is the right

to live and to
protection of life by society. Despite the eltistence of this right, many
people have diea from sickness, hunger and floods. Moreover, many
people still live in sub-standard housing, while many households do
not meet their members' basic needs because of economic hardships.
Thirdly, Tungaraza and Mapunda (2000) show that, although contri-
butors and beneficiaries of various social security schemes in Tanzania
have the right to participate in matters pertaining to social protection
either directly or through their representatives who are freely elected
by them, in practice these members do not directly participate in board

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17

meetings nor are they represented by members who are freely elected
by contributors of the funds. Contributors and beneficiaries of various
social security schemes do not have an opportunity to influence the
decision-making process and to monitor the administration of social
security schemes.

The right to social protection conferred under the Constitution of
the United Republic of Tanzania of 1977, as amended in 1984, 1995
and 1998, should also confer the right to benefits. Tungaraza
and
Mapunda (2000) argue that the scale of benefits payable under the
different schemes should be known to members. Benefit formulae and
conditions for payment should therefore be clearly spelt out in the laws
establishing the respective schemes. Protecting
the rights of the
beneficiaries is the main responsibility of any social security scheme
and benefits should be paid promptly. Mechanisms for appeal should
be established in law so that aggrieved contribl!tors and beneficiaries
can pursue their rights.

The nature and forms of non-formal and formal social security
Social security systems in Tanzania fall into two main groups, namely,
non-formal and formal social security. Formal social security systems
such as pension
refers to conventional social security programmes
schemes, health insurance and workmen's compensation
schemes.
Non-formal social security systems include macro-economic policies
and programmes to promote equitable economic growth and employ-
ment, investment in and the development of social infrastructure and
specialized programmes for alleviating poverty and traditional social
security systems and practices.

Non-formal social security arrangements
Non-formal social security can be divided into two: non-conventional
social security instruments (such as public interventions not gelired
directly at social protection) and traditional forms of social security.
Non-conventional social security instruments
Non-conventional public interventions include macro-economic pol-
icies and programmes to promote equitable economic growth and

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Mchomvu, Tungazara and Maghimbi/TANZANIA REPORT

employment,
investments in and the development of social infrastruc-
ture and programmes such as health, education and training, housing
and water supply. It includes specialized programmes for alleviating
poverty such as credit schemes,
rural
works, co-operati"es, community-based organizations and non-govern-
mental organizations.

integrated rural development,

Various studies

(see Mtatifikolo

1994) have shown that non-
conventional
social security instruments have failed to promote the
equitable economic growth which can harness the productive capacity
of the large number of unemployed and underemployed working
people in the all areas. Many of the past fiscal and monetary policies
and policies dealing with investments, trade, prices, finance and others
have been heavily biased in favour of the well-off at the expense of
the poor, the unemployed and underemployed.
Indeed, this is the area
where the greatest potential for poverty alleviation through structural
changes in the economy lies. Such a change would, at the same time,
hasten the process by which the poor can be integrated in the main-
stream formal economy and join the formal social security system as
they would have graduated from being primarily concerned with
survival to covering their contingency needs.

These studies also show that many ofthe State-sponsored program-
mes for the alleviation of poverty have failed to reach the poor and
improve their standard of living for a host of reasons. Firstly, these
programmes
are often flawed in their design and delivery system,
resulting in the leakage of the benefits to the rich people. One example
of this is the ambiguity in the selection criteria that purport to identify
the intended beneficiaries. Secondly, they display a lack of focus or
exclusivity in the targeting of beneficiaries. Thirdly, they show a lack
of accountability and incentives and, lastly, the resources allocated for
these programmes are inadequate.

The State's lack of financial resources as well as its lack of political
will are other factors leading to its failure to provide adequate social
protection to the poor. Tungaraza (I990:62)
shows that Tanzania's
social security expenditure quota (defined as the proportion of social
security expenditures on gross domestic product) in the I960s, 1970s

VOL 17 NO 2 JULY 2002 JOURNAL OF SOCIAL DEVELOPMENT IN AFRICA

19

and 1980s has been remarkably low,thus indicating the low priority it is
given.

Non-governmental organizations and self-help organizations have
been able to reach only a limited though significant, number of the poor.
The reasons for t\1isinclude a lack of financial resources which hamper
their efforts to scale up their otherwise effective programmes and
sustain them over time and their weak administrative base, since they
are limited to working in a small area.
Traditional and informal social security arrangements
A number of studies have attempted to understand the nature and forms
of traditional and informal social security arrangements in Tanzania.
Among them include works by Bossert (1987), Tungaraza (1988, 1993,
1994 and 2000b), Victor (1997) and Urassa (2000). Bossert (1987)
identifies four institutions of traditional social security in pre-colonial
Tanzania, namely, domestic groups, which live, produce and consume
together, kinship organizations (lineages, clans), the neighbourhood
and the chief. According to Bossert,
in the past there was mutual
assistance and economic co-operation among these groups and each
was obliged to help the other in case of special difficulties or during
ceremOnIes.

