Contribution to forthcoming publication

1. In search of an enhanced social security for
Uganda
Introduction
Social security plays a very important role in the
economic and social livelihoods of every citizen. It
protects people from the risks of loss of income and
livelihood arising out of both certain and uncertain
events ranging from a wonderful thing such as
childbearing to a terrible illness or accident leading
to death of a major bread winner. In the worst case
scenario, as has happened following the recent
world economic crisis, the loss of jobs can have a
dampening effect on the potential growth and
recovery of an economy due to the fall in demand
following loss of income. Most developed
economies have been able to administer their
stimulus packages through the social security
system in form of enhanced pensions and
unemployment benefits. Clearly, the role of a robust
social security system-one that can help people
keep their jobs and support them even in the most
critical time of need cannot be underestimated.
The right to social security
The basic right to social security is universal. As
early as 1944, Social security was established as a
basic human right in the ILO’s Declaration of

2. Philadelphia and its Income Security
Recommendation (No. 67). This right is upheld in
the Universal Declaration of Human Rights, 1948,
and the International Covenant on Economic,
Social and Cultural Rights, 1966. Article 22 of the
Universal Declaration of Human Rights recognized
the right of every member of society to Social
Security and to the realization of the economic,
social and cultural rights indispensable for his
dignity and the free development of his personality.
In the same spirit, several articles of the Uganda
Constitution recognize the right of its citizens to
basic social services.
Sadly, the ILO1 estimates that over 80 percent of
the world’s population can only dream about
access to social protection. In Uganda, formal
social security takes care of no more than 5 percent
of the working population!
The ILO minimum social security standard
The International Labor organisation has been the
lead agency on social security since 1919. The ILO
Social Security (Minimum Standards) Convention,
1
ILO, (2008): Setting social security standards in a global
society. An analysis of present state and practice and of
future options for global social security standard setting in the
International Labour Organization. Consultation Paper
/International Labour Office, Social Security Department
-Geneva

3. 1952 (No. 102), is the only international instrument,
based on basic social security principles, that
establishes worldwide-agreed minimum standards
for all nine branches of social security. These
branches are: medical care, sickness benefit;
unemployment benefit; old-age benefit;
employment injury benefit; family benefit; maternity
benefit; invalidity benefit; and survivors' benefit.
Definition of Social Security
The International Labour organisation defines
Social Security as “a set of public measures to
protect individuals against the risk of loss or
substantial reduction in income due to invalidity,
occupational injury, sickness, maternity, old age,
death, unemployment, children and family
obligations.

4. Despite the clear The impact of Social Security
benefits of social
Social security has a powerful impact at all levels
security, in 2003
of society. It provides workers and their families
the ILO2 estimated
with access to health care and with protection
that only one on
against loss of income, whether it is for short
five people in the
periods of unemployment or sickness or
world had access
maternity or for a longer time due to invalidity
to adequate social
or employment injury. It provides older people
security and that
with income security in their retirement years.
more than half of
Children benefit from social security
the world’s
programmes designed to help their families cope
population did not with the cost of education. For employers and
have any form of enterprises, social security helps maintain stable
social security labour relations and a productive workforce.
coverage. The And social security can contribute to social
situation was cohesion and to a country’s overall growth and
worse in sub- development by bolstering living standards,
saharan Africa cushioning the effects of structural and
where no more technological change on people and thereby
than 5-10 percent providing the basis for a more positive approach
of the working toward globalization.
population had
access to any form Source: ILO (2003)-Facts on Social Security
of social security. This situation has barely
changed.
Social security in Uganda
2
ILO(2003) Facts on Social Security, Geneva

5. For the majority of Ugandan workers and their
families social security remains a distant dream.
The biggest formal social security schemes-
National Social Security Fund (NSSF) and the
Public Service pension scheme (PSPS) provide
coverage for no more than 6 percent of the working
population. The NSSF a contributory scheme
covers about 300,000 employees in the formal
private sector while the PSPS is tax financed and
covers about 260,000 government employees. Both
provide old age, disability and survivors’ benefits.
There are plans to introduce medical insurance for
both groups of workers in the near future. For the
majority (95 percent) and most vulnerable of
workers in the informal sector-small scale trade and
agriculture, there are no formal mechanisms to
save for a rainy day. As a result, people in these
sectors work till they drop and most of them end up
destitute in old age or physical disability. The
situation is even worse in the case of death of a
breadwinner. Most children from such families drop
out of school perpetuating a vicious cycle of poverty
and underdevelopment.

