EPRI in the News: Financing Social Protection in Tanzania and Uganda

by Emmanuel Kisaame and Jason Braganza

Why social protection?

Social protection plays an integral role in ensuring benefits from development and growth are sustainable and that no one gets left behind in the fight against chronic and extreme poverty. In addition, it enables people to invest in their livelihoods and improves resilience and social cohesion resulting in human capital development (see figure below). In a recent briefing on social protection, Development Initiatives provides evidence on this critical focus area for investments to end poverty in least developed countries.

Multidimensional impacts of social protection (i)

Financing social protection in Tanzania and Uganda

Social protection – Options for Tanzania and Uganda

Sub-Saharan Africa has experienced stable economic growth over the past decade or so. However, this growth has not translated into commensurate poverty reduction or an improvement in the lives of the most poor. The2014 Poverty Status Report in Uganda shows that despite stable growth the combined number of Ugandans that are either poor or vulnerable to poverty is 63% of the population, or 21.4 million. The broad-based growth agenda of Uganda differs from a pro-poor growth approach such as that adopted by Tanzania, which offers better prospects for the poor and vulnerable.

In both countries there is a case for financing social protection programmes to safeguard the poorest populations. (ii) As part of the UNICEF speaker’s series on financing social protection in these two countries, it was highlighted that finding fiscal space for social protection programmes was an important policy priority.

In the case of Uganda, analysis of fiscal space involved identifying additional revenue sources to bolster the country’s ability to pay. This involves increasing the scope and effectiveness of existing revenue sources. Key questions to be considered include: is further investment in social protection affordable and feasible? Are social protection investments feasible in light of budget deficits and low revenue collection? Is social protection sustainable given the large number of dependents among Uganda’s population? (iii)

Meanwhile in Tanzania tax revenue analysis suggests broadening the tax base and reducing tax exemptions and tax evasion rates. Specifically, tax exemptions need to be more pro-poor, tax evasion needs to be countered through stricter legislation, and additional tax revenue sources such as airspace tax could be explored.

Fundamental to financing social protection in both Tanzania and Uganda is the political commitments by policy makers to find the fiscal space that will resource these programmes. Social protection should be seen as investment rather than expenditure to lift the most vulnerable people out of extreme poverty by 2030.

 

Notes

(i) Taken from Creating and Sustaining Fiscal Space for Expanding Social Protection, Nard Huijbregts nard@epri.org.za Economic Policy Research Institute (EPRI), Cape Town, South Africa,  April 2015

(ii) See forthcoming Development Initiatives’ paper Getting poverty to zero – evidencing the role of social protection, current coverage and current domestic and external financing

(iii) It is notable that children are over-represented in Uganda’s poverty statistics.

 

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