The neighbourhood community is generally composed of relatives.
Social relations between them are therefore determined by the rules,
norms and obligations that obtain between relatives. Thus, relations of
obligations and commitment hold between kinsmen, as well as between
neighbours who are not kin. The chief is the ritual head, the supreme
judge and the military leader of his people. Apart from controlling all
the local resources, in times past the chief guaranteed the survival of
his subjects in case of hardships. A successful chief was therefore
expected to keep a great stock of grain, to be generous and hospitable
towards his subjects and to provide them with food in times of
emergency.

There was a difference between the provisions for the protection of
people from each contingency. For example, old people with many
children were adequately protected while childless old people had
almost none. Although there were provisions for medical, nursing and

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Mchonivu, Tungazara and MaghimbirrANZANIA

REPORT

ritual care in case of illness, the effectiveness ofthis was limited by the
low level of medical knowledge.

that

The changes

took place during colonial period and after
Independence have led to significant changes in the traditional social
security practices. Studies conducted in the 1980s and 1990s show
that the d~mestic group (family institution) still provides support
to
close relatives only (Bossert 1987, Tungaraza 1988 and 1993). Even
the family as a social security institution is increasingly failing to
provide sufficient protection to its members against various contin-
gencies (Tungaraza 1994, Urassa 2000). This has led to the proliferation
of other forms of informal social security systems. In urban areas there
are money exchange networks (popularly known as Upatu), the pooling
oflabour networks and pooling of resources (Tungaraza 1993 and 1994,
.Victor 1997). Victor (1997) shows that in urban Morogoro District
there are Chama cha kufa na kuzikana, associations concerning with
death and burial affairs; Jumuia, (religious groups formed by people
who belong to the same denomination);
tribal associations; commun-
ity-based organizations and UMASIDA (a mutual health insurance in
Dar es Salaam).

Informal social security systems which currently operate among
colleagues, neighbourhood groups and friends have been criticized (see
Tungaraza 1993 and 1994) for failing to provide long-term protection
against various risks and for providing inadequate protection to their
coverage depends on one's ability to
members. This is because
contribute
are
automatically disqualified from membership. Their ~ack of financial
resources means that these groups cannot alleviate the poverty of their
members and they are able only to provide short-term protection.
Moreover,
these forms of social security are confined to a small
geographical area. Finally, they are dominated and guided by customs
and traditions which were normally biased towards men.

to the group. Those who are unable to contribute

Formal social security schemes
Studies that have investigated the nature and forms of formal social
security systems in Tanzania include the study by Bossert
(1987),

VOL 17 NO 2 JULY 2002 JOURNAL OF SOCIAL DEVELOPMENT IN AFRICA

21

r

(1987),

formal ~?cial security systems

Tungaraza (1988), Mlyansi (1991), Wangwe and Tibandebage, (1999).
According to Bossert
in
Tanzan)a are organized according to three major principles;
social
insurance, public support and social assistance. Other principles
include the principle of obliging an employer to grant security and the
principle of compulsory saving. The principle of insurance is the basis
of the Parastatal Pensions Fund (PPF), The National Social Security
Fund (NSSF), the Public Service Pensions Fund (PSPF), the National
Health Insurance Fund (NHIF) and the Workmen's Compensation
Scheme. All these schemes are contributory and cater for employees
in the formal sector of the economy. For example,
the Parastatal
Pensions Fund (PPF) caters for employees holding pensionable offices
in parastatals, the National Social Security Fund (NSSF) caters for all
parastatal
and
employees in the private sector and the Public Service Pensions Fund
(PSPF) caters for all civil servants who hold a pensionable office in
the civil service.

employees who do not hold pensionable

offices

The public support principle forms the basis of the public health
services in Tanzania and non-contributory pension schemes such as the
Teachers Service Commission of 1965, the Defence Forces Gratuities
and Pension Scheme of 1966 and the Specified State Leaders scheme
of 1999. The principle of social assistance provides benefits to people
affected by social risks who can prove they have no means of their own
and do not get support from their own relatives. Examples ofa?sistance
given include support to beggars and peasants, in case of agricultural
risks, floods, victims of the MV Bukoba, a ship that sank in Lake
Victoria and victims of earthquakes in Rungwe District, Mbeya Region.
The principle of compulsory saving is the basis of provident funds.
Each member has an individual account into which members and their
employers pay the prescribed contribution. When members are due
for benefit (due to old age,.invalidity, death and sickness), they receive
the legally prescribed payments from the accumulated account.
The principle of employer liability applies in case of the continuation of
wage payments due to illness as per the Regulation of Wages and
Terms of Employment Order of 1972. This principle also applies in