6. Figure 1-Social Security coverage in Uganda by
scheme
Uganda: Social Security
coverage, 2010
3% 2%
0%
NSSF
PSPS
Other
Uncovered
95%
Can Uganda afford more social security
coverage
Experts agree that the higher levels of social
security coverage in developed countries were not
purely a result of economic achievement because
the most prosperous countries are not necessarily
the ones with the highest coverage. Social security
coverage is rather a function of political will and
unique national socio-cultural factors that foster a
sense of solidarity and minimum well-being for
citizens. Over the last decade, several developing
countries have registered consistent rates of
economic growth but sustained high levels of
poverty and vulnerability for their populations. In
most of these countries, the levels of inequality
have worsened and as a result face increased

7. social tensions. Consequently there has been a
paradigm shift in the development debate with
increased calls for a rights based social security
system across the globe. The millennium
development goals initiative is certainly one of
those that promote a more equitable global society.
Challenges for social security in Uganda
Uganda’s social security system covers too few and
currently offers inadequate benefits. Over 95
percent of the most vulnerable active labour force
and their families in the informal sector have no
form of social security coverage. The level of
protection available for members of NSSF and the
PSPS is inadequate; only old age, death and
disability risks are covered. The current form of
cover offered under the NSSF provident scheme
does not insure the member/beneficiary against the
financial risks in the market and guarantee a
regular income upon retirement. Plans dating back
to 2001 to introduce medical insurance are yet to
be implemented and the pensions sector is facing
an impending liberalisation.
The informal sector poses a unique challenge for
the extension of social security. The relative lack of
an organised platform to address issues for
workers in this sector fuels their further exclusion

8. and lack of voice in policy debate. It has been
previously assumed that by providing incentives
and facilities like feeder roads to farmers and small
scale traders would automatically transform their
lives out of poverty and vulnerability. Unfortunately,
the reality is that the market is a terrible mechanism
when it comes to addressing social imbalances it
causes once it fails, as it always will.
There is therefore a clear need for social security
reform that starts with defining the strategic
direction that country needs to take. In view of the
high level of poverty and vulnerability across the
country, government and all stakeholders-labour,
employers and the public need to rally around a
common position to extend social security coverage
and enhance the adequacy and relevance of
benefits.
The reforms that are needed entail building
consensus on the form and timing of liberalisation,
the development of a more inclusive social security
regime including social health insurance and
improving the governance of social security through
strengthening the governance and regulatory
environment.
It is possible to pursue a rights based approach to
social security and protect all citizens. The efforts of

9. the Ministry of Gender Labour and Social
development to pilot test a cash grants system for
the most vulnerable is a step in the right direction.
Estimates from a recent study by the ILO show that
a basic universal old age pension would cost no
more than 2 percent of GDP and can be therefore
affordable if there is political will.
The role of organised labour
Trade Unions across the world have been at the
forefront of championing the rights of workers. As
key stakeholders, labour can advocate for more
involvement in the reform and governance of social
security in Uganda. Labour unions need to engage
members and reach out to all workers and forge a
common position on the form of social security
governance and reform.
All ingredients for a robust social security system
are in place. Uganda has steadily grown above 6
percent annually over the past several years. There
are calls for a more responsive social security
system by all workers and the government is keen
on reforming the social security sector. The search
for an enhanced social security system at this point
is not far fetched.