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JOURNAL OF SOCIAL DEVELOPMENT IN AFRICA VOL 17 NO 2 JULY 2002

social security

payments when employees

case of compensation
are dismissed in
terms of the Severance Allowance Act of 1962. It applies in case of
certain paymel}ts at death in terms of the Employment Ordinance of
riddled with problems .
1957. Formal social security schemes;are
Among these include delay in processing
benefits, unnecessary
bureaucratic red-tape,
lack oftransparency, disparities in risks covered
and poor governance (Mangangila 1976, and Bossert 1987).
The origins and development of formal
There are a few studies on the origins and development offormal social
security in Tanzania. These include studies by Bossert
(1987) and
Tungaraza (1988). Bossert examines the origin and development of
modern social security from pre-colonial period up to'1983 while
Tungaraza
the period from 1961 to 1988. According to
Bossert (1987), formal social security in Tanzania can be traced back
to the period of colonial penetration,
first, by the Germans (1885-
1918) and then by the British (1918-1961), when a new political
system was established alongside the introduction of plantations and
the imposition of a hut tax which forced the Afriean people either to
migrate into various economic enterprises or to participate
in cash
It was during this period that some social security
crop production.
measures were introduced, such as pensions schemes, compensation
payments
the
distribution offood to the rural population during years of poor harvest
and the provision of health services and education for serving colonial
government officials,
formal
social security system.

thus forming a nucleus of the present

to workers

injured while performing

their duties,

explores

Mchomvu, Tungazara and Maghimbi/TANZANIA REPORT

•

Bossert (1987) argues that the formal social security in Tanzania
and not the result of
leaders and workers. These measures
field,
followed by old age pension

was initiated by the colonial administration
pressure from Afriean political
were initiated in the medical
schemes and, later, by workmen's compensation schemes.
From Independence in 1961 up to the late 1980s, the post-colonial State
pursued policies that led to political, economic and social changes in
the country. This involved, among other things,
the development of
the expansion of education and health f,nd
agriculture and industry,

VOL 17 NO 2 JULY 2002 JOURNAL OF SOCIAL DEVELOPMENT iN AFRICA

23

the settlement of rural people into Ujamaa Villages. These changes had
an impact on the development of formal social security schemes. Ac-
cording to Bossert (1987) and Tungaraza (1988), in addition to the rapid
development of health facilities in the rural areas and the expansion of
education, family allowances and the subsidization of Com meal were
established together with many other new social security schemes. The
expansion of social security schemes during this period was a result of
both the agitations of trade unionists and government's own initiatives.
After Independence urban-based public health services were put in
place. After the Arusha Declaration in 1967 the development of social
security was characterized by the expansion of rural health, the provi-
sion offamily allowances and tax relieffrom 1980 for employed couples,
the continuation of payment of salaries at times of illness (1972) and
paid maternity leave (1975).

A number 'Ofstudies exist on the development offormal social secur-
ity systems from 1985 to the present, that is, the period of structural
adjustment policies and globalization in Tanzania. Among these include
one by Haule (1994) who says that structural adjustment policies have
led to the loss of members from the social security schemes such as the
Parastatal Pension Fund and the National Social Security Fund be-
cause of retrenchment. This has led to the drain on the resources ofthe
social security schemes due to the payment of benefits to thousands of
workers who were withdrawn prematurely.

The devaluation of the Tanzanian Shilling, as a result of structural
adjustment, caused a serious erosion of the [mancial assets and solvency
of social security schemes. Social security schemes in this period
tended to develop in an ad hoc manner in response to specific need~
or pressures rather than in accordance with any long-term national
strategy. T~e result has been disparities in provision,
the duplication
of administration and a failure to relate scarce resources to national
priorities.

In the health sector structural adjustment policies have led to
reforms such as the introduction of user fees in the health sector
(Warioba 1998, Msoka 1998 and Tibandebage and Mackintosh 2000).
This has led to the resurgence of illnesses such as malaria, upper

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II

T

r

Mchamvu, Tungazara and MaghimbilTANZANIA REPORT

there is considerable

respiratory infections and TB as well as the non-compliance of patients
regimes, because neither urban nor rural people can
with treatment
afford medical care. On access and exclusion, Tibandebage
and
Mackintosh (2000) conclude that
exclusion
because chealthcare is not affordable. Consequences of exclusion for
patients include death, borrowing to pay for treatment and putting the
lives of other members of the community in danger.
Coverage of soda I security schemes and kinds of
benefits provided
Various studies (see Bossert 1987, Tungaraza 1988 and Wangwe and
Tibandebage 1999) on conventi.onal social security have shown that the
coverage of formal social security schemes is not comprehensive in
terms of the population and risks covered. Currently, sucJ:lschemes
cover only 6% ofthe population and about 5% of the active labour force
in the country. In terms of gender, the majority ofthe people covered
are men, since men constitute most those employed in the formal
sector.
focus on a few benefits
(Bossert 1987, Wangwe and Tibandebage 1999). They cover old age,
disability, survivorship,
illness, maternity, occupational accidents and
diseases. Benefits are of two kinds: benefits in kind, where members
are entitled to medical services from their employers and financial
benefits in the case of illness and maternity. Provident funds give lump
sump benefits to their members while social security schemes based
on the social insurance principle provide initial lump sum payments
followed by monthly benefits to their members. The same applies to
non-contributory pension schemes.

In terms of risks,

these schemes

The literature on the benefits available shows that conventional social
security schemes have failed to protect members in distress so they
may be self-respecting, self-sustaining and valuable members of society
(Mangangila 1976, Mataba 1983, and Mlyansi 1991). For example, the
rates of interest awarded annually to members of provident funds have
invariably been negative in real terms and the lump sums paid out
generally represent no more than a few month earnings.

Adequate protection against hardship should be the fundamental
guide in the establishment of the benefit structure of a national system

VOL 17 NO 2 JULY 2002 JOURNAL OF SOCIAL DEVELOPMENT IN AFRICA

25

and
of social security. Protection should be based on average earnings
a 50%
should be related to family needs. There should be, for example,
for an aged wife or the younger widow and
supplementary
the surviving children of an insured individual.
In Tanzania the criteria
used to fix the level of social protection are secrets only known to the
social

security schemes.

allowance

Strengths, weaknesses,
Strengths
• There exist different

opportunities

and threats

forms of social security in Tanzania. These have

a system and structure which can be studied and improved .
and informal social security systems

• Members of non-formal

seem
of these systems which

to have developed
thus have the potential

a sense of ownership

to be expanded and improved .

• There is some commitment

from the government
tor of all existing formal social security systems

to act as a guaran-
in the country.

Weaknesses
•

social

Formal
benefits paid are inadequate .

security

schemes

cover very few people

and the

• They are characterized

by delays in making payments

to members,

bureaucracy,

inefficiency

and poor governance .

• They are usually monopolistic

and workers

are forced by law to

join, with no choice between schemes .

• They are inflexible and do not provide a forum for memb~rs to have

a say in the way their contributions

are invested .

• There is no possibility of portability of members'

benefits

from one

scheme to another .

•

and comprehensive

• There is no systematic

social
and activities

national
policy which governs all social security programmes
the country .
Social protection is still regarded not as a right of all citizens but as
a privilege.
Opportunities
The commitment
security

of the government
can be used as an avenue

social
these systems. The

security
in

to strengthen

as a guarantor

to formal

26

JOURNAL OF SOCIAL DEVELOPMENT IN AFRICA VOL 17 NO 2 JULY 2002

Mchomvu, Tungazara and MaghimbiiTANZANIA

REPORT

current emphasis on investigating 1he potential of non-formal social
security systems in the provisions of social protection can be exploited
in extenQ.ing social security coverage to those who are now excluded.
Threat
Government policy, legal and financial support have focused on large-
scale formal social security schemes such as the NSSF and PPF but
there is no articulate programme on social protection of people outside
the formal sector. Such thinking has continued to dominate policy
maker and thus continue to be a threat to non-formal social security
development.

Conclusion
Conventional
social security programmes cover a relatively limited
proportion of the population and have not reached the urban and rural
poor. They do not provide adequate social protection to members, thus
leaving members in poverty when faced with various contingencies.
The poor rely on non-conventional social security programmes which
serve them only inadequately. This is exacerbated by the erosion of
traditional
social security practices as a result of increasing urbani-
zation and the process of globalization as the extended family system
breaks down and as population pressure impinges on traditional use
of common property.

There is a need to understand the social security needs of different
categories of poor people in Tanzania, the sources and types of risks
confronting the poor and the different arrangements
and strategies
(informal, market-based and public) for risk reduction, mitigation and
coping used by individuals and the government. In order to have a real
picture of the inequities in the distribution of resources and incomes in
contemporary Tanzania, we must understand the extent of redistri-
bution across generations and within a generation in both conventional
and non-conventional
social security schemes and programmes.
Furthermore, we need to know the transactions and hidden opportunity
costs involved in jnformal risk sharing arrangements.

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JOURNAL OF SOCIAL DEVELOPMENT IN AFRICA VOL 17 NO 2 JULY 2002